Last Friday Prime Minister Lawrence Gonzi announced that the budget for 2009 will be presented by the government on 3 November.
It will be the fifth budget to be presented by a Lawrence Gonzi government, the first that will not be delivered by the Prime Minister himself, after he relinquished the Finance Ministry portfolio to Tonio Fenech following the last election.
The presentation of the budget will also arrive later in the year when compared to the last two budgets, which had been presented in mid-October (18 October in 2006, and 15 October last year). It is closer to the 2005 budget in terms of dates – that year the big day was 31 October, whereas the first Gonzi budget in 2004 had been presented quite late in the year, on 24 November.
The bringing forward of the budget to mid-October had been a positive idea because it gave more time for industry to prepare its plans for the following year – based on the measures that were announced – and to allow for a politics free Christmas season. There had been times in the past when the budget was discussed in Parliament until mid-December, and this was not helpful to what should be the busiest time for business.
This time round, the government was unable to stick to its plans – it originally wanted to keep to its mid-October appointment this year as well – both because of the volatile international situation and also because of the Prime Minister’s commitments in Asia in the coming days.
Still, with fewer ministries – eight against the 14 in the previous term – the debate on the budgetary estimates in Parliament will still be wrapped up before the end of November, allowing for politics to cool down to allow a more serene Christmas month.
The presentation of the budget will be a big test for the government, but also for the opposition too.
The government has been inundated with requests from constituted bodies, organisations and individuals; yet its biggest hurdle will be to find a compromise between the difficulties that Malta, like most countries, is facing because of the great financial turmoil the world is experiencing, and the exigencies of the local situation.
Various calls have been made, for example, for the government not to increase the water and electricity tariffs and, although these will not necessarily form part of the budget, they will still have a massive impact on business and society in general. The recent reduction in the price of oil – it now costs half what it used to only three months ago – might give the government some leeway in managing this burden.
For its part, the opposition’s reaction to the budget will also be a way to gauge any difference they might be employing in their approach. Most of all, it will be a serious test for Joseph Muscat, who will be replying to the budget as Opposition Leader for the first time. There will be great expectations as to what the opposition will say after the budget – for many years, it adopted very negative tactics; since Dr Muscat became leader, it is more positive and is not afraid of expressing agreement with the government.
The budget will serve to see whether this was just a line taken during the first few months of a new leadership, or whether the opposition, while keeping its role as a watchdog, is prepared to be more cooperative.
These are not easy times, and the government must be very cautious in the way the current situation must be tackled. The effects of the financial meltdown will be felt no matter what we do; it’s up to us to see that they are as minimal as possible.