A unit is to be set up to carry out what has been described as a spending review in all government ministries. At the same time, Finance Minister Edward Scicluna appears all set to start tackling the task of cutting unnecessary expenditure and bring about greater efficiency in public spending.

All this is well and good, considering that, according to the new estimates, Malta ended the last financial year with a deficit higher than the three per cent threshold allowed by the European Union.

Prime Minister Joseph Muscat said his government had been expecting this. But the good news was, he noted, when announcing the revised deficit figure, that they would not be complaining about the situation “but we’ll say how we’ll move forward”.

So, given this foreknowledge, the country’s minuscule size and, also, today’s difficult economic situation, did it make sense for the Government to appoint the largest and most expensive Cabinet Malta has ever had?

Many would argue that it does not, but, in its attempt to justify the move, the Government has argued that the country’s administrative structures work differently to that in other countries and that, ultimately, what counts most is the ‘value added’ to the country resulting from the Cabinet expansion. This, it insists, would more than make up for the extra cost.

Of course, that has yet to be seen. What is more important right now is that the situation calls for a serious check on expenditure.

Raising the costs involved in the running of the Administration from €9 million to €15.4 million is no joke and the Finance Minister ought to be the first to admit that this is now expected to ratchet up pressure in his mammoth task to bring down the deficit and the national debt, about which he spoke with such conviction in an interview he gave to The Sunday Times earlier this month.

There is another point that jars in the context of the island’s financial situation. In the interview, Prof. Scicluna was pointedly asked how, in view of the fiscal slippage, was it possible to retain, as his Government was doing, the top income tax cut for this year and the next two years.

The minister argued that this was not a cut of the top rate of income tax. In other words, those earning more than €60,000 would still be paying 35 per cent.

The Budget, he said, widened the income band for middle income earners. The change would motivate them and encourage them to work more, but Prof. Scicluna admitted that they had to assess the economic impact of the tax cut.

So, again, does this make sense or was it done purely so that the Government, fresh in the saddle, would be able to avoid the flak it would have most certainly received had it decided to suspend the cut?

The Nationalists had suspended an income tax promise when it saw ill-winds coming over this way after the 2008 election and Labour had criticised it harshly for doing so.

This newspaper had strongly criticised Labour for hitting out at the Nationalist government for suspending the tax cut, pointing out that common sense dictated otherwise. Now that Labour is at the helm, it has had no qualms in going ahead with the tax cut. But is this the correct approach to take in the prevailing situation? Is this the kind of good governance that Labour is talking about?