Beyond the no revenue measures increase

We usually measure the annual budget speech by calculating what’s in it for us.

If that is the case, this budget is a good one on all sides. No revenue measures have been increased, not even those items on which successive finance ministers rely year after year to generate revenue, like the price of cigarettes, whisky or alcohol in general.

This is all the more remarkable in that it has long been the practice for the first budget after an election to carry with it tax or revenue increases to make up for the usual pre-election profligacy. This is not the case this year.

Over and above all this, the budget speech that was read yesterday in Parliament also contains a number of measures targeted at particular situations aiming to redress past injustices or particular sectors of the population that need an exceptional leg-up due to particular circumstances. Readers can find details in the coverage of the budget speech in today’s issue.

Beyond the details of the targeted sectors, there are three main general directions or thrusts of the 2018 Budget.

The first thrust tackles, as explained above, the social spend. The minimum wage under certain circumstances is being increased. Pensioners get a €2 increase a week. Tax has been cut with regard to those earning less than €60,000. In-work parents get additional benefits per child. Parents adopting a child get additional help, the foster care allowance has been increased.

The second thrust targets both social and affordable housing. €50 million will be spent to provide 700 housing units. There are other measures which combine restructuring dilapidated buildings and getting help from the government, after which this building is rented out for a number of years to the Housing Authority. As regards affordable housing, what attracted the biggest attention is a scheme for second-time buyers who may be looking for an opportunity to move to a bigger house or alternatively for a smaller house.

The third thrust tackles the congestion on the roads. A holistic approach is required here and an agency will be set up with a €700 million budget to redo the country’s roads, as the election manifesto promised. Public transport will continue to be improved and a Tal-linja card will be offered free to all those aged 16 to 20.

The third thrust also concerns the environment in view of the huge issues in this regard. €150 million will be spent on a waste management plan and a refund will be offered in a scheme to get plastic and glass items to be returned.

Obviously, there are many more measures in the budget speech and each will no doubt be examined and assessed over the coming weeks in the budget debate in the House and in the country. One must mention here the forthcoming White Paper on rents. The aim is not, the minister explained, to reintroduce rent controls like we had in the past, but rather to introduce a regulatory framework in what may rapidly become an unregulated jungle.

Obviously, now that the minister has read the budget speech, all constituted bodies will deliver their judgment. Political parties and political leaders will also deliver their judgment. But ultimately, with so many rating agencies coming out in praise of the Maltese economy, supported by other indicators, we know that our economy is not just good because the budget is good, but that on the contrary, the budget is good because the economy is good.

This is thus a budget of continuity, a forward-looking and an upward-looking budget, a budget that builds on an economy that is doing well, that has moved from a deficit situation to a surplus situation.

No doubt, in future months, holes will be picked in the budget, or measures that carry a lot of promise will be found to have delivered less than they promised.

But seeing that previous budgets had the success they had, one is reasonably sure this one, too, will continue to contribute to further growth in the economy.