The budget announced yesterday for 2024 was practically, uneventful with two distinct stories emerging from the financial estimates. There is the story of austerity where Clyde Caruana is struggling to cap the government expenditure at these levels due to serious concerns over excessive government spending, and then there is the story of Robert Abela who is losing support from every quarter of society and is desperately trying to pay off everyone possible to stay in power as he wrecks the economy and public finances.
The government’s recurrent expenditure is planned to increase by another 7% for next year with an additional ย450 million in expenditure, with much of this increase going to salaries and social benefits. The government’s capital expenditure is to decrease by ย100 million. One of the most significant reductions in a line item’s expenditure was made to the Justice Ministry reducing the recurrent expenditure to the Ministry by around ย6 million. The Ministry of Tourism which has been accused of rampant corruption and excessive spending has had its budget reduced by around ย10 million – actually, the reduction was mostly made to the Malta Tourism Authority which had around ย9.5 million cut from its budget. Clyde Caruana intends to collect more taxes to increase government revenue by 4.3%. Not quite an austerity budget despite the screaming attempt at austerity with the capping of most of the line votes, and the reduction of others, but this is thanks to Robert Abela’s insistence on giving people more handouts.
Basically, Robert Abela is overriding the public’s fundamental need to balance public finances for long-term sustainability whilst seeking first and foremost his own political interests. We are being forced to fork out more tax payments so that the government can issue more social benefits instead of fixing the economy and bringing high-quality jobs. The economy will remain based on the precarious and cheap labour market – quantity of labour over efficient and high productivity rates. This is basically Greece 2.0 in the making.
Clyde Caruana started his budget speech with a reference to high oil prices saying high oil prices are forcing the government to issue subsidies to keep electricity bills at current levels. Most of these subsidies are being used to pay for excessive premiums on the government’s gas purchases and later today I may be publishing an estimate of the total premium paid by the government – this means that subsidies are being used to pay for incompetence and not for genuine high gas prices (gas purchases by the government are linked to oil prices).
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