Winners and Losers

The Malta Independent on Sunday

Winners and Losers

The year which will be assigned to history in the next few hours has produced `winners and losers.

The winners are:

Vodafone and Maltacom- for constraining the government to give them a mobile licence on current and prospective technologies free of payment when operators in other countries had to pay through their nose for acquiring such license through transparent competitive bidding.

Richard Cachia Caruana ` for landing the most prominent post in the negotiating team for EU accession which puts him as a front-runner for being nominated as Malta`s first EU Commissioner thus securing his fiefdom in the post EFA era.`

Super One Radio & TV ` for becoming the indisputable leading `media station with the widest audiences as confirmed by the Malta Broadcasting Authority surveys of March and November 2000 ( interest declared).

NET TV ` for landing more advertising revenue from Malta EU Information Centre than Super One even though audiences of NET are much smaller than the audiences of Super One and don`t need much convincing about the benefits of EU membership.

Dr. Lawrence Gonzi ` who has consolidated his position as heir apparent to EFA in spite of John Dalli`s strong challenge `which fizzled out after the 2001 budget first glare was replaced by the reality of its negative impact on the middle class sector of society.

Dr. Alfred Sant ` who has shrugged off without scratch the hideous challenge for his party leadership orchestrated by political opponents and former friends who could not distinguish charlatans from real achievers.

The losers are:

The Maltese people ` who are having to pay taxes through their nose whilst seeing their government missing `opportunities to auction 3G mobile licenses which `are given away for free.to private operators without raising as much as a whimper from the opposition.

Enemalta- who had to carry the full burden of higher oil prices in 2000 thanks to the wisdom of Min Bonnici who refused to hedge the price of oil for year 2000 when he was counselled to do so in the first quarter of 1999 just when the price of oil was hitting rock bottom.

Environment lovers ` who could just watch the problem of power station emissions, waste management and air pollution from congested traffic compound themselves during the year.

Central Bank of Malta and Malta Stock Exchange ` who as Regulators of Malta`s financial structures have shown themselves unworthy of `their national status and incapable of protecting national interest from the `arrogance of the executive.` The Central Bank was incapable of producing a single liner putting the nation`s mind at rest` following repeated and specific accusations` of political pressure in lending `decisions of major government influenced credit institutions.` The Malta Stock Exchange has again behaved like the Minister toy poodle permitting confusion and lack of transparency in the capital markets. Criticism in this sense continues to be ignored rather than rebutted.

We can all be winners in 2001 if we act with single minded purposeness towards clearly defined objectives. The objective is not however membership or special relationship with the EU. That issue can wait definitive settlement at the next general election. The objective is real sustainable economic growth which requires serious re-structuring, substantial re-training and attraction of new direct investment. This needs a national effort which should be achievable if the secondary EU issue is put aside and `subordinated to much more urgent priorities.

If this country can act together and focus its energies `on the issues which unite us through consensus rather than prioritise things which divide us needlessly we can all be winners in 2001. Yet it looks like the stage is set for wasting another year in the history of this young country `chipping `away its credentials for a sovereign statehood.` It is time to shift from sovereign `symbols such as having five national holidays to sovereign of economic sustainability. .

Alfred Mifsud

Inkunu pozittivi

Il-Kullhadd Inkunu Pozittivi

Hekk kif ghadda t-tielet Milied taht din il-legislatura nazzjonalista qed nersqu lejn nofs it-terminu. Dan ifisser li l-partit laburista irid jibda jiffoka fuq l-elezzjoni li qed toqrob u jkun lest biex jammistraha l-poter galadarba jiksbu.

Ifisser ukoll li l-Partit irid jaddatta ruhu biex mhux biss jipprezenta ruhu bhala oppozizzjoni effittiva izda aktar importanti minn hekk bhala gvern alternattiv.

Ghalhekk rizoluzzjoni kbira li rridu naddottaw ghas-snin li fadal sa ma nergghu naslu ghall-elezzjoni hija dik li rridu nkunu pozittivi f\kull ma naghmlu. Irridu nikkonvincu lill-poplu li ahna mhux tajbin biss biex nikkritikaw, ingergru u nniggzu izda tajbin aktar biex inwettqu, biex immexxu, biex nibnu u biex noholqu l-gid.

