The outcome of the Brexit vote and Donald Trump’s US presidential victory in 2016 reminded us of the pitfalls of making predictions. Undeterred, Kurt Sansone gazes into the political crystal ball for the coming year.

There is no doubt that the most asked question of 2017 will be whether the general election will be held in the next 12 months.

To cut a long story short: it won’t. The government will want to deliver its last Budget of the legislature in October as it tries to woo the middle class by ensuring they continue to pay less income tax.

The economy is expected to maintain its above-average rhythm, giving the Finance Minister more leverage to present an election Budget. To be fair, every Budget presented by Edward Scicluna has earned it the ‘election’ label after he broke the first-tax-and-spend-later cycle of previous legislatures.

But come next October, Prof. Scicluna will not only have economic and fiscal progress on his mind but also the election.

After focusing on pensioners and those on the low end of the income scale this year, Prof. Scicluna’s brief will be to consolidate these measures and couple them with others specifically targeting middle-income earners.

Widening income tax brackets, increasing Children’s Allowance payments and introducing new leave arrangements for parents when children are sick could possibly all be on the table.

To this end, the deficit reduction in 2018 may not be as aggressive as it has been every year since Labour came to power, but it would appear Prof. Scicluna has already planned for this.

With the deficit targeted at 0.5 per cent of GDP this year, Prof. Scicluna’s projection for 2018 is 0.2 per cent. While the deficit will still be on a downward trajectory, it will be the smallest decrease in five years.

But economic figures aside, the government will want time to address social grievances, most notably in the housing sector, for which it has been under fire from pockets of core voters. Expect progress on this in 2017.

It will also want to move forward on the grievances fund set up in the last Budget to address work-pension anomalies such as the police overtime issue, former port workers and those who formed part of the labour corps in the 1970s.

Just like it did with the VAT refund on the car registration tax for vehicles bought between 2004 and 2008, the government will favour a staggered approach. The first payments will likely be made this year, followed by a more generous handout next year.

And then there is the new gas power station, which is expected to come on stream by the end of the first quarter. Despite the controversies surrounding this project, it was a cornerstone pledge in the last election, and Prime Minister Joseph Muscat will want to cut the ribbon, declaring the end of the ‘cancer factory’ that used heavy fuel oil.

The fearmongering on the presence of the liquefied natural gas storage tanker inside Marsaxlokk bay was quashed by environmentalist Alan Deidun, a board member of the Environment and Resources Authority, when he said the benefits of cleaner air far outweighed the risks. After voting in favour of the operational permit last month, he said the dangers outlined by various exponents were adequately mitigated by Electrogas, the company that built and will operate the facility.

Come next October, Edward Sciclunawill not only have economic and fiscal progress on his mind but also the election

The shift to gas comes at a time when the International Energy Agency’s latest edition of its flagship publication, World Energy Outlook, declared renewables and natural gas to be the big winners in the race to meet energy demand growth over the next 25 years.

And when oil prices are pointing upwards, Malta will be shifting its energy generation to the cheaper LNG.

This might leave Enemalta in a better position to lower household electricity prices again in 2017, albeit by a smaller margin than the tariff cuts of three years ago.

It will be something the government will want to push as the majority shareholder of the company, especially as its accounts return to the black.

All this will not absolve the government from its failure to publish the power purchase and gas supply agreements with Electrogas.

Without them, it will be impossible for outsiders to determine whether Enemalta has the required flexibility to make better use of the interconnector with Sicily, which has the potential to deliver electricity at even cheaper rates than gas.

However, if the power station functions without a glitch and people get to benefit from a tariff reduction, expect criticism from the Opposition to mellow, as they will have to answer the question about what to do with the project if they get into government.

Air Malta will continue to be a thorn in the government’s side. The Alitalia deal will finally be declared dead sometime in the first quarter as government frantically tries to find another strategic partner to salvage the national airline.

Fraught with financial and political ramifications, the satisfactory handling of Air Malta cannot wait until after the election in 2018.

The government will also try and prevent the issue dragging on until the end of the year, as the airline risks returning to the predicament it was in six years ago, when it faced bankruptcy.

The government may only just gamble on a wrangle with the European Commission as it tries to prop up the ailing airline with a loan.

This course of action will not be successful, but it could have domestic appeal as the government is seen taking on the Brussels bureaucrats. Market reality, however, is unforgiving, and Air Malta’s future could seriously hang in the balance in 2017.

In May, Malta will again miss out on winning the Eurovision and voices will start being raised as to the possibility of a June election as Dr Muscat seeks to capitalise on the country’s successful handling of its six-month stint at the helm of the EU.

But again, this will not be reason enough to sway the Prime Minister’s decision. He knows that international success has very little currency with voters, despite the feel-good factor it can generate, as his predecessor Lawrence Gonzi found out. Dr Gonzi’s perfect handling of the Libya crisis in 2011, acknowledged by friend and foe alike, was not enough to prevent a catastrophic defeat at the polls two years later.

The Prime Minister will play the pass card in June when Malta ends its EU presidency, but expect the hard-nosed political wrangling to kick off soon after as it takes us up to the election some nine months later.

Panama will not go away but…

Konrad Mizzi will be summoned to explain his association with Panama Papers when the European Parliament’s inquiry committee comes to Malta on February 20.

It remains unclear whether the Minister Without Portfolio will play ball, but the inquiry is expected to keep the Panama Papers scandal alive and kicking, at least for the first six months. However, its political impact on the domestic scene remains questionable.

The scandal has bruised the government and stunted Dr Mizzi’s political career, but it does not seem to have done enough to sink the Prime Minister’s trust ratings.

