There can be no doubt that the fiscal deficit will be below the €410 million gap recorded up to November, as the Finance Minister assured the public via The Times (December 28). Nor can there be any doubt that it will pass the forecast in the 2009 budget a year ago. Finance Minister Tonio Fenech told The Times as much in the same interview.
Although we are now right at the end of the year, he preferred not to commit himself to firm figures. In a sense Mr Fenech spoke in wide generalities. Asked to comment on the latest National Statistics Office financial data on Sunday he "appeared confident" that "in a month's time" the statistics would bring the deficit down "to roughly conform" with the budget projections.
I'm sure we should not have to wait another month to have more precise information regarding the 2009 outturn. The NSO will have to wait about that long to be able to process the data given to it by the Finance people, and pass them on to the public. But that data would already have been given to the Minister.
It is available to the Treasury on a month-to-month basis. The hefty income tax and other payments due in December must have already reached the Exchequer by now. The Minister - not the NSO - could give a near-as-dammit outturn. He prefers to be cautious and no one can really blame him for that. So, instead of a strong approximation he says that he cannot say "with precision" whether the government will end with a deficit equivalent to 3.8 per cent of GDP at current prices as forecast in the 2009 Budget Speech, "or of 3.7 or four per cent". But the deficit will be "nowhere near the mark" the November figure would suggest.
Mr Fenech sounded a little cavalier with his percentage variations. It has to be borne in mind, however, that he has to base himself on two sets of indicators. One set, the absolute amount of revenue and expenditure received by today, will yield the Minister the absolute deficit (which will be adjusted for NSO purposes to take into account all the expenditure of the central government).
The estimate of Gross Domestic Product at current market prices will take some time more to work out without risking going public with provisional figures that are subject to statistically significant variations. So the Minister prefers to wait.
Waiting will not harm anyone. We are now talking about water under the bridge, anyway. Nevertheless the volume of financial water that has in fact flown by will prove to be an indicator of how the government expects to perform during 2010. This year (2009) it will have performed somewhat worse than expected a year ago. By how much, and why? The "why" is very important to know. After another of the W questions has been answered - "where" - the Finance Minister will know whether his hard efforts to keep the spending ministries and the overall level of government expenditure within strict limits will have worked, or not.
Moving forward he will also know where he has to clamp down harder and demand more tightening up. The Budget Speech for 2010 has already made it clear the Inland Revenue Department - to be part of a unification of the taxing departments - will be sniffing the fiscal trail more closely to ferret out tax evaders.
A fair number of them have been given more than one opportunity to come clean. There were amnesties, at a price, on undeclared funds invested overseas, similar to amnesties offered in Italy, another country notorious for its shameless tax evaders. This year considerable advantages were offered to those who had income tax in dispute and outstanding for a number of years.
That still leaves a perception of quite a lot of evasion going on, starting with the imposition and collection of VAT and - through that unblazed trail - of earnings.
The unified tax department will have a lot to do once it gets going. We still have to see whether the fiscal behemoth will operate more efficiently than having three tax departments (IRD, VAT and Customs & Excise) working separately.
Let's hope it will. Tax evasion hurts not just the government of the day, but honest taxpayers as well. This was among the sound points made by the Bishop of Gozo when he came out with a welcome clear declaration against fiscal immorality, a statement which the Archbishop could do worse than reiterate.
Fiscal policy and the financial outturn will remain high on the agenda of discussion and action during 2010. It is not just that the deficit has to start approaching the three per cent of GDP level demand through our EU membership. It will enable the government to be clearer about what sustainable revenue flow is available to it.
It needs to know that because the demands on the government to help massage the pain of, say, the hiked up water and electricity tariffs are bound to rise and rise.