Prepositions and verbs

The ongoing budget debate is at least serving to keep the issues of our society's future viability up front on the stage of public attention. For too long, the meaning of these issues was fudged and obscured in the popular mind, mostly due to government propaganda which falsely claimed that things were under control. To be sure, claims that make the same point are still being pushed now, but increasingly they have lost credibility as they get contradicted by measures being attempted by the government, and through facts on the ground which are known to, and experienced by, ordinary people.

In a nutshell, the problems we face arise from our economy having lost jobs, investments and its external competitiveness. They arise from an ineffective and overweight government that is permanently in financial deficit, that has raised taxes and the public debt to inordinately high levels, and that fails to deliver value for the tax money it spends.

Prime Minister Gonzi put a brave face on his 2005 budget, which was projected as a sober exercise. The reality is that the budget follows in precisely the tradition of its predecessors. Put more bluntly, the 2005 budget - despite the usual PR manipulations - amounts to more of the same.

At present, there should be two main priorities in economic policy - get the economy moving again, following the past years of stagnation; and control or much better cut government expenditures which have led to the bloating of taxes. One can do this by launching a co-ordinated series of actions - call it a plan: actions that are coherent in and between themselves, and that are doable. Manifestly, the budget for 2005 fails to do so. It is like being presented with an essay that is incomprehensible because, in the text, all the prepositions and verbs have been omitted.

Here are some contradictions that mirror those of past budgets and which are explicitly laid out in Dr Gonzi's budget. The government accepts the need to stimulate the economy and to generate new investments. Yet, for coming years, it is accepting projections for economic growth rates that are among the lowest in Europe.

The need to lighten the burden of public administration on the country is generally recognised. Presumably the Prime Minister subscribes to such a notion. Yet, while economic growth is being forecast to reach from two per cent to four per cent next year in nominal terms, the burden of direct and indirect taxation, according to the government's own calculations, is set to rise between eight per cent and 10 per cent. This is surely not sustainable.

Once again, we have been fed arguments that repeat how the public deficit is being contained. Year after year, the Fenech Adami/Gonzi administrations had made this claim - but see where we are today. For the key test regarding such claims is whether and how the government's recurrent revenues match with recurrent expenditures. The reality is that we have reached the state where recurrent expenditures exceed recurrent revenues. Worse: next year, the "recurrent" gap is bound to widen further, not decrease (and this according to the government's own data).

PR hoop-la is not going to alter such a reality. Effective action cannot result from further fudge. Moreover, such action can only be undertaken if the administration is credible, from the top down. "Brave" talk about sacrifices will convince no one, if it is widely perceived that some people do not share the burdens of the rest, even as they retain a privileged grip on government spending. Unfortunately this is not just a perception, it is actually happening. The Gonzi administration has hardly changed anything in this respect from what used to happen under Dr Fenech Adami.

Which is why perhaps we have once again, with the budget for 2005, embarked on a financial project whose description reads like an essay where all the prepositions and verbs are missing.