In last year’s Budget Speech, the government proclaimed that “the years of austerity were over” and that the Maltese economy had “turned a corner”.

But then, when it came to give people back a little of what they had sacrificed, the government grew pusillanimous got cold feet. As a result, while the government had projected it would lose Lm12 million in tax revenues, it ended up losing half that amount as a result of increased economic activity.

On the other hand, the GRTU leadership said in a press conference on Friday, the middle class, especially the self-employed, and specifically those in the Lm6,000 – Lm10,000 income bracket, are having to face living on even slimmer earnings due to higher costs for almost everything, especially anything connected with electricity and mortgage payments.

Life has become very tough for them, especially young couples with small children.

The growth there has been in the economy, Director General Vince Farrugia said, came from some sectors of the economy but others are still in a slump.

Inflation has been very low in the past months because it is being compared to last year’s when the country faced the impact of the surcharge, but it is ranking up and will get worse by December because of the inefficient reforms the government has put in the pitkali and fish market.

Mr Farrugia was also scathing about the few agreements the government has made with some big importers who have promised they will not raise prices before March. He claimed that some of them had increased their prices before they signed the agreement and anyway such an agreement will distort the market.

As to the cost of living increase, this should be a 50c a week rise, if the government were to go by the inflation index. The government may be tempted to give a Lm1 a week increase but employers would find it very difficult to agree, let alone a Lm1.50 increase.

The solution is less expenditure by the government: people in a squeeze get very angry any time they see the government being profligate with other people’s money, as they tend to be in an election year. It is shameful that even the COLA increases are taxed, when they are there to cushion inflation, not really earned that is.

Mr Farrugia warned that unless something was done about the property market, people could get hurt next year. And, less leeway for the middle classes will have only one effect: that of fuelling the black economy, as the middle class tries to cut corners. He also announced a reform of the eco-tax.