One need neither be an economist, financial wizard nor political analyst to realize that Budget 2006 had one sole purpose – that of trying to camouflage the damaging effects of “hurricane Gonzi” that took Malta by storm a few days earlier when the new energy rates were made public.

The worst mistake one can commit is to treat the budget in isolation from the energy rates of the week before.

It is only by coupling them together that one can assess whether throughout 2006 Maltese families will be either better or worse off.

In spite of its patina of blandness Budget 2006 is also full of incongruities and contradictions.

While the prime minister told a weary group of journalists – who had just had the patience to sit through his two and a half hour long diatribe – that tax revenue was due to increase due to the predicted increase in economic activity, the budget itself announced that economic growth next year is merely expected to grow by 1.1 per cent – a figure which compares miserably with the 3.1 per cent inflation rate predicted for next year.

The same can be said for the PM’s hollow boast of an increase in employees who rely on part-time work as their main source of income. This is primarily attributable to the fact that full-time job opportunities have simply dried up and that most employers are offering part-time employment where normally a full time job would have fitted perfectly.

The claim that export volumes have not gone down is nothing to boast about, since this merely proves that our competitiveness is being eroded so fast that we are being compelled to export our goods and services at even lower prices than in the past.

Malta Enterprise has boasted of the creation of some 600-plus new jobs without specifying the time frame over which such new jobs will be created. What they failed to point out was that if one particular denim factory does close down shortly – as intimated in the recent weekend press – this will immediately neutralise the new jobs in the pipeline since it currently employs more than 700 full-time employees.

My biggest reservation about the budget is that it carries no stimulus for economic growth.

It was somewhat ironic that on budget eve former finance Minister John Dalli spelt out his budget expectations in another English language Sunday paper which do bear repeating.

If my memory serves me well he stated that :

• the country needs a catalyst to help it restore some of its lost confidence.

• Maltese businesses are currently facing severe cash flow problems.

• Bureaucracy is still rampant.

• Measures are needed to give a fresh impetus to local business.

• There should be greater access to finance for local SMEs.

• Malta is in dire need of increased investment in research and development.

To my mind, none of these genuine concerns have been addressed by the budget.

Even worse he predicted that the best way to reduce our deficit would be through economic growth. Somewhat tongue in cheek he asked whether we will be experiencing economic growth after all? A query which soon found its reply in the meager 1.1% growth figure announced by the PM himself in his capacity of Finance Minister.

One particular area which has remained clouded by lack of transparency has been the oil procurement sector so much so that even John Dalli was compelled to argue that he was not satisified with the manner in which Enemalta carried out its fuel procurement, since he did not have the foggiest idea how it actually went about its business.

While certain local dailies have been doing their best to boost Gonzi’s image through photos of his attending Sunday mass on budget eve, Dalli did not mince words. Lawrence Gonzi seems to rely far too much on civil servants he claimed, adding that he does not seem to have the time to go into the fine details of the areas that fall under his brief.

While in all probability private pensions will be introduced early next year, let us hope that they will be strictly voluntary. Even so, government could not have found a worse time to do so since people’s financial resources will be so over-stretched as a result of the recent hike in energy prices, that they will hardly have any disposable income left to inject into private pensions.

It was with all this in mind that in my first reaction to the budget on Smash TV I stated that it was but a feeble attempt to make us forget the devastating impact of “Hurricane Gonzi”.

It will be equally interesting to find out how the liberalisation of petrol, gas and diesel purchasing and distribution will work out in practice, particularly by way of guaranteed supplies and reserve stocks as well as regarding the much desired stability of prices.

While I have nothing against public-private partnerships government’s record in this area has been sluggish and far too modest so far to merit any praise.

The same can be said for the poor results in making venture capital available particularly to industries at the startup stage.

What is certain is that we have at least another year to go without accrual accounting.

While some people might be impressed by government’s deficit reduction, these figures warrant closer scrutiny as the performance of previous Nationalist finance ministers has shown that there has been more than one occasion where government relied on accruals, by postponing payments to medicinal product importers and construction contractors to balance their books at end year by shifting them to the next financial year.

One sincerely hopes that Dr Gonzi and his side-kick Tonio Fenech have not resorted to this hoary kind of ball-game.

If the budget deserves any credit it is for the slick manner in which it has been written, sounding fresh and imaginative, while recycling and repackaging ideas, without producing or promising anything really new.

CHOGM will no doubt provide the necessary distractions.

But by the time tax payers start receiving their newly upward revised bills early next year they will have already forgotten all about CHOGM and the prime minister’s feeble attempt to camouflage the devastating effect of “Hurricane Gonzi”

e-mail: [email protected]

Leo Brincat is the opposition spokesman for Foreign Affairs and IT.

