This time last year, the Finance Minister dazzled us with a bonanza of budgetary promises. MaltaToday takes a look at how many of these promises actually saw the light of day
“The budget is a fundamental tool which steers the country in a strategic direction”: a bold statement, uttered by finance minister Tonio Fenech in last year’s Budget speech.
But it seems we are getting used to the annual routine as just an exercise in balancing the country’s books, rather than a guide for where the country is heading. Going by the pre-Budget document, we could be in for more of the same: the only thing that has withstood the test of time in government budgets is the ubiquitous catchphrase that serves as a tagline for every speech.
Tonio Fenech started off his plan for 2009 to bolster “responsibility, sustainability and solidarity.” To achieve these aims, he set out various initiatives, but in retrospect his ‘dream list’ is now looking like just that: a dream.
Last year’s Budget was presented amid “gloomy international economic indicators.” The crisis brought difficulties and various governments and Central Banks had to intervene more actively in their economy to instil confidence. Yet in Malta, when this reality was already in existence during the Budget speech, this scenario was given little attention as government made over-optimistic projections for 2009, and incorrectly projected its own deficit and national debt for 2008.
This year, the government will yet again miss its own set target for 2009 of ending with a deficit of ‘just’ €98.8 million, being 1.6% of the Gross Domestic Product. This could only have been achieved if government collected the amount of tax it planned. The panic button was pressed when government announced yet another ‘year-in, year-out’ amnesty, this time to collect past dues. Having our government reporting on a cash basis, all that gets collected is welcome. The only way the government could reduce its expenditure is by slowing down capital projects or deferring payments. But the ambitious capital vote for this year, if achieved by end-2009, has not materialised, nor even long-term. Launching a ‘retouched’ wharf to receive cruise liners sounds like an old hag who has put on make-up before receiving the parish priest for the annual house blessing.
The Hits
• A definite hit was the Government’s intensification against tax evasion. Alas, such intensification had to be the result of a weakness in internal control from the VAT collectors themselves, who will bring this to fruition.
• Malta Enterprise rose up to the challenge of investing €20 million in industry and at least shows that any invitation for aid, is taken up by industry either out of want or of need. The initiatives falling within the Ministry of Finance also registered some positive results, such as the introduction of General Accounting Principles for Small Enterprises. But then, an accountant by profession would deliver that, wouldn’t he?
• One Parliamentary Secretariat that achieved what it promised, is the Local Councils whichh succeeded in and possibly spending all that was allocated in the interest of having a daily photo opportunity and media exposure.
• A Ministry that did succeed in “trying to achieve” is the one responsible for Education, which has worked for most of the year; except for the teacher and schoolchildren type of holiday period in the summer, as it strived to have the tertiary education sector set-up ready in place for future generations. Yet, the junior Minister within the same Ministry must have been caught out of breath as it strove to “set up our efforts to instil a sporting culture amongst our people.” It is surely a case of the spirit being willing, but the flesh weak.
• 2009 will surely be remembered for the year of free energy saving bulbs. This will be cast in our history books with equal importance as the attainment of Independence some lifetime ago. One thing is certain: whatever the free bulbs cost, the consumer has paid with the increase excise duty on petrol and diesel that was experienced this year.
• The Health Secretariat also reached certain objectives set this year. It must have been some flu jab that led the Ministry to undertake a check-list exercise of what was promised for this year to be launched just before the budget. Reference here is made to the Opening of Premises for Breast Screening. It just so happens, by coincidence, that the first Night Shelter Home opened happens to be within the district voting in the Parliamentary Secretary for the Care of the Elderly.
The Misses
• The first miss for the government’s Budget came with its statement that it was “bolstering the institutions which ensure fair market competition and consumer protection.” If anyone has seen any Regulator able to control pricing, then there must be an army of active pick-pockets, operating in pharmacies when purchase of medicines are undertaken. It is not just the ailment that weakens the human!
• Other misses were experienced when the Government’s target to privatisate Malta Drydocks and Enemalta’s petroleum division have up to now not materialised, together with the absent strategic partner for the Malta Stock Exchange.