Huwa car li matul is-sena d-diehla l-issue li l-aktar importanti li rridu nahdmu fuqha hija dik ta` l-Unjoni Ewropeja. Evidentissimu li l-gvern ser ikompli ghaddej bl-akbar ritmu possibbli biex itemm in-negozjati, jekk tista` ssejhilhom hekk, ma l-UE , jaccetta kull ma jordnawlu u jibdel il-ligijiet bla diskussjoni serja dwarhom.

Il-poplu Malti se jigi mixrub minn mewga ta` propaganda li ma thallihx jifhem sew x`ikun qed jigi deciz u l-effetti, tajbin jew hziena, li decizjoni dwar shubija fl-UE thalli fuq pajjizna b`mod strutturali li torbot mhux biex lil gvern prezenti izda il-gvernijiet ohra li jigu wara.

Ghallhekk il-Partit Laburista irid ikun aktar , hafna aktar , effettiv biex mhux biss infehmu ghala shubija fl-UE mhix addattata ghal pajjizna, izda ghala l-alternattiva laburista ta` Svizzera fil-Mediterran` hija aktar tajba u addattata ghar-rejaltijiet ta` pajjizna.

Mhux biss irridu npingu sinjal `no entry` indawwar bl-istilel ta` l-UE izda irridu npingu sinjal Y biex nuru li fil-mixja lejn l-UE il-poplu malti tabilhaqq ghandu ghazla.

U l-ghazla li hija l-aktar addata ghalina hija dik li l-aktar tatina flessibilta` biex bhala pajjiz bla rizorsi nagixxu maljar biex niehdu opportunijiet li l-bidliet li gejjien kontinwament jipprezentawlna. L-ghazla trid tipprermittilna li nkuna differenti minn haddiehor ghax jekk inkunu l-istess bhal haddiehor l-izvantaggi ta` gzira zghira maqtugha mil-kontinent jghelbuna u ma jrendunix kompettivi.

Irridu naghmlu l-ghazla li tifhem li l-pozizzjoni taghna hi dik li, gzira zghira f`nofs il-mediterran, u ma tistax tilghab bl-istess regoli bhal minn huwa fic-centru tal-kontinent ewropew. U fl-ahhar izda mhux l-inqas irridu nuzaw il-pozizzjoni strategika taghna biex niksbu l-ahjar ghal pajjizna permezz ta` leverage prudenti ta` dan il-vantagg waqt negozjati dwar relazzjonijiet ma pajjizi ohra, fuqna u tahtna.

Dawn l-erbgha aspetti ta` flessibilita`, differenti, pozizzjoni u leverage ghandhom ikunu l-aqwa argumenti taghna biex infehmu li l-alternattiva laburista hija ahjar ghal pajjizna.

Irridu nkunu pozittivi dwar l-UE.` It-tkabbir ta` l-UE huwa zvilupp ta` min jinkoraggixxih u niehdu pjacir li dan miexi. Ahna m`ahniex kontra l-UE. Irridu l-ahjar relazzjonijiet ma` l-UE. Nixtiequ lill-UE l-aqwa gid u progress.

Izda dam ma jfissirx li ghanda nkunu membri f`din l-ghaqda.` Ir-rejlatijiet ta` pajjizna jitolbu mod iehor. Bhal ma jitolbu r-rejaltaijiet ta` l-Isvizzera tan-Norvegja u ta` l-Islanda.

Pozittiv u nformattiv huwa l-motto li nzomm f;mohhi ghas-sena d-diehla.

Biting Dust

The Malta Independent

Biting Dust

Another year is about to bite the dust.` For those of us lucky enough to have survived it , it is time to reflect on what sort of year this has been for our country.

Frankly I feel that this has been largely wasted time with priorities inverted in an illogical way.` (Un)Fortunately ours is a small economy where Government`s actions or inactions make a marked influence on the success or otherwise in economic terms of the year under review.

Yet government`s actions throughout the year have demonstrated that it is not concerned with resolution of the country`s real problem. Instead it keeps insisting on making EU membership an objective on its own merit,` rather than a means for achieving the real ultimate objective. The ultimate goal of providing` this` nation with a sustainable economic growth` founded on a` production capacity for goods and services marketable in a ferociously competitive world.

