There is a certain enjoyment that people derive from the intrigue and spin that form part of the Budget process. Budget day is also followed intensely by every interest and lobby group that have put pressure on the government to deliver whatever goodies they perceive might be there for the taking.
The 2017 Budget was no exception. With a near ideal economic scenario of healthy growth and low unemployment, fiscal improvement, as well as a looming election, the Minister of Finance has made a number of tactical moves likely to win electoral support. There will probably be another Budget just before the next election so the scene is set to mollify the growing body of doubters who could well determine the destiny of this government.
This Budget was strong on social measures. With latest poverty statistics still not showing any reduction in numbers, this was clearly a sector that needed to be addressed with some urgency. The elimination of income tax on pensions up to €13,000 was possibly the cherry on the cake, while not going overboard.
The main weakness of this Budget is that there is little, if any, strategic long-term direction behind it. The country is doing well economically. But there are potentially serious flaws in our economic and social infrastructure that are not being addressed. With public finances in the healthiest state for over a decade, one would have expected the safe pair of hands of the Minister of Finance to steer the ship of state away from reefs that may be hidden under the present calm economic waters.
Many were not surprised that not much was said or done to strengthen the fragile balance of our environment. It is no secret that property speculation has given the economy a shot of adrenaline, but as with all addictions, it could end badly because the stimulus can’t last. Was this not the right time to announce some strategic initiatives to seriously strengthen our educational infrastructure (beyond building new schools) to ensure that the country is preparing our younger generations for the jobs of tomorrow? And with public debt decreasing in relative terms as a result of a growing economy, was it not time to commit to some serious productive investment in our transport network? At least the master plan issued for consultation by Transport Malta later in the week was an encouraging development.
On the other side of the political fence, how will the leader of the Opposition respond to a Budget that has drawn reactions ranging from the positive to the lukewarm and indifferent, but certainly not much harsh criticism to speak of? To stay in touch with public sentiment, Simon Busuttil would need to acknowledge the Budget’s strengths even as he lays bare its weaknesses.
This is a golden opportunity for the Opposition to gain the trust of the electorate not only on promises of better governance but also on stewardship of the economy. It will not do so by carpet bombing the budgetary measures proposed by an undoubtedly able Finance Minister. To grow in stature and public esteem, the Opposition must provide an alternative vision; how a PN government would have done it better.
Dr Busuttil needs to convince voters of the PN’s own well-defined, long-term plans to diversify the economy, protect the environment, improve the infrastructure and deal effectively with wasteful corruption and nepotism. His listeners need to come away believing that he can offer a style of government that will stand in stark contrast to centralised control by a small group of close confidantes of the Prime Minister, but that would instead seek to harness the competence of every individual in our society.
The 2017 Budget only offers short-term solutions. People want to know what is likely to come after 2017.