In many regards the Budget Speech for 2013 was very much as expected. The Budget should be an economic exercise, being the Government’s main influence to steer the economy. Instead it was couched in political discourse, summarised as “anything we did, you can’t do better”. Measures taken in the past, largely to help micro entities, were listed again.

All in all, then, not a Budget to set the business world on fire- Lino Spiteri

In an election quarter, that is understandable. The minister, though, could still have been true to himself and drew his picture on a macro-economic canvas. That’s what budgeting is all about. By sticking to largely micro measures, though good in themselves, he did not draw the promised road map.

It was not a curious exercise. Cynically, it was inevitable. Less inevitable was the reaction given to the Budget by the employers’.

Only the representatives of the tourist sector came out to say that they expected more, after years of eating into their profit margin. Tourism has been doing well this year. That came after years when hoteliers had to eat out of past reserves and to struggle to make ends meet. They pointed out that they are still not in a position to make the refurbishments and renewals essential to upgrade their product more than they have done so already out of very scarce resources.

The employers’ association too tried to cast a macro look at the Estimate of Income and Expenditure for 2013. I was surprised, however, that as a whole the employers’ side barely seemed to notice the few tax increases rolled in to finance some of the spending measures.

That nobody commented or complained about cigarette increases was neither here nor there. It is now customary for finance ministers to make smoking costlier. If only it had the necessary health effect and reduced smoking translated into lower government revenue.

But, despite every kind of health warning, smoking is inelastic. Its counterpart is higher expenditure under the health votes. Less understandable was the silence with which an increase in excise duty on cement and on fuel was greeted.

The construction lobby, now very well organised and articulate, was cock a hoop over the measures taken on its recommendations. They are intended to try to breathe new life in the quasi moribund construction industry. Some of the measures, like extending to seven years the period a seller could decide to be taxed against cost or at a flat rate of 12 per cent, was more than overdue – so much so, that I doubt that it now has a high value, though new developers might disagree with that.

At the same time, the Finance Minister announced an increase on the excise duty on cement. In the past, developers used to grow hoarse complaining that this raised building costs. This time round, not a word.

Similarly regarding the 2c per litre increase in excise duty of petrol and diesel, which will be higher than that by the time users pay at the pump. In the past, employers used to stress that fuel was an important component in their cost structure. Now we are in a situation where the international price of fuel oscillates and we have to lump increases.

And the Finance Minister has embedded a non-oscillating increase on fuel. Such silence is mystifying. Sometimes I wonder whether it has anything to do with the fact that a general election is literally round the corner, though why that should seal people’s mouths is odd.

Otherwise, as a generality, the Budget does not have much to make employers stand up and take notice. Except that as part of the middle class they are going to get a regressive increase on more than one count.

One is the abolition of duty on residences transmitted to offspring. The higher the cost of the residence, the bigger the benefit to the recipient.

The other is the belated opening and cutting of the rate on incomes between €20,000 and €60,000. That leaves a neat amount of folding money to salaried employers as well as to salaried employees. It has another effect on employers, though. It now becomes more advantageous to company shareholders to receive distributed profits, rather than to leave them in their company as retained profits.

That is not necessarily an advantage to a company that finances part of its growth out of retained profit.

All in all, then, not a Budget to set the business world on fire. But not one to act as a wet blanket on its aspirations either. Consumption, among other things, should increase as a result of most of the Budget measures. That should please importers and the rest of the distribution trade. That is another strange factor – retailers in particular do not as yet seem to appreciate this factor. But then most people might be wondering whether the Budget measures will become a reality, or not.