So whilst we keep trumpeting that we are first or second in` the queue of applicant countries our real problems remain obstinately unresolved. We keep biting pollution dust even whilst walking straight.` Public transport remains unsuitable for a third world country even though its resolution could make a quantum leap difference of quality to our daily lives. Waste management is indeed a misnomer. It should be referred to as Wasteful Mismanagement.

Resources continue to be simply burned up in the air.` The efficiency on the revenue side of the government`s fiscal accounts is unmatched with any similar improvement in controlling the expenditure side.` This inevitably leads to waste of scarce financial resources which are sent down the budgetary black hole.

Our under-utilised and overpaid resources in the public sector remain untrained for a real job in the real world and no motivation is given to move resources in this direction. On the contrary the public sector continues to take on new employees without seeking to make optimum use of those already at its disposal.` Opportunities for maximising national resources are simply allowed to pass us by.

Just take what other countries, much richer and more resourceful, are doing with their mobile 3G licences. They auctioned their airwaves and brought in billions.` In Malta we gave them away for free to redeem a monopoly given to a private operator who could and should have been handled differently in the national interest.

Rather than seek national consensus on resolution of these national problems, a consensus which should be quite easily negotiated, we keep pushing blindfolded forward into the EU divisive issue making it the final` destination rather than a vehicle to such destination.

The EU issue could and should be handled after the next general election when the electorate decision will be final and conclusive. This is very much in line with what the EU itself prefers as the risk of losing a referendum on EU membership on this side of the election could put off the EU issue for an inordinate length of time. It would` narrow our negotiating tools for achieving the eventual route chosen by the electorate.

My great wish` for 2001 is for this country to get its priorities right and not let such priorities be dictated by personal agendas of influential individuals. This takes leadership qualities which are noticeable by their absence.

Milied flimkien

Il-Kullhadd Milied Flimkien

Illum u ghada, lejlet u nhar il-Milied, se nqattghu flimkiem ma shabi l-ohra tas-Super One fejn ser nifthu il-bibien taghna berah ghalikom biex tigu tarawna u tghinuna ntellghu trasmissjonijiet specjali ghal dawn il-jiem mqaddsa.

Saret ormaj tradizzjoni li f`dawn il-jiem is-Super One jigbor lil dawk li jridulu l-gid fi hdanu biex bhal familja wahda nifirhu flimkien u naghmlu kuragg lil xulxin biex inkomplu sejrin `l quddiem bix-xoghol taghna.

Ghalkemm is-Super One huwa kumpanija kummercjali separata u distinti mil-Partit Laburista u titmexxa wkoll b`mod sostanzjalment awtonomu hlief ghal-linja editorjali tal-kamra ta` l-ahbarijet, fl-ahhar mill-ahhar hija bicca importanti mill-istrategija tal-Partit Laburista biex iwassal il-messagg tieghu` lil poplu Malti u Ghawdxi.

Jidhirli li dan qed naghmluh b`mod effettiv. Ir-rizultati tas-surveys ta` l-Awtorita` tax-Xandir urew ghal darba darbtejn li Super One huwa l-aktar stazzjon segwit f`Malta. Mhux biss dak tar-radju li dejjem kien hekk, izda issa wkoll dak tat-televizjoni li tela fil-quccata qabel TVM li tradizzjonalmenyt dejjem kien fl-ewwel post.

Super One TV rebah l-aqwa udjenzi f`kull faxxa ta` hin fil-ghodu, wara nofs in nhar kif ukoll fil-ghaxija.` Ghal- sitt granet mis-sebgha tal-gimgha l-akbar udejnza fil-hin ta` fil-ghaxija isegwu l-aktar Super One.

Dan ifisser li qed nilhqu l-ghanijiet principali taghna.` L-ewwel li nwasslu l-messagg tal-Partit b`mod effettiv lill-firxa wiesgha tal-poplu Malti. U t-tieni li nzommu l-familja laburista` flimkien maghna tiddeverti b`mod onest u bla ma thallas xejn ta` dan id-divertiment. Ghax ma ninsewx li filwaqt li lill-TVM thallsuh il-licenzja ta` Lm15 il-lira kull sena lis-Super One ma thallsuh l-ebda licenzja avolja dejjem johrog car li l-aktar li qed taraw huwa s-Super One Television.

