The 2008 Budget provides a sense of continuity to the government’s policies as well as its intention to converge towards its European objectives, economist Gordon Cordina, adviser to the Federation of Industry, said.

The government has been successful in its bid to adopt the euro through its fiscal tightening. Its next objective is now to achieve the EU average level of income for the Maltese. To this end, the revision of income tax bands will increase people’s disposable income as well as boost Malta’s economic growth.

On a less positive note, the government’s decision to anticipate next year’s cost of living adjustment (COLA) to this year is not a solution in itself. This will not be enough to avert the expected rise in the price of cereals. It may smoothen things up from this year to the next; however, the rise in price must be averted through an increase in income.

The boost in expenditure towards enterprise is a very positive feature of this budget, as is the increase in the education budget.

The government’s decision to give the children’s allowance to all families will certainly eliminate the disincentive for some families to work.