Money does not create success; the freedom to make it will, the great Nelson Mandela once said. Regretfully, judging by the manner in which he opened and concluded his Budget speech yesterday, Finance Minister Edward Scicluna seems to think success is completely dependent on economic well-being.
At the opening, Prof. Scicluna referred to the distribution of wealth, which, he said, is the fruit of economic growth. The Budget for 2019, he pledged, would further demonstrate how wealth permeates through all strata of society.
In his conclusion, he listed seven reasons why, as he put it, one could say that Malta was living a success. The reasons mentioned were about unprecedented measures, no or lower taxes, a surplus in public finances, an increase in pensions, in-work benefits and free childcare.
The government again wants to ensure some money makes its way to as many people’s pockets as possible. Ensuring there is a fair distribution of wealth is, of course, the right way to do it.
Still, and one is justified in making such observations given this government’s track record, is this being done merely to ‘buy’ everybody’s submission – give them bread and circus, kind of thing – and is it thinking enough long term when making such disbursements?
The economy is going strong, there is no doubt about it, but what if there is some sudden downturn? Are we putting our money where it should go to ensure long-term sustainability?
One can hardly blame the government for boasting about its economic success. Indeed, as long as Malta’s economy is not hit by some big crisis, God forbid, expect the political posturing to continue unabated.
Economic data show a high rate of growth, largely due to the expansion of the gaming industry, financial services and the construction spree, not to mention the sale of passports. Problems here could cause serious headaches, even to those on both sides of the political divide who have learnt to make hay while the sun shines and inflated their earnings.
This may sound like doom and gloom. Though not if one bears in mind what German economist Rudiger Dornbusch once warned: “Crises take longer to arrive than you can possibly imagine but when they do come, they happen faster than you can possibly imagine.”
The Budget for 2019 overlooks all this. Indeed, it keeps promoting the idea that the economy is so strong money will keep coming, even if the expense further rises, the taxpayer finances private initiatives and, worse, no robust incentives are announced to attract new investment and long-term sustainable projects.
Curiously, this Budget refers to a new agency being set up to monitor concessions/contracts issued by the government and ensure that what is agreed actually happens. This can only be a move meant to pull the wool over people’s eyes because there is already a long list of huge projects in which the government allowed the private sector to benefit handsomely to the detriment of the Exchequer.
Examples abound but the deals on power generation, the managing of State hospitals and land speculation are enough to make one wonder what the government is really up to.
No, Prof. Scicluna, invoking economic success is not enough even if many people will today be pleased with the Budget 2019.
This is a Times of Malta print editorial