By now you are more than familiar with the contents of last Monday’s budget speech.  All 250 positive measures announced in the budget were splashed all over the front pages of the newspapers some of which even carried special editions.  Moreover, in the last few days, the Finance Minister’s speech was debated, discussed and dissected on TV and radio giving more exposure to the Labour Government’s priorities for 2014.

I too feel that it is appropriate to focus this week’s column on the budget in order to contribute to the public debate about Government’s plans for the next financial year by making some observations.  

My first observation is about the post-budget Press Conference by Prime Minister Joseph Muscat during which he explained  the Labour Government’s plans to achieving a stronger economy, easing the pressure of living costs, strengthening social services and making work pay. When addressing the media and the public through a live broadcast, Dr. Muscat came across as a very confident, convincing and credible Prime Minister.  He could look people straight in the eye because many of the promises which he made to the electorate before the last elections were included in the budget speech.  For Prime Minister Joseph Muscat and the Labour Government, Budget 2014 is the start of the implementation of the road map we promised in the electoral manifesto in order to put the public finances on a stronger footing and create a fairer society. 

Before the last election the Nationalist Party used to poke fun at the Labour Party’s plans calling the roadmap as nothing but empty words meant as an electoral ploy to impress and take the electorate for a ride. As they did with respect to our promise to reduce water and electricity rates, the Nationalist Party was asking what this road map was all about.  Well last Monday they were given all the answers.  The road map is so credible that it elicited very positive comments from various quarters not least from leading economists who acknowledged that the projections outlined in the budget are credible, realistic and positive. One of them went so far as to say that he was surprised at the scale of the budget’s realism adding that Malta had not had a similar budget for years. 

The Finance Minister’s budget speech was also applauded by  the majority of the social partners who by and large welcomed the package of measures announced.  People who have been following the local political scene for years remarked that they do not remember any other instance when a Budget speech, under any administration, received such a strong and wide accolade than last Monday’s address by the Finance Minister. 

The only exception is, of course, of the Nationalist Opposition, in particular the Leader of the Opposition.  Listening to the Finance Minister announcing that in less than seven months the Government has managed to reduce the deficit to below 3% of GDP I could not help remembering the Opposition Leader’s negative remarks before the last election that with the Labour Party in Government Malta would soon be asking for a bailout and that a Labour Government will drive the country finances against a concrete wall.  Last Monday’s budget is proof that Malta’s finances have never been on such a sound footing as they are under a Labour administration.

It is acknowledged that there were great expectations for last Monday’s budget primarily because this was the Labour Government’s first real budget since the March elections.  People were curious to find out whether the Government would keep its word and start delivering on its electoral promises.  And they were not disappointed.   On the contrary there was satisfaction all around.  There were also many surprises, not of the kinder type that the Leader of the Opposition was expecting. 

For example, few expected that the registration tax on cars which was levied unfairly under the previous administration would start being refunded as from next year;  or that stamp duty on the value of property for first time buyers would start being waived; or that student stipends will be increased.  Also few could believe that no new taxes were being introduced in spite of the many increases in social benefits that were announced and other family friendly measures that were introduced that will benefit those most in need including pensioners, single parents and working mothers.  The cherry on the cake was the confirmation of the reduction in utility bills which was the main electoral platform on which the Labour Party cruised to victory at the last election. 

Of course increases were announced in a number of indirect taxes including on cigarettes, alcohol , cement and fuel.  In the case of the latter case, however,  the increases will be more than compensated by the fact that the price of diesel will remain stable until March 2014 and that petrol will increase only by 1c. At the same time Government is making every effort in order to secure stability of petrol prices in Malta.

On balance the Labour Government’s first budget is very positive.  It will reward those who work hard, will leave more money in people’s pockets, put the country’s finances on a sound footing and will help everyone who wants to earn and learn.  We could not have had a better start.

Dr. Ian Borg is the Parliamentary Secretary for EU Presidency 2017 and EU Funds