No book of revelation

Those who were expecting some evidence of strong political leadership in the 2010 pre-budget document must have been disappointed. The pre-budget document is spread over 147 pages and being supplemented with another document on the Benchmarking of Malta's Competitiveness, the document would assume the proportion of a 200-page dissertation. The thickness of the document lacks substance. In fact, this year's document is no book of revelation.

Nowhere in this document can one find any concrete evidence of what the government's plans are both to get our economy out of the current recession and to promote future economic growth and job creation. It keeps the readers guessing whether the government indeed has any idea of where it needs to start to curtail public expenditure, or what plans it may have to increase revenue by increasing taxes.

Perhaps more worrying, it does not say much on what productive public investment is planned for the coming few years. No wonder many economic and political analysts are asking themselves what the Minister of Finance's real plans are.

Will he or won't he increase taxes? Will he or won't he reform the public service? Will he or won't he present a blueprint for social services reform? Will he or won't he increase productive public investment to promote economic growth? Will he or won't he reform our educational system to ensure that the money being spent in education does indeed give us better results as measured by students' achievement?

There is no point in looking at the pre-budget document to discover what the likely answers to these valid questions are likely to be. As I said, the pre-budget document is no book of revelation of the government's future plans for our economy and as such can hardly serve as a good basis for public discussion.

The team preparing this document no doubt has a good grasp of economic theory. Parts of this document could be cut and pasted in an economics text book for university students. Even so, readers who have some familiarity with economic principles and concepts are bound to be very annoyed by the clichés and numerous platitudes that pepper this document.

The authors of this document are also very competent in using language that leaves the reader confused at what they are really proposing. This document could well have been written by the Sir Humphrey Appleby equivalent in the Ministry of Finance. In the best Yes Minister tradition, it manages to reconcile conflicting proposals aimed at addressing a hot issue without clearly indicating what the author's preferred options are.

Can anyone, for instance, explain what the real plans of the government are for addressing the public deficit problem and at the same time promote economic growth after reading the following concluding paragraph taken from the Unwinding Fiscal Balances section?

"Fiscal adjustment from restraining government consumption is rather limited. Thus addressing the current excessive deficit calls for consideration of other items particularly public investment and the revenue side of the budget. In particular, the possible negative impact on the economy of concrete action to attain fiscal adjustment through these channels should be given its due importance such that the fiscal position is not turned back on a sustainable path at the cost of undermining economic growth."

The government does not seem to be saying that it will have to increase taxes, or that it can decrease expenditure sufficiently, or that it will curb public investment to resolve the current economic stagnancy. But it does not exclude any of these tactics either.

My conclusion is that either the government is still not certain on what measures to apply to address these conflicting priorities or, more likely, it wants to keep the cards close to its chest until the budget speech is read in Parliament next November. This would show how futile the government's claim is when it insists that the pre-budget document should be an instrument to promote public discussion on its economic plans.

Once again the government is showing that it does not trust the people's ability to judge its performance. It promotes the value of dialogue, but then resorts to frequent short, sharp shocks to achieve its half-baked economic tactics and strategies. It is not prepared to lead from the front. It is more interested in stopping the erosion of its public support that is now gathering momentum by hiding its plans from ordinary people who have a right to know as early as possible how government economic policies are likely to affect them in the near future.

Stealth and not dialogue is the real hallmark of this administration.

Dr Mangion is shadow minister for finance

cmangion@keyworld.net