Source: George M. Mangion¸ PKF Malta
As published in the Malta today on the 28th November 2012
This week¸ we will know what is in store for us in the budget for 2013 .Much of the same or are we to expect something new¸ now that this is the last budget of the five year legislature -can it be a harbinger of a good tidings? Taxpayers hope to see a fresh attempt in the 2013 budget to pronounce a revamped Oil Exploration directorate to seriously exploit the riches hidden under the waters. Only thus will the island ever hope to repay it euro 6 million national debt which now reaches close to 80% of its GDP.
Yet ¸most party apologists are nonchalant … they were hopeful of a sunshine budget which in a condescending way¸ placated us by reminding us that while other EU member states are introducing austerities including cutbacks in public expenditure we can afford announcing salary increases to all in the public sector. This may be true but any profligacy in budget planning for next year is no consolation given our ever-increasing debt obligations. It is true that while the finance minister is gallantly piloting his last budget for this legislative term¸ he is also waiting for kudos from party councillors in the contest in which he is a contender for the election as deputy prime minister. This time round¸ the political mood has changed. It is more upbeat. The finance minister has avoided the temptation to indulge in the usual spinning and has broadly self congratulated himself for having in the past four years chosen the tough path in wanting to bite the bullet.
In practical terms¸ this implies this administration is prepared to take a pragmatic view about things. The administration volte face is evidence of a real effort to use whatever legitimate means it has at its disposal to win votes and at the same time reduce the annual deficit to below the three percent threshold. Of course this is no mean feat having just awarded close to euro 200 million in salary increases to civil servants alongside a generous bonus to the members of the police corp. Otherwise to make up for the existing over run on the first nine months of the year by about euro 100 there must be more control in collecting revenue in the last quarter. Typically we note that reforms are in motion so that departments systematically pool market intelligence and share strategic information about future programmes and current projects¸ with a view to better understanding the totality of the public sector’s likely demands on the economy. Government knows that revenue generation only comes from improved competitiveness . Doing more with less is not a term related just to the economic sector as the island has to compete globally to sustain a better society with a better environment. In simple terms to reduce our deficits it is only possible if we run a lean administration based on competitiveness¸ which is vibrant¸ productive and not complacent.
But how can we kick-start the economy to reach a higher level of competitiveness and achieve a higher growth of say three point seven percent as was the case in 2010? Many suggestions were offered to the finance ministry to be co