The government aims to close 2013 with a deficit of 2.7% of Gross Domestic Product and intends to get this figure down to 2.1% by the end of 2014.

Today is, of course, budget day. It is a far cry from when families used to be glued to their television screens to see how much tinned meats were going to increase – by a few mills or cents.

In this day and age, our financial planning has evolved and is more about a year long strategy at maintaining a sustainable economy that it is a penny counting exercise.

In an interview published in our sister paper, The Malta Independent on Sunday, Finance Minister Edward Scicluna promised “a realistic budget that is conscious of the financial situation but which will seek to make the most of it nonetheless.”

The Finance Minister said that the country cannot focus only on economic growth and ignore the deficit as investors and credit rating agencies would lose faith in the country. In addition, the government is set to reduce its borrowing by €50 million to continue to reduce the deficit and will need to make up for the shortfall by introducing indirect taxes – so far, the only ‘givens’ are increases in tax on alcohol, cigarettes and cement.

The European Union stipulates that a member state must bring its deficit down to 3% - the benchmark figure established in the 1992 Maastricht Treaty. It also stipulates that debt must not be greater than 60 % of GDP. What many people seem to overlook is that while a deficit may be brought to below 3 %, it still means that sovereign debt continues to grow. Therefore, in order to bring debt down, countries have to actually aim for a surplus.

Professor Scicluna is expected to announce expansionary measures to incentivise investment. There are rumoured to total €27 million. And there have also been reports suggesting that the government will also announce the launching of a feasibility study on an alternative mass transport system with EU funds. There will also be announcements on new traffic regulations, such as the prohibition of horses and heavy vehicles on roads on certain hours. A reduction on taxes for part time work, and an upward increase on disability and widowers benefits are also expected.

Of course, the proof of the pudding is in the eating and the whole of Malta will be looking to the government to honour the pre election pledge of reducing electricity tariffs, which have long been a source of complaint since prices were hiked up drastically a few years ago. The government has promised that it will work to be more equitable with the way wealth and opportunities are distributed and this is its first real test. Last year, the budget was the one originally moved by the PN in government, but this time, it’s been wholly drafted by the Labour administration. While no major shocks are envisaged, the anticipation about the indirect taxes that will be introduced, is palpable. We shall have to wait and see. Meanwhile, this publishing house invites readers to follow the budget on our news portal, www.independent.com.mt with live text coverage, as well as audio and visual features of the event.