The EP’s inquiry committee, known as PANA, is tasked to look into tax evasion, money laundering and tax avoidance. Its mandate expires in June but can be extended.

And with MEPs likely to focus their probe on tax issues with a long-term view towards bringing about the harmonisation of company taxes across the EU, Dr Mizzi’s political and ethical misdemeanours may just be sidelined.

Malta has consistently opposed moves to harmonise company taxes, and there is political consensus on this domestically. If PANA shifts the Panama goalpost to this aspect, the government will be handed a winning card, as any criticism by the Nationalist Party in Malta and abroad will be labelled as going against the national interest.

The overdue audit of Dr Mizzi’s financial structures… will show nothing legally untoward but it will not be able to answer questions of political rectitude

Of course, criticism of Dr Mizzi’s decision to open a company in Panama and a family trust in New Zealand is not a threat to the national interest. It is about political rectitude, in which this government has failed on many counts.

But with the financial services sector being put under great pressure by the European Commission’s countless moves to inch towards tax harmonisation, political correctness may be the last consideration on the mind of Maltese practitioners, including lawyers linked to the Nationalist Party as they bring to bear subtle pressure on politicians not to fracture the consensus built over many years.

The overdue audit of Dr Mizzi’s financial structures, promised last year, may just see the light of day in time for PANA’s Malta hearing. It will show nothing legally untoward, but it will not be able to answer questions of political rectitude.

It remains unclear whether the Prime Minister’s chief of staff, Keith Schembri, an unelected official, will also be called to testify in front of MEPs.

Mr Schembri also held the same offshore financial structures as Dr Mizzi, and his actions remained uncensured as the Prime Minister reiterated his trust in his right-hand man.

Busuttil’s make or break

Simon Busuttil has played hardball in Parliament with some success, despite starting the legislature with a nine-seat deficit.

The Opposition leader is expected to maintain the same momentum this year, emboldened by the fact that the government’s majority has dwindled to five seats.

He will continue leading his MPs on a relentless battle to hold the government to account over its scandals, big and small.

The words will continue to be harsh; the body language forceful. But he should also ensure that the high benchmark he has set must first be reached by his own parliamentary group.

Outside the House, Dr Busuttil should be under no illusion: his parliamentary performance alone will do little to sway voters unless the Nationalist Party comes forward with a palatable political platform.

By now he should have realised that an anti-corruption platform on its own at a time of relative economic well-being will not be enough. To make matters worse, the first ‘member’ of Dr Busuttil’s national coalition against corruption was former TV presenter Salvu Mallia, whose latest obnoxiousFacebook rant confirmed the worst fears of the party’s rank and file, already sceptical of his PN candidature.

Despite the scandals of corruption and cronyism that have hounded the Labour government, the latest involving Education Minister Evarist Bartolo’s former canvasser at the Foundation for Tomorrow’s Schools, Dr Busuttil still trails in the regular trust ratings published by MaltaToday.

The polls have not been kind to the PN either. Despite bridging the gap with Labour, not once has the PN been in the lead, which does not bode well for entering the last full year before the election.

All this may change, but Dr Busuttil will have to shift gears in 2017 by presenting himself as an alternative prime minister, telling people how to do things better.

To do so, he will have to come out with policies that make sense. The tax-cut proposal for the self-employed and small businesses was a brave move, but it left much to be desired. Apart from the confusion of how it will be implemented and concerns over the cost to public coffers, the move to tax profits up to €50,000 at 10 per cent could create a dramatic distinction between the self-employed, for whom the cut is intended, and employees, who will be taxed at higher rates.

Dr Busuttil will want to see his approval ratings rise. Ignoring the polls may be fashionable after some global failures, but party insiders will be watching closely. This year is the Opposition leader’s last chance to shine before the big test.

Historical irony has Labour leading EU

Nobody, 13 years ago, would have thought it possible that Joseph Muscat would be the one to head the country’s first EU presidency.

But historical irony has it that the man who campaigned against Malta’s EU membership will, as of today, be leading the country in its six-month stint at the helm of the EU.

On the flipside, the avid pro-EU champion, Simon Busuttil, gets to watch the show from the Opposition benches.

Malta’s presidency comes at a critical juncture for the EU as it tries to find its raison d'être in a changing world.

With the UK formally initiating its exit in March, the bloc will have to contend with popular discontent over immigration and the failing economic policies that are providing propulsion to the far-right and anti-establishment forces.

Parliamentary elections in the Netherlands in March and the presidential election in France in April and May will weigh down on EU policy making, as will the German election in September. The outcomes may veer the EU towards a fortress mentality that tries to shut out migration at great economic expense in the future.

As he basks in the limelight of the EU stars he once demonised, the Prime Minister will not want to lose touch with domestic governance

Reforming the Dublin rules on migration will be top of the agenda for Malta’s presidency, but the Prime Minister will harbour no illusion that he can broker a deal between the 27 member states.

Malta’s decision to accept its fair share of asylum seekers from Italy and Greece has proven the government’s resolve to act as an honest broker in immigration, but despite the pats on the back Dr Muscat will receive during Council meetings, it will not be enough to sway the hard-nosed position of the EU’s eastern countries.

The EU will also have to determine its place in the world as Donald Trump in the US reshapes his country’s foreign and domestic policy towards a more insular model.

Navigating these waters will not be easy. Progress will be very slow, but Malta will generally do well as it organises the myriad of meetings that accompany the presidency.

This will give Dr Muscat a higher European profile, something that he will relish for posterity. But as he basks in the limelight of the EU stars he once demonised, the Prime Minister will not want to lose touch with domestic governance.

He sounded this cautionary note to his ministers in one of the Sunday sermons.

European politics plays second fiddle to the mundane concerns of many, and government will only ignore these at its own peril.