No surprises in the budget

There were no surprises in the government’s budget for 2023, though Clyde Caruana did end his speech by going on the offensive against “what is written on the internet” as he concluded with populist remarks that he loves his country in contrast to those who “seek division and offer criticism”.

Don’t worry Clyde. I too love my country and want to see it more united than it is now, and that’s why I would like to see Labour out of government. Your kind of populist rhetoric is what is divisive in the first place. The only ones who constantly bring up issues of division are your own party and your own boss who equate national unity with subservience to the Labour Party and the government.

The budget estimates can be downloaded here. Government recurrent expenditure is set to increase by €352 million from €5.8 billion to €6.2 billion or an increase of around 6%. Adding the government’s capital expenditure, the government will be spending a total of €7.3 billion, an increase of around €500 million from the previous €6.8 billion or a total increase of around 7%. Government revenue is estimated to increase by 7% from €5.9 billion to €6.3 billion which is a very generous estimate considering the economic environment, but Clyde Caruana has made it a point he will be increasing tax collection efforts of undeclared dues. Of course, the overall debt will keep expanding, and so will the aggregate amount of interest payments to the national debt.

Labour’s finance model hasn’t changed and it’s more of the same: wage increases, pension increases and more subsidies for young couples to buy their first property in a low-wage economy and a booming property market. Although the wage increases are relatively substantial, they are long overdue and are still short of what the overall cost of giving and property prices in Malta have come to. The economic model won’t change and its results are very evident: a reduction in home affordability and social mobility and an ever-increasing number of people in poverty. The trend won’t change because nothing has changed fundamentally.