Tuesday, October 20, 2015
Budget in the long-term
The Labour Government’s mid-term budget is characterised by a good number of positive measures. At the same time, however, Budget 2016 is lacking especially when it comes to measures dealing with long-term challenges.
Perhaps the most positive feature of Edward Scicluna’s budget is that it promises to maintain Malta’s relative economic stability and positive indicators simply by not introducing destabilising economic ‘shocks’.
Fiscal policy and social policy encourage investment and employability, and maintain government’s philosophy to reduce welfare dependency by making work pay.
Other positive measures in the budget can give a push to certain sectors whilst improving the environment. These include incentives for cleaner modes of transport, plans to develop communal solar panels and the doing away of cumbersome burdens regarding the sale of properties. Hopefully, the latter will result in the regeneration of dilapidated eyesores.
From a social dimension, it is positive that the government has introduced or retained various targeted social measures to assist particular social groups and categories. It is important, however, that loopholes are not exploited to deny certain people from such rights. In this regard foreign workers, both European and not, immediately come to mind. Many might not be aware of their social rights or might feel helpless in dealing with administrative procedures.
Social realities such as precariousness and low wages, are as pronounced as ever. This also includes workers who are employed on a part-time basis though they would prefer to work full-time. An increase in the minimum wage would have helped assist such persons who after all are contributing to Maltese society and to Malta’s economic growth.
In my view, the biggest shortcoming of Budget 2016 is that it gives too little importance to various long-term challenges. In this regard I am very much in agreement with Ranier Fsadni (Times of Malta, 15 October), who highlights challenges in areas such as health, higher education and transport, the latter also including Air Malta.
Besides, Budget 2016 says nothing about sustainable water management, when Malta’s extraction of groundwater from boreholes is currently a free-for-all mess. Malta’s future pension policy was also disregarded.
I hope that this is because government’s erstwhile proposed pension reform iscurrently evaluating public feedback. One should keep in mind that to date, government’s proposals are lacking when it comes to the financing of future pensions.
Local councils will remain underfunded and increasingly dependent on centralised schemes, which does not augur well for their autonomy and for their long-term financial sustainability. This is happening at the same time when partisan Tagħna Lkoll appointments in the public sector are reaching ridiculous levels.
The erstwhile positive measures in environment and transport are accompanied with other negative ones. For example, government has confirmed its insistence to develop on ODZ land in Żonqor, thus effectively sabotaging the scrutiny process within Parliament’s environment committee.
Government’s plans regarding alternative modes of transport do not seem to be accompanied by plans for adequate infrastructure, and importance given to renewable energy remains relatively low.
Government’s relatively poor performance in terms of governance does not seem to be a priority. May I remind readers that a recent comparative study on sustainable governance published by the reputable Bertelsmann Stiftung among 41 EU and OECD countries placed Malta in the lower ranks.
An example of lack of transparent governance is evident in the cash-for-citizenship scheme, which in my view raises suspicion on whether such funds are being used in a sustainable way. And this when the scheme itself is already questionable on many accounts.
The undersea tunnel announcement also provided more questions than answers. For example, is government’s decision guided by any studies?
If yes, are they available for public scrutiny, or are they State secrets, as is the case with agreements and studies concerning other areas? What are the terms of reference? Is government taking note of opinions of geologists such as Peter Gatt regarding the potential ecological dangers of such a project?
Budgets focus on one particular year, but their cumulative implications in the long-term should not play second fiddle.