The government has launched the Budget 2009 public consultation process but, from what has been said for the past weeks and specifically by Finance Minister Tonio Fenech at the press conference last Tuesday, it is evident that the people should not expect much. They should expect very little indeed.

For one thing, the first budget after an election is always the “worst” for the simple reason that any unpopular decisions that need to be taken are taken now. Governments do play the political game of tightening the belt at the start of their term in office, and gradually relax their grip to present a bountiful budget just before the election with the aim of being re-elected.

It has regularly happened in Malta, and we should not think that things have changed in this regard. Just as much as the government, since being returned to office in March, has taken some rather tough decisions in the hope that the controversy would have subsided by the time another election is called, any other tough choices will have to be made now.

And the excuses for this are all there for everyone to see, considering what has been happening all over the world in the past months. The government has for long been passing hints that the budget for 2009 will not be a popular one.

The way Mr Fenech spoke last Tuesday makes it clear that the government will not be in a position to hand out any goodies. It is expecting less revenue from taxation, it is not expecting to reach the projected four per cent economic growth and the decrease in the price of oil, although it has its good effects, indicates a worldwide economic slowdown.

All this, together with the crisis that has hit the financial markets worldwide and has led to the collapse of banks in the United States, paints a rather dull picture.

In a globalised world, we cannot expect to be left out of the current difficulties that are being experienced everywhere. We are not isolated from the ripple effects that have hit each and every country, and from which the world needs time to re-emerge.

Minister Fenech has denied that the budget will be austere, but stopped short in saying whether the government will continue cutting down on taxes as it has done for the past two years.

Before the election, the government had proposed further tax cuts, and this quote is lifted from a report carried in this newspaper on 6 February, just two days after the election date was announced:

“Among the electoral pledges to be enacted by a future Nationalist government and listed out by Dr Gonzi yesterday morning was an upward revision of the 15 and 25 per cent income tax bands and a reduction in the maximum 35 per cent income tax rate to 25 per cent for those earning up to e60,000 (Lm25,758) per year.”

Matters have changed so much since then, and the people will have to wait some more before this will come to be.

But probably the most important quote given by the minister – which gives away the government’s intentions – was that the government’s actions will be

tailored according to the surrounding economic

scenarios.

Considering the drop in revenue and the ongoing world crisis, the “surrounding economic scenarios” do not give the government any leeway in presenting a popular budget.

In spite of an opposition that continues to put pressure on the government to maintain its pre-electoral promises, and with the employers and unions playing tug-of-war in their demands and requests, the government will have to present a “controlled” budget, and blame it on the world economy.