Last week’s budget managed to address the concerns of many different sectors of society. It was carefully drafted on the numerous personal suggestions received, leaving no stone unturned: pensioners, salaried employees, Gozo, animal lovers, theatre operators… all were given a long overdue break.
Bearing in mind the proximity of the forthcoming election, and despite all official denials, it was a political budget focusing on the disgruntlement of the middle classes, and playing to their aspirations.
The Nationalist Party has finally managed to be in synch with the sentiments of the sector it traditionally represents. The government was generous and the handouts were based on the premise that government’s revenue will increase by Lm58 million yearly. And herein lies the rub: the success of Budget 2008 hinges on these figures being reached. Failure to reach these targets will only throw away much of the good work done in controlling the deficit.
The Prime Minister believes that these targets are achievable, and denies claims that they are “a leap in the dark”. Only time will tell. But regardless of whether the targets are reached or not, the incoming government, whatever its hue, will have to pick up the tab. If its revenue falls short of Gonzi’s predictions, the incoming government will be landed with a precarious deficit situation.
Either way, the Labour party’s reaction to the budget beggars belief. How can a popular budget, and an over-generous one at that, ever be described as “too little”? It is clear that the slogan was chosen before the budget was even presented in parliament, evidencing a lack of seriousness on the part of the Opposition.
Rather than resorting to these infantile tactics, the Opposition should have called the budget simply by its name: a political one, resorted to on the eve of an election by a party which has been in government for 18 years. Labour could have discredited the budget on the effects it is likely to have on the country’s competitiveness. One can agree or disagree with this approach, but few would deny that it qualifies as political maturity. But no: Labour decided instead to plaster ministerial faces on a billboard whose central message in no way reflects the mood in the country.
Tomorrow, Opposition leader Dr Alfred Sant has an opportunity to put across in parliament his criticism of the budget. There are many points which could be raised. Is the government’s predicted increase in revenue realistic? If so, which are the revenue streams? Is government banking on an increase in economic activity, which will inevitably lead to higher yields? Is the reversal in the children’s allowance a wise move after years of watering it down? Is it sustainable? Why has government not thought fit to remove departure tax? Has the COLA mechanism been shattered? Is it time that the retail price index is calculated differently? These are all legitimate questions that should find voice in the reply to the budget tomorrow.
The budget has also left unanswered a number of burning issues, which require solutions. Foremost amongst which is the transport problem. One would have expected the budget to address this issue. There is little doubt that congestion in our roads is similar to that in world capital cities, only without all the other modes of transportation available elsewhere. Serious consideration and finance needs to be given to the introduction of a proper system of water taxis, possibly a tram service and why not also an underground service linking the main towns? The budget also fails to address the urgent need to liberalise the taxi system. The mini cab service in Valletta has proved to be a worthwhile experiment, but needs to be extended to the rest of the island.
Let’s hope the budget discussion continues in an atmosphere of tolerance and civility with both sides acting in the national interest.