The country has long yearned for changes to the economic model.

More recently, the government seems to have been accepting this reality. Finance Minister Clyde Caruana's words in the Budget speech further solidify this.

It is time for the country to move from quantity to quality, Finance Minister Clyde Caruana said in his introduction to the budget. Finance Minister Clyde Caruana himself had mentioned the need for an economic model change, although this was downplayed by others in government for a time.

Nowadays, the Prime Minister's rhetoric on the subject, as well as Caruana's Budget speech, shows that the government is now in full agreement that a change is needed.

The future cannot be built on volume, especially in a small country like ours. It must be built on the quality of products and services offered, Caruana said. This line of thinking is the way forward. We need to move towards quality rather than more quantity... this in terms of tourism as well as economic sectors in general. The government has made moves to try and limit foreign workers in certain sectors already, although one must point out that they must remain on top of things to ensure the country doesn't end up with a shortage of taxis in the future for instance.

But while it is good that the government has realised that growing the economy on the number of people is problematic, one cannot help but note that it should have come to this realisation sooner.  It seems that we now have the direction, quality over quantity, but what we still need is the 'how to get there'. The government is working on the 2050 vision document, and one hopes that such a plan would be included in that.

As for the actual measures in the budget, the biggest one is the income tax cut, which is undoubtedly welcome by all. It means more money will be left in people's pockets, increasing their spending power. The change will cost government €140 million per year. It is not a small amount, and will hopefully go a long way in helping families.

At the same time, the government will keep the energy and fuel subsidies in place, however the budget contained no mention of the Stabbilta initiative, indicating that this is now coming to an end. Regarding the energy subsidy, the finance minister told journalists that when the measure was first introduced, the government spent 5% of government's recurrent expenditure on it. Now, he said it makes up 2.5%, which means it has halved. This gave the government the room to introduce the tax cut.

All this, of course, raises questions regarding the economic situation of the country. As we all know, the national debt has been rising. The Finance Minister said that the government's debt also remains 10 percentage points below what the maximum allowed in the Maastricht treaty is, in terms of government debt as a percentage of GDP. He also said that the deficit will also go down. This is important.

As for inflation, a major issue that the country has battled with the past few years, it is projected to drop. International inflation, and thus local inflation, will be dependant on there being no major international economic shocks, such as an escalation with the situation in the Middle East. But that in itself is a concern, as the situation in the Middle East has only worsened as of late.

It is worth noting that Malta was able to weather the recent storms, here we are referring to the pandemic and the instability caused by Russia's invasion of Ukraine, thanks to the so called 'war chest', a term the government used to refer to the funding it had to introduce initiatives which helped keep the wheels of the economy turning during those tough times. Given the ongoing invasion of Ukraine, and the volatility of the Middle East, one does hope that the Maltese government is keeping this in mind, so that if another rainy day does come soon, Malta would have enough in the so called war chest be able to weather it.