The Malta Independent 30 September 2022, Friday
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TMID Editorial: A budget focusing on stability and sustainability, we are told

Thursday, 22 September 2022, 11:27 Last update: about 7 days ago

The budget date has been set for 24 October.

As more and more budget proposals are put forward by various entities outside of government, the various ministries would also be pushing forward their proposals for possible financing.

Prime Minister Robert Abela outlined the main thrust of the budget for 2023 – stability and sustainability of measures.

Abela recognises that it is not going to be smooth sailing for the coming year. The cost of living is rising, and government must cater for the subsidies that will be necessary in order to ensure Malta’s economy keeps turning, and people don’t end up suffering due to rising international energy prices.

Abela said that the government has been offering stability since the start of the Covid pandemic in March 2020. "We are transporting those same principles to face the current challenges, be them those in energy, in the security of food provision... a number of challenges we are seeing as a consequence of the Russia-Ukraine war."

The amount of funds that Malta has to set aside for those subsidies is substantial.

Finance Minister Clyde Caruana said during the launch of the pre-budget document that next year, the government’s energy and food subsidies will reach €608 million. That’s over half a billion euros. As such, one would imagine that this would take away from major initiatives or projects the government might have wanted to implement, however ensuring stability is the number one priority.

He said that this large sum for 2023 will amount to 3.6% of gross development product.

The fact that the budget date has been set now means that the finance ministry would be in full swing to conclude putting the budget together.

One hopes that the deficit is kept under control, and Caruana had also addressed this, and said that even though the expenditure will be more next year, they will still manage to reduce the deficit next year. This year, it stands at 5.8%. We must reduce it.

The country will need to tighten its belt a bit in terms of spending. It’s already been reported that several planned infrastructural projects which were to be entirely financed by national funds are expected to be frozen. This is the right thing to do for now, but one awaits to see which projects are going to face this temporary fate, and which aren’t.

This newsroom has written an editorial about the budget before, and how commitment must be given to ensure the subsidies in the budget, as well that a cut in university spending wasn’t the right way to go, but rather a full audit of the public sector in order to identify where there is over-employment and therefore where there can be cost-cutting would be better.

We all understand the exceptional circumstances that Malta is in. It would be good, however, if the government does not cut funding for environmental projects. And here we are not just referring to the creation of parks or planting of trees, but the incentives for solar energy, the push for more renewable energy and more environmentally friendly initiatives. We must not forget the climate crisis in the background, and if Malta can do its part to help alleviate problems future generations might face, then we should. The government should also not slow down on social support initiatives to help those in need. For in such trying times, they are the ones to suffer most. including incentives to ensure employment is also important.

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