Over €1.6 billion was spent on pandemic response actions and measures since 2020, Finance Minister Clyde Caruana revealed in Parliament earlier this week.

Over €1.5bn came from national funds. This is no small amount. These funds were needed to keep Malta afloat economically and, in that sense, succeeded. Where would we be had it not been for the wage supplement for instance? The support given to businesses was also essential. One could question whether the voucher scheme was truly needed, but then again perhaps it did help people to start frequenting businesses during that particular phase of the pandemic.

Looking at things today, the wheels of the Maltese economy were able to start turning when the effects of the pandemic began to ease. But the current crisis means that different forms of support are needed. Energy prices are increasing outside of Malta, inflation is rising, these are all factors that affect us. The government is spending hundreds of millions on subsidising certain increases, like energy and fuels. It must continue doing this. The Maltese wages are not high enough to cope with such increases on their own.

But herein lies the problem. Government is spending a lot of money, and while it has to do that at this point in time, it must also keep an eye on government debt. According to a National Statistics Office statement in September, at the end of August 2022, Central Government debt stood at €8,559.0 million, an increase of €874.5 million from 2021.

Increasing the country’s debt will have more repercussions down the line and one worries as to how long the government could continue not raising taxes.

The government needs to be very careful with its spending. Some projects will need to be placed on the backburner for a while, which is understandable. But it also needs to correct a number of bad practices.

For one, the government needs to reduce public sector employment numbers. Here, we are not referring to teachers, nurses or carers. But the jobs for the boys mentality needs to change. We cannot have another Air Malta situation.

Employers have also aired their concerns about the government taking employees from the private sector. Chamber of SMEs CEO Abigail Agius Mamo told The Malta Independent on Sunday that the government taking employees away from the private sector is a ‘significant problem’. The Chamber is seeking a commitment to enter into a framework that will be agreed upon with the social partners, as to how government recruitment takes place. "Our aim is not to limit government from recruiting necessary resources. If resources are a bit scarce, they are scarce for everyone. But looking at things from a sustainability of government finances point of view, we believe there needs to be a bit of a rethink,” she said, adding that there need to be safeguards in place.

Such a framework is an interesting idea, and should be discussed.

We must also ensure stricter accountability for government spending, with increased checks and balances and far more transparency. We have seen instances where public sector entities are hesitant to say how much was spent on a particular event for instance, and this is absolutely unacceptable.

Government contracts must be under increased scrutiny, as should government spending. We need to ensure that the country has enough funds to weather storms while limiting increasing debt.