Budget speak
There are magic moments, and there are telling ones. At 20.41 on Monday, as Finance Minister Tonio Fenech was delivering his budget speech, Minister Austin Gatt, sitting on the right of Minister Fenech, rendered an example of the latter moments. He...
There are magic moments, and there are telling ones. At 20.41 on Monday, as Finance Minister Tonio Fenech was delivering his budget speech, Minister Austin Gatt, sitting on the right of Minister Fenech, rendered an example of the latter moments. He yawned widely, albeit with an effort at elegance by delicately waving his left hand before his open mouth. That was two hours and 20 minutes into the Finance Minister's speech.
Barely six minutes later former foreign minister Michael Frendo, faithlessly relegated by his constituents to a by-election but no less weighty for that, sitting just behind Minister Fenech yawned as well, but caught his jaw-jerk reaction in mid-expression.
The camera was unfairly zoomed on the two honourable listeners because of the simple fact that it was zoomed on the Finance Minister. Others may have yawned as well, but they weren't caught red-handed. Several, though, were caught chatting with each other, rather than sitting in enraptured attention.
The fact is that the first budget speech of Minister Fenech was boring in content as well as in delivery. Two-and-a-half hours into it he only managed to get a cheer from his side, and that was in the first half hour. Pity Mr Speaker Louis Galea, who had to frown in concentration throughout the ordeal.
Although Mr Fenech thundered his speech throughout, it failed to grasp his own colleagues' uninterrupted attention. Someone should have told him that one doesn't shout out a speech at one-decibel level. Had he watched a few of John Dalli's 10 or so speeches, he would have come across differently.
As it was, the impact was unfair to the varied content of the speech and to the earnestness of the minister who had gelled it together, after acting second fiddle to the Prime and Finance Minister for all of four years in the previous legislature.
The content was not earth-shaking. In summary, it admitted the government's failure to achieve the target it had set itself in the 2008 budget. The projected outturn for the full year is likely to show a budget deficit treble the size of what Prime Minister Gonzi had forecast a year ago, on the basis of the then Parliamentary Secretary's workings.
Minister Fenech revealed that in the most understated of manners, mentioning it in passing as if it meant little at all.
Actually it meant a lot. Worse than that, the budget speech wrought out of Minister Fenech an admission that the target of budgetary balance in financial year 2010 had to be postponed to 2011, in the context of a three-year economic plan. That in itself was an admission of further failure. Years ago more perky Nationalist governments had proclaimed economic planning dead. Now, the government is at it with gusto, if without any apology for the original and current insult to rational economic thinking.
The minister did not suggest that he had proposed fiscal rectitude because all the social partners and such financial commentators or economists as had spoken out had opined that it would be madness to take more money out of the economy after the prime and multiplying impact of the utility tariffs hike. He could not do that. The glaring truth was that he had no alternative except utter madness. And, unlike its milder alternative, utter madness can have no method in it.
The minister got the bad news of the current and coming budget deficits out of the way through a seemingly deliberate mish-mash style of moving forwards and jumping backwards. In-between he announced various good measures. Administrative measures that should benefit industry and investment promotion; but not so as to be termed very original. In fact they are administrative measures that should have seen the light of day and implementation earlier on this year, or in the previous legislature.
Still, though belated, they will be welcome to the business community. What will be less welcome to it and to the broad segment of taxpayers that props the Inland Revenue Department up is the change in the income tax bands. The minister tried to be clever by grouping the change with tax reductions since 2006. That, of course, is not the point.
With Enemalta and the Water Services Corporation taking out a massive amount from the economy through astronomically high utility tariffs, both hit families and the business community hoped that the government would pay more attention to the net impact on aggregate demand.
That was also expected in the context that the government harps on the notion that tax cuts stimulate the economy and reward the Inland Revenue Department with much more than the public administration was taking out in terms of utility tariffs.
At a cost of €12 million in foregone tax revenue in 2009, that cannot be the case. The minutiae of the plusses and minuses should have been worked out by the Finance Minister, in the context of a declared commitment to fiscal transparency. No doubt the opposition and some of the social partners will do the job for him.
On a more personal note I was pleased that the government will be extending assistance to disabled children in private schools, on the same basis that it does that to public and Church schools. That was a basic recommendation of the so-called Spiteri report on inclusive and special education, which is being adopted in affordable doses by the government.
I would also have liked to see more attention paid to the new housing scheme announced by Social Policy Minister John Dalli. The paragraph in passing on it does not do the worthwhile scheme justice.
