The budget communicated by Minister of Finance Clyde Caruana on Monday discounts the future. It is a budget which once more shifts present day burdens onto future generations. The budget deficit for 2025 is estimated to amount €904 million. It will be added up to an already substantial and ever-increasing debt mountain.

Future generations have no voice. They will have to shoulder this: they have no choice. They cannot protest. Nor can they "threaten" government with their vote.

Gro Harlem Brundtland, former social democrat Prime Minister of Norway and Chair of the United Nations World Commission on Environment and Development had, way back in 1987, made the point very clearly in the report entitled Our Common Future which we refer to mostly by her name. The Brundtland Report, in fact, emphasizes that: "We act as we do because we can get away with it: future generations do not vote; they have no political or financial power; they cannot challenge our decisions." 

The budget announced on Monday had some good news on the reduction of the deficit. During the current financial year, possibly, the deficit will be reduced from 4.4 per cent to around 4 per cent of the projected expenditure. Furthermore, we have been informed that the deficit reduction in the forthcoming years may proceed such that within two years Malta will be well within EU rules, as a result avoiding completely the excessive deficit procedure.  There will still be a deficit but it is projected to be below the 3 per cent mark. This is reasonable, but is it enough?

Everyone would prefer not to have to pay any taxes, or having a substantially reduced tax bill. As a result, the proposed revision of the income tax rates is undoubtedly widely accepted. Minister Clyde Caruana stated in the budget speech that these revised rates signify that, as a result, €140 million less income tax would be collected from taxpayers during 2025.

The context of all this is very important to understand: a reduction of income tax to the tune of €140 million is being proposed, as part of a budget which projects a deficit of €904 million. This deficit will be added to the accumulated national debt, which, at the end of 2024 is projected at €11.06 billion. This will increase to a projected €11.97 billion at the end of 2025 (source: budget speech pages 46-48).

The proposed reduction of income tax payable will thus add €140 million to the accumulated deficit, which deficit will be inherited by future generations. This debt will have to be paid, at some time in the future, by future generations: that is by our children and grandchildren. They will also pay interest on the amount due. They cannot complain, now, as they have no voice. They will definitely curse us later! The interest due on the accumulated national debt during 2025 is estimated at €312 million in the budget documentation made available.

Deficit financing should be used sparingly, and limited to times of emergency. Subsequently, unless we expect to be living in a permanent emergency, we should start the path towards a balanced budget. This would mean, that, as a nation, normally, we should spend no more than we are capable of earning in any given year. Otherwise, we will keep shifting today's burdens onto future generations. This is neither sustainable nor ethical even if within what is permissible by European Union rules. It limits and severely curtails the options of future generations to determine their own priorities.

Some weeks ago, we were informed that Maltese EU Commissioner-designate Glenn Micallef was assigned the responsibility for intergenerational fairness by EU Commission President Ursula von der Leyen. If Glenn has done his homework properly, he would be the first one to underline the unsustainable and unethical nature of this state of affairs.

Malta also has a Guardian for Future Generations, who apparently is fast asleep. In the present circumstances, the Maltese Guardian for Future Generations should be at the forefront speaking on behalf of those who have no voice.

In discounting the future, the budget document clearly misses the basics of intergenerational solidarity.

The Maltese Government does not miss a single opportunity in international fora to speak of its commitment to the basic principles of sustainability and sustainable development. Unfortunately, when push comes to shove, it is not capable of walking the talk.

An architect and civil engineer, the author is a former Chairperson of ADPD-The Green Party in Malta.  [email protected] ,   http://carmelcacopardo.wordpress.com