The Ostrich Budget
In a budget one expects the government to lay out its vision and goals, to state the strategy it is going to adopt to maximise on the country’s opportunities and address present and future challenges. Then, having explained the big picture, the finance minister jumps into the brass tactics. That is what normally happens.
When delivering this year’s budget speech, Minister Edward Scicluna totally dispensed with the visionary and planning part. Right from the word go, he thought it wiser to get into the pre-Christmas spirit and start dishing out goodies. Let us for a second put aside the discussion as to whether those goodies are actually as good as Minister Scicluna made them out to be. Let us focus on what I consider to be this budget’s biggest flaw. Quite simply, it is a budget that focuses on getting the country through the next twelve months. There is no attempt to address the serious shortcomings caused by the economic policy adopted by this government. There is no attempt to identify the challenges which segments of our society are facing, be it the adequacy – or rather inadequacy – of current pensions; be it a property market which has become inaccessible to large segments of our population; be it the failure to address the cause of our having the highest percentage of early school leavers in the EU; be it the total failure of our environmental policy from waste to air pollution; be it the inadequacy of our infrastructure and transport system in the light of the ever-increasing number of cars on the road and ever-increasing population.
Our economy is growing not only as a result of economic sectors fostered by previous Nationalist administrations, but also because our population is growing. According to Wikipedia, our population in 2017 grew by a staggering 33 per cent. While the actual percentage is debatable, it is an undeniable fact that our population is growing – and fast. No other country in Europe comes anywhere close to that level of growth. In the short-term, the growth in population is accelerating economic growth. Our economic situation is not dissimilar to an athlete injecting steroids. This strategy of pushing population growth, however, comes with its problems. These problems are not going to hit us in the future. They are hitting us hard now. I expected Minister Scicluna, in his speech, to acknowledge these problems and their root, and to then give us his vision of how he is going to address them.
Let me be more specific on these problems. A growing percentage of the Maltese are being priced out of the property market. With every month that passes, with more inward immigration, more and more people are going to find themselves without a decent roof over their heads. We used to pride ourselves on having one of the highest home ownership ratios. We are now seeing the return of homelessness on our streets; people sleeping in garages, peoples sleeping in cowsheds, people renting rooms on rooftops. After this year’s budget there will be more and less people facing housing problems.
Twenty-three thousand pensioners are living in poverty or are at risk of poverty. The government has opted to whitewash this problem by dishing out a measly weakly allowance of €2.17 (over and above the now regular annual budgetary measures), which is going to be eaten away by the increase in price of essential goods. Why is the price of essential items going up? Simple supply and demand. Population growth is fuelling demand, which is pushing up prices. By the time pensioners and families start receiving the weakly allowance meted out by Minister Scicluna, inflation will have gone up again. It is no coincidence that the Catholic Church and the Church of Scotland in Malta have felt the need to open kitchens and serve free food. Both say they are overwhelmed by the demand.
Population growth is also putting a huge strain on the country’s infrastructure. Our roads cannot cope with the increase in the number of cars. The same goes for our public transport system. We need more hospital beds. We are going to need more schools. And we are going to need staff to service these schools and hospitals. The budget surplus the government is so proud of is not enough to solve even one of these problems.
The minister’s budget speech totally ignored these issues, with Minister Scicluna opting instead to paint the rosiest of pictures. But, then again, this is the minister who failed to notice that the European Union is about to take legal action against his ministry and our country. This is the finance minister who expressed surprise last week when the OECD blacklisted our country. In the most important annual speech, Minister Scicluna ignored these problems too. For the sake of the thousands of jobs that are at stake, I hope that the ostrich will sooner, rather than later, lift its head from the sand.