The aftermath of Budget 2016 as unveiled last Monday lacked in one significant factor, a factor that has characterised most Maltese government budgets in recent memory: the hype factor.
In a country where politics can easily be considered to be one of the most popular spectator sports, the annual government budget is a major fixture in all political pundits’ and observers’ calendars. Not only does the government reveal every autumn how it intends to spend the people’s hard-earned taxes, which is always a source of controversy, the government also usually reserves some major policy announcements for the Budget Speech.
Some budgets have been preceded by stormy marathon meetings of the social partners comprising the Malta Council for Economic and Social Development, others have been hyped up with such expectation that the nation waited on tenterhooks for Budget Monday.
Not so this year. Not only was this budget preceded by practically no hype whatsoever, not even the Sunday newspapers had any of the usually expected budget ‘leaks’ the day before the finance minister unveiled the government’s financial master plan for the coming year.
Not only that, the aftermath of Budget 2016 was hardly an aftermath at all. No raging controversies over the government’s spending plans or policy announcements for the coming year.
In fact, the main controversy to have emerged from Monday’s reading of the Budget Speech was the fact that it did not tally with the Budget Document that had been tabled in the House. The government was put in a more than somewhat embarrassing situation in which a draft budget had been distributed containing a number of policies that did not make it through to the eventual final draft.
This in itself will give the Opposition a lot of fodder. As an example, the Opposition Leader was still referring to the gross error yesterday when he noted how the government had originally planned to increase benefits for the disabled but later scrapped the notion in the final draft.
It is true that the budget is a perpetual tightrope act, one between providing enough public capital expenditure and business incentives to keep the wheels of the economy rolling, while at the same time mending and expanding the public welfare system’s safety net for the deserving.
And rest assured that this year was by no means the first time that budget measures were rethought at the 11th hour.
Having said that, this year’s budget was an exercise in gentle prudence, one aimed – as it should be – at fostering growth and increasing the number of people contributing to the economy. And it was interspersed with new policy announcements such as a 30 per cent increase in road maintenance funds, moving ahead with developing an undersea tunnel between Malta and Gozo, the relocation of the Institute for Tourism Studies to SmartCity and the setting up of a corporation to regenerate the St George’s Bay area, along the lines of that set up years back for Valletta.
Businesses have, by and large, been positive but they have also been critical over a lack of vision for the traffic problems plaguing the country, the price of fuel and the price of utilities.
But on the economic performance side, the government has good reason to be positive. Figures from the EU show Malta’s inflation rate at a healthy 1.6 per cent, exports have increased by eight per cent over the first eight months of the year, the numbers of Maltese at-risk-of-poverty or social exclusion finally began to decline in 2014 after years of rising.
On the social front, the budget continues to address this latter section of society, those at risk of poverty or social exclusion. It holds a number of measures for groups such as single earner families with children, youths and the elderly.
Such budgetary measures include the in-work benefit scheme being extended to include low-income families dependent on a single breadwinner; tax-free income thresholds have been raised for single, married and parental tax computations; and minimum pensions for single pensioners and married couples have been raised.
These measures are all aimed at reducing the atrisk-of-poverty or social exclusion rate, a difficult balancing act to achieve with a pro-business budget such as that for 2016.
But the fact that no real sparks have yet flown in the immediate aftermath of Budget 2016 does not mean there are none coming.
The stage is now set for the Opposition Leader to formally react to last Monday’s Budget Speech. He will do that tomorrow evening and it will be more than interesting to see what, exactly, that reaction will be, and whether he has anything up his sleeve. The Prime Minister will reply to the reply on Tuesday, after which Parliament will settle down to days and days of approving the budgets of each and every ministry.
After that, it will be back to business as usual and the budget hype, if there is any to be had at the end of the day, will dissipate once again until next autumn.