The government is set to perform its yearly balancing act tomorrow evening, and this year the budgetary tightrope is perhaps thinner and longer than ever.

The ever-rising public deficit and competitiveness issues need to be reined in and rationalised with respect to the increasing cost of living.

But most of the population, at least those who avidly follow the news, no longer awaits the budget speech with bated breath. By now, the exercise of publishing a pre-budget document pretty much puts most of the cards on the table six months before budget day and revelatory pre-budget discussions have become more and more frequent.

This year in particular, we know there will be no income tax hikes; we know what the cost of living adjustment is to be next year, along with other piecemeal information being leaked out through the press for public consumption.

But such leaks, of course, constitute the positive budgetary elements, and not those more unsavoury in nature.

If there was ever a time for a harsh budget, that time would be now – on the back of the international recession, with the European Commission having forecast just this week only a “fragile recovery” for Malta in its autumn forecast, and being midterm between elections.

In a front-page story in today’s issue, the finance minister speaks of possible new ways of weaning people off benefits and entering, or re-entering, the workforce. Perhaps now more than ever the country needs lateral thinking as opposed to a pure accounting exercise.

Last year, the budget introduced the rather novel concept, for Malta at least, of a community service scheme for those registering for work for over five years. The scheme was packaged as a means of deinstitutionalising the long-term unemployed who fall into a life of dependency on the social welfare system.

There is, however, another side to the measure – to crack down on those who simultaneously register as unemployed and receive the accompanying benefits but nevertheless continue to work without declaring the fruit of their labours. This has been a persistently hard nut to crack over the years, and starting with those who have been abusing the system for so long is a worthy starting point.

All this, of course, is not to say that there are not the genuine cases – some of which are intergenerational – of people becoming bogged down in the welfare system and who have developed an aversion to work, content to continue living off state benefits.

In those cases, the scheme will undoubtedly help those who have real difficulties in finding work, or inspiring them to do so, by giving them a taste of being a more productive member of society while at the same time giving a contribution to the needs of society at large.

Now the government is looking increasingly at extending the ethos to other areas of benefits such as Malta’s unemployed youth, another problem area. It is also an area of contradiction. Malta has one of highest rates of early school leavers and, simultaneously, one of the highest rates of unemployed youths, a situation that begs the question of what, exactly, are Malta’s youths doing when they leave school at 16? Working in undeclared jobs?

It is high time the scheme is adapted and extended to this and other areas.

The Danish example, in which the unemployed under 25 years of age are automatically sent to an educational or training institution on a full-time basis when they register as being unemployed is a very worthy example of best practice. And the finance minister’s vision for implementing such a strategy in Malta either in tomorrow’s budget or in a future budget is a laudable one. It would, for a start, encourage the country’s youth to remain in school while, as in the measure for the long-term unemployed, it will also help prevent abuse.

In the meantime, the government also has to look after the business community, those who, after all, provide employment. After the announcement of a higher than usual cost of living adjustment to be borne by Malta’s businesses next year, the prospect of which so many employers are recoiling, the government will have to provide some sort of sweetener.

Rectifying the late payments situation would be a good starting point, as would the government making good for the eco-contributions it has collected from Malta’s businesses for years but has still not reimbursed them for.

The provision of a properly-working venture capital fund that would provide seed capital for start-up businesses would also be a most welcome development. Malta’s business lobbies have been calling for such a structure for years on end but, so far, despite pledge after pledge, nothing workable has surfaced in such an important area, which, at the end of the day, would see start-up entrepreneurs leaving their current employment for self-employment, with their positions being filled by those looking to enter or climb the labour market ladder.

The country also has its competitiveness issues to address, with all of Europe primed to scramble for each and every crumb of post-recession investment and business. The pre-budget document went into several valid areas to be considered.

With the country becoming more and more focused on the service industry, and with manufacturing move more and more into the higher added value chain, the country needs to address what truly keeps it competitive.

That, however, does not boil down to simply low wages, but rather competitive wages in the respective sectors that it operates in, as well as fostering and nurturing the right and quality skills at reasonable, comparable rates so as to be able to compete in what is bound to become a much more competitive world.

What are needed are creative solutions and that is what we will be hoping for tomorrow evening.