I am sure that when the leader of the Opposition improvised his “budget speech” last Monday, he did not go through the trouble of studying and analysing government’s operational statistics (which possibly he does not have) or to quantify the cost of the initiatives that he listed.

Adding on
It looks that he had neither the time nor the inclination to seek advice from those around him from the various government department and who would have indicated the pitfalls in some of the initiatives that he announced.
Faced with a budget that took many pages from his book – not through the plagiaristic accusation that he levied, but through the fact that the ultra social content of the budget – must have created a massive logistical problem for him: his only stratagem seemed to be to show that he could distribute even more. The problem is that he never took the trouble to explain to us, the Maltese Public, how he is going to finance this largesse.
I imagine Alfred Sant sitting before his computer composing his piece, with the budget read the previous Wednesday in front of him serving as his base line. He had to give more, and more and more... and to hell with it.

Children’s Allowance
He promised to revert the Children Allowance System to what it was in 1995. Did he mean that he will remove the ceiling, that he will abolish the present calculation or that he will go back to the same per-child allowance that existed then?
And will he reverse the income tax breaks that were given then to compensate (very generously) any loss in children allowance by some families? Nobody really knows and in any case Alfred Sant would have kept his word by implementing any or a mixture or all this.
And those who really need assistance could be much worse off in the process.

The 1995 reform
I have to once again lay down the reform that we implemented in 1995.
1) We put a ceiling on the income earned by a couple for eligibility to enjoy children allowance.
2) We changed the method of calculation of the children allowances so that the rate per child varied in inverse proportion to income earned.
3) We reformed income tax drastically.
The principle on which this reform was based is that social services should be a way to assist those in need, and therefore all resources available for social services should be focused to improve the quality of life of the population in that sector.

The political argument
Another important principle is that it is ridiculous to tax somebody and then send him a cheque for part of what was taken from him. I believe that the section of the population who is above a certain income level would prefer to be compensated through cuts in direct taxation rather than handouts by government. It would also be more beneficial to the country as this would enhance the incentive to work and therefore productivity.
As a democrat, this is also very important for me that government steps away as much as possible from people’s lives and this tax reduction to handout swap goes some way to achieve this aim.

The result
The result of this reform was the doubling of the children allowance to most recipients and a tax rebate which was also double any allowance lost by any previous recipient. It is to be noted that the tax break was not only received by those who had been receiving children allowance but by all taxpayers.
In the same process we introduced the novel concept of “negative income tax” through the introduction of the supplemental allowance. This was an allowance given to all those whose earnings was below the first income tax threshold and who consequently did not benefit from the income tax reductions.
And in the opinion of the Leader of the Opposition all this was a retrograde step?!