The Finance Minister has provided so much food for thought in his address to the social partners on Tuesday as the government makes its final preparations for the presentation of the budget for 2023.

Minister Clyde Caruana said that the government will go ahead with giving a Cost of Living Adjustment of between €9 or €10, much to the chagrin of the employers, who will have to take on the burden. Once this budget is over, there will be a discussion on how to proceed, with some constituted bodies already making their suggestions. The Malta Employers Association, for example, is suggesting that the COLA should never be below €2.50 but not more than €6 for five years starting from 2024. This, in their words, will give more stability.

But Caruana reminded one and all that the COLA would have been much higher than the projected €9 or €10 if the government had not chosen to subsidise energy costs. It is a well-known fact that, over the past months, and mostly because of the war in Ukraine, the price of energy has shot up. In Malta, the government has chosen to absorb the increase and not pass it on the consumers and businesses. If the government had done so, the COLA would have shot up to €25 per week, he said, a situation that would have been crippling to many.

We did not subsidise energy for political reasons, but because it makes sense, the minister added.

Something has to give, however, and in this respect the government is planning to cut down €200 million from its expenditure for the coming year. Ministries have been tasked to reduce their costs. What one hopes is that the cost-cutting exercise will not affect essential services, such as health and education. There are many ways through which the government can reduce its expenses. One of them is terminating those cushy jobs many blue-eyed boys and girls have been given.

Added to this, there will be some projects which were to be wholly-funded by the government which will have to wait a little bit longer to be implemented. If they are not a priority, they will be left for another time. Projects which are funded by the European Union will continue as planned. This makes sense, as otherwise the funds – which have to be used within a pre-established deadline – will be lost.

We are living in a very difficult time. The Covid-19 pandemic is not over, although the numbers have dwindled in the past weeks. Scientists believe that the virus will continue to affect our lives for years to come. The war in the Ukraine has added to the burden, and its effects on the world economy have added to the burdens governments and their people have to face.

That, in all these circumstances, the government does not plan to introduce new taxes is, in itself, good news.

We have been told that it will be a social budget. We will wait and see.