One need neither be an economist, financial wizard nor political analyst to realize that Budget 2006 had one sole purpose – that of trying to camouflage the damaging effects of “hurricane Gonzi” that took Malta by storm a few days earlier when the new energy rates were made public.

The worst mistake one can commit is to treat the budget in isolation from the energy rates of the week before.

It is only by coupling them together that one can assess whether throughout 2006 Maltese families will be either better or worse off.

In spite of its patina of blandness Budget 2006 is also full of incongruities and contradictions.

While the prime minister told a weary group of journalists – who had just had the patience to sit through his two and a half hour long diatribe – that tax revenue was due to increase due to the predicted increase in economic activity, the budget itself announced that economic growth next year is merely expected to grow by 1.1 per cent – a figure which compares miserably with the 3.1 per cent inflation rate predicted for next year.

The same can be said for the PM’s hollow boast of an increase in employees who rely on part-time work as their main source of income. This is primarily attributable to the fact that full-time job opportunities have simply dried up and that most employers are offering part-time employment where normally a full time job would have fitted perfectly.

The claim that export volumes have not gone down is nothing to boast about, since this merely proves that our competitiveness is being eroded so fast that we are being compelled to export our goods and services at even lower prices than in the past.

Malta Enterprise has boasted of the creation of some 600-plus new jobs without specifying the time frame over which such new jobs will be created. What they failed to point out was that if one particular denim factory does close down shortly – as intimated in the recent weekend press – this will immediately neutralise the new jobs in the pipeline since it currently employs more than 700 full-time employees.

My biggest reservation about the budget is that it carries no stimulus for economic growth.

It was somewhat ironic that on budget eve former finance Minister John Dalli spelt out his budget expectations in another English language Sunday paper which do bear repeating.

If my memory serves me well he stated that :

• the country needs a catalyst to help it restore some of its lost confidence.

• Maltese businesses are currently facing severe cash flow problems.

• Bureaucracy is still rampant.

• Measures are needed to give a fresh impetus to local business.

• There should be greater access to finance for local SMEs.

• Malta is in dire need of increased investment in research and development.

To my mind, none of these genuine concerns have been addressed by the budget.

Even worse he predicted that the best way to reduce our deficit would be through economic growth. Somewhat tongue in cheek he asked whether we will be experiencing economic growth after all? A query which soon found its reply in the meager 1.1% growth figure announced by the PM himself in his capacity of Finance Minister.

One particular area which has remained clouded by lack of transparency has been the oil procurement sector so much so that even John Dalli was compelled to argue that he was not satisified with the manner in which Enemalta carried out its fuel procurement, since he did not have the foggiest idea how it actually went about its business.

While certain local dailies have been doing their best to boost Gonzi’s image through photos of his attending Sunday mass on budget eve, Dalli did not mince words. Lawrence Gonzi seems to rely far too much on civil servants he claimed, adding that he does not seem to have the time to go into the fine details of the areas that fall under his brief.

While in all probability private pensions will be introduced early next year, let us hope that they will be strictly voluntary. Even so, government could not have found a worse time to do so since people’s financial resources will be so over-stretched as a result of the recent hike in energy prices, that they will hardly have any disposable income left to inject into private pensions.

It was with all this in mind that in my first reaction to the budget on Smash TV I stated that it was but a feeble attempt to make us forget the devastating impact of “Hurricane Gonzi”.

It will be equally interesting to find out how the liberalisation of petrol, gas and diesel purchasing and distribution will work out in practice, particularly by way of guaranteed supplies and reserve stocks as well as regarding the much desired stability of prices.

While I have nothing against public-private partnerships government’s record in this area has been sluggish and far too modest so far to merit any praise.

The same can be said for the poor results in making venture capital available particularly to industries at the startup stage.

What is certain is that we have at least another year to go without accrual accounting.

While some people might be impressed by government’s deficit reduction, these figures warrant closer scrutiny as the performance of previous Nationalist finance ministers has shown that there has been more than one occasion where government relied on accruals, by postponing payments to medicinal product importers and construction contractors to balance their books at end year by shifting them to the next financial year.

One sincerely hopes that Dr Gonzi and his side-kick Tonio Fenech have not resorted to this hoary kind of ball-game.

If the budget deserves any credit it is for the slick manner in which it has been written, sounding fresh and imaginative, while recycling and repackaging ideas, without producing or promising anything really new.

CHOGM will no doubt provide the necessary distractions.

But by the time tax payers start receiving their newly upward revised bills early next year they will have already forgotten all about CHOGM and the prime minister’s feeble attempt to camouflage the devastating effect of “Hurricane Gonzi”

e-mail: [email protected]

Leo Brincat is the opposition spokesman for Foreign Affairs and IT.