Budget 2019 has several positive
initiatives which Government is currently promoting through its intensive
public relations strategy. The scope of this article is to highlight
shortcomings of the budget which are too important to ignore.
First. Do the erstwhile
positive social initiatives in the budget compensate for runaway increases in the
cost of living? I do not think so. The respective compensation to workers and
pensioners will likely be eaten up by tomorrow’s breakfast or one’s first
outing, when one considers the increase of prices in foodstuffs, fuel, rent,
utility bills and so many other goods and services.
Indeed, Malta is currently
experiencing a situation where elderly persons must make extra sacrifices to
cope with cost of living increases and where an increasing number of young
persons cannot find the means possible to obtain a house loan or to afford rent.
Surely not the best of times for such persons.
True, the cost of living
adjustment (COLA) is based on a mechanism which government duly follows and
which government has decided to top up with an extra Euro per month. If
anything, the top up is an admission that the mechanism is not realistic. Isn’t
it then about time that Government and social partners revise the measurement
of COLA through a mutually agreed method?
Second. Does the budget provide peace of mind for people’s quality of
life? Again, I have my doubts. The country’s environmental challenges do not
seem to be a priority for this government, with the area hardly given a mention
and with guardians of the environment such as farmers being told that their contribution
to the economy is minimal.
Third, are public expenditure and revenue figures beyond scrutiny? I beg
to differ. It is positive that Malta has a budgetary surplus but let us keep in
mind that capital investment was reduced from 12.1 per cent to 8.5 per cent of
expenditure between 2013 and 2017. Besides, official Eurostat figures show that
Expenditure in areas such as environmental protection, social protection,
public order and housing decreased between 2012 and 2016. The latter is particularly
painful when government had no problem dishing out tens of millions of Euros for
dodgy privatisation deals in health and energy.
This means that Government is investing less in needs which go beyond
the immediate present, and which we might have to pay for at a higher cost in
future years. And even where capital expenditure is hefty, for example the
absorption of EU funds for road projects, one questions whether they are being
used adequately in terms of quality, access, safety and encouragement of
alternative modes of transport. The question everyone is asking is: will such
investment reduce traffic gridlocks, or are we just widening roads to satisfy
our immediate appetite whilst not tackling the root causes of increased in
traffic? What will happen once we realize that our road widening projects have
not solved our traffic problems? Let us also keep in mind that accessible
pavements are a basic need of so many pedestrians ranging from elderly persons,
persons with disability, children and parents with pushchairs.
Public revenue also deserves scrutiny. A good chunk of it comes from the
sale of passports. It is highly questionable whether this is sustainable and
forward looking, especially when Malta is becoming highly dependent on this
practice at the expense of sustainable economic diversification. Besides, there
is a lack of transparency on how such funds are being used.
Indeed, it seems that Government’s main economic drivers are the sale of
passports and the importation of third country national workers to increase economic
growth. The question everyone is asking
is whether this is sustainable. Such increase in numbers are contributing to
the runaway increases in prices, to social inequalities and to a huge strain on
Malta’s infrastructure. In the meantime, Budget 2019 says next to nothing about
tomorrow’s social needs in areas such as sustainable pensions.
Can we rest our minds that Malta’s economic model will generate an equitable
and sustainable society in the years to come? I have my doubts.
This article appears in The Malta Independent, 29 October 2018.
