Hanging questions
Starting from now and over the coming few days opposition spokesmen will lay bare the ingredients that make up the 2009 budget. The Opposition Leader started the trend on Monday, with a reply to the budget speech replete with multiple questions and...
Starting from now and over the coming few days opposition spokesmen will lay bare the ingredients that make up the 2009 budget. The Opposition Leader started the trend on Monday, with a reply to the budget speech replete with multiple questions and answers. The Prime Minister waded into that speech yesterday when he wound up the budget motion. He moved on to reiterate the highlights of the Estimates drawn up by his Finance Minister.
Cabinet ministers, parliamentary secretaries and Nationalist backbenchers will counter the many digs of the opposition with more repetition of the budget content.
A lot of politicking will continue to be bandied about. The opposition side will liberally charge the government with incompetence, following the cue from the Opposition Leader. The government, following the cue by the PM, will bring in the record of the short-lived Labour administration of 1996-98 and of the long Labour years between 1981 and 1987.
We've been there before; there will be no major surprises. That will not be the only thing absent. The budget debate in the committee of supplies will most likely not produce a serious forward looking discussion about the state of the economy, and where do we go from here. Added together a million of micro jibes and counter jibes will but tot up into an hour of meaningful analysis and discussion.
Yet, that is what is patently required from the people's representatives. There will be a fresh rehearsal of the measures which the government claims will make Malta live in a more environment friendly style. That will be countered with charges that the administration is simply using alternative energy and green measures to rack up higher revenue, as in the case of forecast receipts from car-related and eco taxes.
All well and good - those who bother to follow the daily debates may also learn more about the budget details than they have done so far.
They might even have a few sums worked out for them, following the lead of The Sunday Times, as examples of how various categories of people and small or not-so-small businesses will be hit. But will there be a deep analysis of the basic questions thrown up by the budget and the revised financial estimates for 2008 and those made for 2009?
There are some basic facts which still need to surface, such as...
It is not true that the government ran off course with the structural deficit only because of unforeseen outlays to persuade shipyard workers to give up their job and in subsidies to Enemalta. The shipyard outlay was definitely foreseen when the Prime Minister, as the then Minister of Finance, prepared the budget for 2008. By the government's own admission the shipyard issue was not brought up before the March 2008 election because it would not have been "appropriate".
More important is the fact that, after one strips the shipyard and Enemalta spending from the 2008 expenditure the adjusted deficit - at €22 million - will still be almost a third above that forecast by the government in the budget for 2008. A third is no light sneeze.
How did the adjusted overrun under the new Minister of Finance come about? Almost up to budget day a week ago the government was reassuring the people that, yes, they could keep the budget deficit broadly on course, allowing for the shipyards and Enemalta expenditure. Yet very obviously they could not. Was the government inept at doing its sums? Was it living in a state of denial? Or was it intent on misleading the people?
Is the administration doing the same thing when it forecasts GDP growth at 2.5 per cent in 2009, despite the global recession? If not, will it state clearly how it expects that growth to come about? With exports falling and direct investment easing that can only come about from higher consumption or higher government spending, or both. Higher consumption is unlikely, given the squeeze of everybody's pips through hiked up utility tariffs and the revised government car and eco fees.
That leaves government spending. Such spending is not the best source to generate growth. Even so, can it? Will it?
Then there is the macro-economic thrust required to steady the economy. How will the government's capital budget affect that? The budget speech did not suggest how capital spending will be coordinated to translate into job and cost-of-living-standards maintenance, and growth. Does the government not mind the gap?
These are but a few questions hanging over the budget debate. Will they be minutely put and minutely answered? Don't hold your breath.
Cabinet ministers, parliamentary secretaries and Nationalist backbenchers will counter the many digs of the opposition with more repetition of the budget content.
A lot of politicking will continue to be bandied about. The opposition side will liberally charge the government with incompetence, following the cue from the Opposition Leader. The government, following the cue by the PM, will bring in the record of the short-lived Labour administration of 1996-98 and of the long Labour years between 1981 and 1987.
We've been there before; there will be no major surprises. That will not be the only thing absent. The budget debate in the committee of supplies will most likely not produce a serious forward looking discussion about the state of the economy, and where do we go from here. Added together a million of micro jibes and counter jibes will but tot up into an hour of meaningful analysis and discussion.
Yet, that is what is patently required from the people's representatives. There will be a fresh rehearsal of the measures which the government claims will make Malta live in a more environment friendly style. That will be countered with charges that the administration is simply using alternative energy and green measures to rack up higher revenue, as in the case of forecast receipts from car-related and eco taxes.
All well and good - those who bother to follow the daily debates may also learn more about the budget details than they have done so far.
They might even have a few sums worked out for them, following the lead of The Sunday Times, as examples of how various categories of people and small or not-so-small businesses will be hit. But will there be a deep analysis of the basic questions thrown up by the budget and the revised financial estimates for 2008 and those made for 2009?
There are some basic facts which still need to surface, such as...
It is not true that the government ran off course with the structural deficit only because of unforeseen outlays to persuade shipyard workers to give up their job and in subsidies to Enemalta. The shipyard outlay was definitely foreseen when the Prime Minister, as the then Minister of Finance, prepared the budget for 2008. By the government's own admission the shipyard issue was not brought up before the March 2008 election because it would not have been "appropriate".
More important is the fact that, after one strips the shipyard and Enemalta spending from the 2008 expenditure the adjusted deficit - at €22 million - will still be almost a third above that forecast by the government in the budget for 2008. A third is no light sneeze.
How did the adjusted overrun under the new Minister of Finance come about? Almost up to budget day a week ago the government was reassuring the people that, yes, they could keep the budget deficit broadly on course, allowing for the shipyards and Enemalta expenditure. Yet very obviously they could not. Was the government inept at doing its sums? Was it living in a state of denial? Or was it intent on misleading the people?
Is the administration doing the same thing when it forecasts GDP growth at 2.5 per cent in 2009, despite the global recession? If not, will it state clearly how it expects that growth to come about? With exports falling and direct investment easing that can only come about from higher consumption or higher government spending, or both. Higher consumption is unlikely, given the squeeze of everybody's pips through hiked up utility tariffs and the revised government car and eco fees.
That leaves government spending. Such spending is not the best source to generate growth. Even so, can it? Will it?
Then there is the macro-economic thrust required to steady the economy. How will the government's capital budget affect that? The budget speech did not suggest how capital spending will be coordinated to translate into job and cost-of-living-standards maintenance, and growth. Does the government not mind the gap?
These are but a few questions hanging over the budget debate. Will they be minutely put and minutely answered? Don't hold your breath.