The Malta Independent
Like Dicken`s Christmas Carol, this week`s budget, the first under the Gonzi administration, is a brush with three spirits.
Unavoidably we meet spirits from the past. If we have a budget deficit that needs priority above all else it is because in the past the `money no problem` culture has landed us in a situation where further accumulation of debt will prejudice the strength of our financial structure and deny us the presumed benefit of early participation in the Euro monetary system.
It brings memories of the many times that we have been told in the past that problems were being addressed only to find out that they were merely being financed.` It makes me recall the various instances when medium term financial targets were laid out explaining how the deficit problem will be addressed over a medium term period of a few years only to find out that things only got worse. `In particular I recall the budget for 1999, the first after the short Labour government interval, where the then Minister of Finance laid out a medium term plan explaining that by 2004 government finance would be in good shape, a reassurance that was repeated with emphasis in the election campaign of April 2003.
The spirit of budget past makes my heart bleed remembering the money wasted in roads done and redone, in hospital that cost three times more than it should, in useless subsidies given to avoid the inconvenience of serious restructuring which in any case had to be undertaken when things ultimately got of hand, only at much higher cost and deeper pain.
In handing over the encounter to the spirit of budget present, it raises the obvious question as to why should we be in the situation we are in, a situation of high debts and no growth, experiencing the disillusionment of competitor EU countries beating us on growth and in the attraction of investment.` It makes me marvel how a government in office for consecutive 17 years bar 2, could speak about problems without subscribing to their paternity and without accepting the blame for the measures which can no longer be avoided.
The spirit of budget present brings with it a high dosage of rare consensus.` We have consensus on serious structural faults in our economy which need to be addressed. That we have lost our international competitiveness and restoring it means rolling back the standard of living that we have taken for granted. We have no agreement on the measures which need to be taken to make the roll-back burden equitably spread and ultimately the government has to do what it has been elected to do, without expecting the social partners to join in to share the burden of the measures chosen.
The spirit of budget present comes with a spectrum of measures which in their generality rolls back the standard of living of each and every household family. It comes in the form of higher utility bills, higher public transport fees, higher airport fiscal charge and additional working days without additional compensation.
All this is understandable. A sick patient needs sour medicine or painful surgery.` Confetti will just not work. What is less understandable is why in 1998 a legitimately elected government was forced to resign for taking timely measures meant to prevent the need to take the much more painful measures which now have to be taken, following the additional accumulation of several hundred million of debt.
And as these reflections hand us over the spirit of budget future I remain incredulous whether the measures taken are in any way appropriate and/or sufficient in order to achieve the objectives which are undisputedly clear and desirable. We need to address the fiscal deficit in a serious and consistent manner. We need to invest more in education to foster the ability of self-help rather than the continued reliance on government support; and we need to preserve and enhance our environment before we harm it irreparably.
What the spirit of budget future fails to convince me about is that this is not just another half baked attempt which will be irresponsibly abandoned as electoral pressures erode the fiscal sanity which is generally cultivated in the first half of every legislature.
Politicians` record in their staying power on medium term fiscal sanitisation programme is particularly disappointing.` There is no reason to presume that this time it will be different , except may be, and I underline may be, that this time the discipline to join the Euro could overcome the temptation to revert to old habits of` switching priorities again as elections approach
Like Dicken`s Christmas Carol, this week`s budget, the first under the Gonzi administration, is a brush with three spirits.
Unavoidably we meet spirits from the past. If we have a budget deficit that needs priority above all else it is because in the past the `money no problem` culture has landed us in a situation where further accumulation of debt will prejudice the strength of our financial structure and deny us the presumed benefit of early participation in the Euro monetary system.
It brings memories of the many times that we have been told in the past that problems were being addressed only to find out that they were merely being financed.` It makes me recall the various instances when medium term financial targets were laid out explaining how the deficit problem will be addressed over a medium term period of a few years only to find out that things only got worse. `In particular I recall the budget for 1999, the first after the short Labour government interval, where the then Minister of Finance laid out a medium term plan explaining that by 2004 government finance would be in good shape, a reassurance that was repeated with emphasis in the election campaign of April 2003.
The spirit of budget past makes my heart bleed remembering the money wasted in roads done and redone, in hospital that cost three times more than it should, in useless subsidies given to avoid the inconvenience of serious restructuring which in any case had to be undertaken when things ultimately got of hand, only at much higher cost and deeper pain.
In handing over the encounter to the spirit of budget present, it raises the obvious question as to why should we be in the situation we are in, a situation of high debts and no growth, experiencing the disillusionment of competitor EU countries beating us on growth and in the attraction of investment.` It makes me marvel how a government in office for consecutive 17 years bar 2, could speak about problems without subscribing to their paternity and without accepting the blame for the measures which can no longer be avoided.
The spirit of budget present brings with it a high dosage of rare consensus.` We have consensus on serious structural faults in our economy which need to be addressed. That we have lost our international competitiveness and restoring it means rolling back the standard of living that we have taken for granted. We have no agreement on the measures which need to be taken to make the roll-back burden equitably spread and ultimately the government has to do what it has been elected to do, without expecting the social partners to join in to share the burden of the measures chosen.
The spirit of budget present comes with a spectrum of measures which in their generality rolls back the standard of living of each and every household family. It comes in the form of higher utility bills, higher public transport fees, higher airport fiscal charge and additional working days without additional compensation.
All this is understandable. A sick patient needs sour medicine or painful surgery.` Confetti will just not work. What is less understandable is why in 1998 a legitimately elected government was forced to resign for taking timely measures meant to prevent the need to take the much more painful measures which now have to be taken, following the additional accumulation of several hundred million of debt.
And as these reflections hand us over the spirit of budget future I remain incredulous whether the measures taken are in any way appropriate and/or sufficient in order to achieve the objectives which are undisputedly clear and desirable. We need to address the fiscal deficit in a serious and consistent manner. We need to invest more in education to foster the ability of self-help rather than the continued reliance on government support; and we need to preserve and enhance our environment before we harm it irreparably.
What the spirit of budget future fails to convince me about is that this is not just another half baked attempt which will be irresponsibly abandoned as electoral pressures erode the fiscal sanity which is generally cultivated in the first half of every legislature.
Politicians` record in their staying power on medium term fiscal sanitisation programme is particularly disappointing.` There is no reason to presume that this time it will be different , except may be, and I underline may be, that this time the discipline to join the Euro could overcome the temptation to revert to old habits of` switching priorities again as elections approach
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