At the end of it all, the 2009 budget will stand and/or fall on two criteria - the macro extent to which it will add a net stimulus to the economy in troubled 2009; and the extent to which it will help to restructure the economy to be in a good shape to exploit and benefit from the opportunities which will be thrown up by the rough seas of 2009 and (hopefully) calmer waters beyond.
Barely six minutes later former foreign minister Michael Frendo, faithlessly relegated by his constituents to a by-election but no less weighty for that, sitting just behind Minister Fenech yawned as well, but caught his jaw-jerk reaction in mid-expression.
The camera was unfairly zoomed on the two honourable listeners because of the simple fact that it was zoomed on the Finance Minister. Others may have yawned as well, but they weren't caught red-handed. Several, though, were caught chatting with each other, rather than sitting in enraptured attention.
The fact is that the first budget speech of Minister Fenech was boring in content as well as in delivery. Two-and-a-half hours into it he only managed to get a cheer from his side, and that was in the first half hour. Pity Mr Speaker Louis Galea, who had to frown in concentration throughout the ordeal.
Although Mr Fenech thundered his speech throughout, it failed to grasp his own colleagues' uninterrupted attention. Someone should have told him that one doesn't shout out a speech at one-decibel level. Had he watched a few of John Dalli's 10 or so speeches, he would have come across differently.
As it was, the impact was unfair to the varied content of the speech and to the earnestness of the minister who had gelled it together, after acting second fiddle to the Prime and Finance Minister for all of four years in the previous legislature.
The content was not earth-shaking. In summary, it admitted the government's failure to achieve the target it had set itself in the 2008 budget. The projected outturn for the full year is likely to show a budget deficit treble the size of what Prime Minister Gonzi had forecast a year ago, on the basis of the then Parliamentary Secretary's workings.
Minister Fenech revealed that in the most understated of manners, mentioning it in passing as if it meant little at all.
Actually it meant a lot. Worse than that, the budget speech wrought out of Minister Fenech an admission that the target of budgetary balance in financial year 2010 had to be postponed to 2011, in the context of a three-year economic plan. That in itself was an admission of further failure. Years ago more perky Nationalist governments had proclaimed economic planning dead. Now, the government is at it with gusto, if without any apology for the original and current insult to rational economic thinking.
The minister did not suggest that he had proposed fiscal rectitude because all the social partners and such financial commentators or economists as had spoken out had opined that it would be madness to take more money out of the economy after the prime and multiplying impact of the utility tariffs hike. He could not do that. The glaring truth was that he had no alternative except utter madness. And, unlike its milder alternative, utter madness can have no method in it.
The minister got the bad news of the current and coming budget deficits out of the way through a seemingly deliberate mish-mash style of moving forwards and jumping backwards. In-between he announced various good measures. Administrative measures that should benefit industry and investment promotion; but not so as to be termed very original. In fact they are administrative measures that should have seen the light of day and implementation earlier on this year, or in the previous legislature.
Still, though belated, they will be welcome to the business community. What will be less welcome to it and to the broad segment of taxpayers that props the Inland Revenue Department up is the change in the income tax bands. The minister tried to be clever by grouping the change with tax reductions since 2006. That, of course, is not the point.
With Enemalta and the Water Services Corporation taking out a massive amount from the economy through astronomically high utility tariffs, both hit families and the business community hoped that the government would pay more attention to the net impact on aggregate demand.
That was also expected in the context that the government harps on the notion that tax cuts stimulate the economy and reward the Inland Revenue Department with much more than the public administration was taking out in terms of utility tariffs.
At a cost of €12 million in foregone tax revenue in 2009, that cannot be the case. The minutiae of the plusses and minuses should have been worked out by the Finance Minister, in the context of a declared commitment to fiscal transparency. No doubt the opposition and some of the social partners will do the job for him.
On a more personal note I was pleased that the government will be extending assistance to disabled children in private schools, on the same basis that it does that to public and Church schools. That was a basic recommendation of the so-called Spiteri report on inclusive and special education, which is being adopted in affordable doses by the government.
I would also have liked to see more attention paid to the new housing scheme announced by Social Policy Minister John Dalli. The paragraph in passing on it does not do the worthwhile scheme justice.
At the end of it all, the 2009 budget will stand and/or fall on two criteria - the macro extent to which it will add a net stimulus to the economy in troubled 2009; and the extent to which it will help to restructure the economy to be in a good shape to exploit and benefit from the opportunities which will be thrown up by the rough seas of 2009 and (hopefully) calmer waters beyond.