• Much pomp was proclaimed as Government announced a program of €124 million on infrastructural works that include roads, factories, schools and other facilities. Probably the ‘other facilities’ included the cost of paving Misrah San Gorg in time for a state visit. Additionally, Tonio Fenech pledged in €61 million on “heavy investment in environment projects”, which must include the mushrooming of ‘Bring-In Sites’. Another €58 million were promised to enhance “our people’s skills” which includes the way the General Public has learnt how to change their home light bulbs having received a free consignment of the latter, and the best miss is the €30 million allocated for alternative energy projects; which must surely be the best way to achieve an alternative by not engaging any energy.
• All these misses will at least lead in Savings of Expenditure and a restraint in the rate of growth of the Deficit.
• Another miss is the plan to set up a Bio Technology Park in San Gwann. This phantom park must still be in its ‘embryo’ stage taking longer to be conceived. Similar to this, all promises to upgrade Malta and Gozo’s industrial zones must have only happened in dreams, as no visible change can be reported.
• Businesses were promised that the Government would reduce the regulatory burden by the end of 2010. At least this year is still within the time frame. This, mirrored by the “setting up of a Commission to investigate unnecessary costs which the public sector is imposing on businesses”, is as effective as the decade-ago Commission for Fiscal Morality, set up by the opposition party then in Government. Another Commission that has not been engaged is the one which had to report by June this year on the strengthening of the Co-Operative Movement.
• However, the best miss by far is the Design Malta division, aimed “to encourage development and creativity in design in Malta”. Surely this must be chaired by the foreign architect who came up with the visual sketches for the entrance to our capital city, who threw in, as an added freebie, a building to house our parliament resembling an overturned transparent match box, neighbouring a headless structure labelled as the National Open Air Opera House – which has less overhead cover than the old Gzira football stadium.
• The Super Ministry was expected to this year “announce its plans for fibre-to homes”. This must have been overlooked by the zealous PRO at the Ministry of Communications, as no Press Conference has been held to “announce” this... though in all fairness, there is still time for the year-end to happen. The Super Ministry has under its portfolio the harbour regeneration. It must have surely been an ego trip to walk along a tunnel bordering a “yellow” garage to re-launch the war rooms, rather than the Heritage Pack and Upper Barrakka Gardens promised for this year!
• The Ministry of Tourism was supposed to have undertaken the “commencement” of works on various touristic zones and beaches in Malta and Gozo. Yet, the only innovation seen to date was the new machine, which was commissioned to clean the Ghadira Sand Zone at night time, now that the area is free from BBQ enthusiasts. It remains to be seen if the Ministry will have better judgment in forgetting the introduction of the bed night contribution planned for next year, which resembles more a tax as much as the ECO – ‘Contribution’ is a contribution for us citizens of this country.
• The job-enhancing initiatives were based on enticing females to return to the workplace with various tax exemptions. However, success is doubtful, as the opportunities were simply not created by the Government or Private Sector.
• Does anyone recall the statement that 6,000 will benefit from an annual measure to refund part of the purchase price for bicycles? Well, if you have remembered it, do not fret, as the bike lanes are still being planned and so no immediate investment to buy a bike is called for.
• Another miss, but more for lack of education, is the take-up for household investments in photovoltaic cells, solar water heating and double glazing. Blame this all on Enemalta, which had to establish a service whereby families would be provided with “personalized advice on how they can cut down in energy wastage and restrain consumption”.The personalised advice was complementary to the stark reality of receiving hefty electricity bills, and much worse, paying them.
But no one will blame the public, as the government failed miserably in its own target market to undertake energy performance audits. • The one missed by most motorists was the experience promised by the government for new and better roads with a €100 million, wide-reaching programme. The only ‘wide’ experienced happened after the opening of the decade long close inner lane at the St Paul’s Bypass.
• The Ministry of Social Policy launched the initiative to have unemployed persons undertake community work. But the lethargy of the core unemployed jars starkly with the eagerness seen every morning at Marsa in the eyes of the immigrants’ community waiting for pick-up trucks.
• No valid assessment is complete without visiting all that was promised for Gozo. However, in this region the “radical transformation of the public transport sector in Gozo” has yet to be experienced, much less implemented.
In the final analysis Going through the length of this article there were more misses than hits in this year’s target. Tune in tomorrow for the budget speech to hear how wrong we got it as the Minister for Finance will announce that the crisis experienced this year was unprecedented, and that we have to thank the wise decision to join the EU, followed by the Euro adoption, for us to be ‘saved’, alive and kicking.
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