We are moving into election territory. The signals are unmistakable. Both parties will start competing on promises. That competition has already begun. 

The Partit Nazzjonalista has set out four measures. No income tax on overtime up to €10,000. No tax on pension and other income up to €37,000. VAT on restaurants reduced to 7%. No tax on COLA increases. Each measure is easy to understand. Each increases disposable income. Each is politically attractive. I do not dispute that. What I dispute is what they add up to.

Taken together, they permanently reduce the State's revenue base. Not temporarily. Not conditionally. Permanently. Once these commitments enter the system, they do not leave. That is the problem.

I want to be fair. The PN has consistently attacked the government for allowing public debt to exceed €12 billion and for running persistent deficits. That criticism is legitimate. But these four measures move in exactly the same direction they are criticising. You cannot argue that the government is fiscally reckless and then propose structural revenue reductions with no identified offset. That is not a critique of fiscal policy. It is a continuation of it.

Here is the distinction I want to draw - and I think it matters enormously. Not all public spending carries the same risk. Productive investment - infrastructure, skills, technology, research - generates returns. It can be phased. It can be paused. It is self-liquidating over time. Structured recurrent commitments - permanent tax exemptions, permanent rate reductions - do not work that way. They lock in lower revenue year after year. They cannot be reversed without political pain that borders on the impossible.

France demonstrated this with brutal clarity in 2024. Pension entitlements locked in over decades could not be touched without governments falling. The commitment had become a political right. The fiscal space had narrowed to the point where ordinary adjustment was impossible. Malta is not France. But the mechanism is the same. Structured commitments become entitlements. Entitlements become immovable. And when the economy turns, they are still there.

Malta's economy will turn at some point. Not because I am pessimistic. Because economic cycles are not optional. Malta is a small, open economy. It does not control external demand. It absorbs it. A slowdown in European growth, a geopolitical shock, a sectoral downturn - any of these can shift Malta's trajectory quickly. That is not speculation. That is the structural reality of a small island economy.

When that happens, debt-to-GDP ratios -  currently presented as evidence of stability - will deteriorate fast. I challenge this measure directly. A ratio is not a buffer. It moves with the denominator. Contract GDP and the ratio worsen even if not a single additional euro of debt is added. What matters is not the ratio in good times. What matters is the State's ability to respond when times change. That ability depends on how much of the fiscal position is fixed and how much can be adjusted.

The VAT proposal makes this concrete. Reducing restaurant VAT from 18% to 7% costs the government - by the Minister of Finance's own estimate - over €100 million annually. The argument for it is that a lower VAT will reduce prices, stimulate demand, and generate offsetting revenue. I am sceptical of every step of that chain.

I eat in restaurants. I almost never receive a VAT receipt unless I ask for one. The compliance gap in this sector is real and well-known. Reducing the rate does not close that gap. It changes the arithmetic of evasion, but it does not change the behaviour. And prices in Malta do not work the way the theory suggests. Food prices rose with inflation. They did not fall when global commodity prices eased. There is no automatic mechanism that transfers a tax reduction to the consumer. The reduction creates the space. Whether businesses use it is their decision, not the government's.

My argument is not against tax relief or social support. Some of the PN measures have genuine merit in isolation. Removing tax on COLA increases protects the lowest earners from losing ground to inflation.I have no objection to that principle. My argument is about cumulative impact and fiscal honesty.

Both parties, before publishing a manifesto pledge, should be required to publish a costed cumulative fiscal impact - not each measure alone, but the full picture after all pledges are counted. What does the revenue base look like? What does the expenditure commitment look like? What is the structural balance under a baseline growth scenario, and what does it look like if growth slows by two percentage points?

That is not an unreasonable ask It is the minimum standard of seriousness that voters deserve.

The arithmetic does not adjust to electoral cycles It waits.And when conditions change, it asserts itself -  with less room to manoeuvre than anyone anticipated.

David Spiteri Gingell is a Governance, Institutional, and Digital Transformation Consultant