Ma ahniex nilhqu, s`issa, it-tielet ghan li nkunu kummercjalment vijabbli biex inkunu nistghu insostnu finanzjarjament lill-Partit Laburista. Biex tmexxi stazzjonijiet bhas-Super One, specjalment l-iskeda tat-Television, trid flejjes kbar li jlahhqu medja ta` eluf ta` liri kuljum.` Jigifieri li biex inkopru biss l-ispejjez irridu nilhqu introjtu ferm qawwi mir-reklami. Ghalhekk meta taraw ir-reklami fuq is-Super One ifhmu li dawn ghalina huma importanti daqs id-demm li jigri fil-gisem tal-bniedem ghax minghajrhom ma nistghux mmexxu.

Bil-ghajnuna ta` kullhadd issa qed nilhqu il-figura ta bejgh fuq livell sostenibbli u gha-sena d-diehla ser nistinkaw biex inkabbru l-introjtu billi nkomplu ntejbu l-programmi u nigbdu udejnzi godda.` Izda dan mhux bizzejjed biex inkunu nistghu naghmlu l-investiment kbar li hemm bzonn f`taghmir gdid kemm ghar-radju kif ukoll ghat-television.

Ir-radju issa ilu jahdem 10 sena u l-equipment li ghandna ghamel zmienu u teknologikament mhux aggornat bizzejjed. Anke t-television ilu fuq hames snin u hafna mil-cameras u editing suites u beta machines skadew il-hajja ekonomika taghhom. Jehtieg nibdluhom b`apparat modern u digitali halli nkunu nistghu nwasslu stampa cara kif jippretendi min illum dara jara stazzjonijiet bis-satellita.

Dan l-investiment la nistghu naghmluh mill-introjtu tar-reklami u lanqas billi nkunu ta` piz finanzjarju fuq il-Partit. Anzi irridu nkunu ta` sollijev finanzjarju ghall-Partit.

Ghalhekk f`dawn il-jumejn ta` lejlet u nhar il-Milied ahna flok se nqattghuhom bil-kwiet f`darna ser niddekiawhom ghall-istazzjon favorit taghkom biex nilqghukom , nurukhom x`qed naghmlu u nilqghu id-donazzjoni generuza taghkom.` Kulhadd jaghti skond ma jista` u jekk jista`. Napprezzaw li l-hajja mhux facli u dan il-gvern li weghdna il-genna fl-art qed jaghtina infern kuljum ghal-fatra ghal-pranzu u anke ghac-cena. Dan l-infern nistghu nehilsu minnu biss billi nregghu lura fil-gvern lil-Partit Laburista u biex dan isir il-mezzi Super One iridu jkunu l-aqwa u l-ahjar.` Ghalhekk nehtiegu l-ghajnuna tal-kontribuzzjonijet taghkom biex ninvestu f`taghmir gdid biex inwasslulkom l-aqwa programmi fuq l-istazzjonijiet favoriti taghkom.

Nirringrazzjakom minn quddiem tal-generozita` taghkom u nixtieqilkom minn issa il-Milied mimli paci u s-sliem. Minn naha taghna nweghdukom li minn Jannar ser jibdew skedi godda fuq ir-radju u t-television li se jzommukom iggammjati ssegwu biss is-Super One.

Alfred Mifsud

Breaking the French Spell

The Malta Independent

Breaking the French Spell

May this Christmas break the French spell which has literally dominated the world these last 6 months. This was a period where all strange things, often unthinkable,` seemed to happen which one way or other went the French way to detriment of the real values of life.

It started as soon as the French took over the presidency of the EU at the mid-year point from the Portuguese. At just the same time the French` eliminated the Portuguese from the European Cup semi-final in a game where` the Portuguese were clearly the better outfit. Two days into July the French won the final in the very last minute of injury` time against the Italians who had practically already started celebrating.

It has not stopped there. FIFA give the player of the year award to Frenchman Zidane who has been anything but exemplary on the field of play during the year. It also honoured a self-confessed drug addict as a joint player of the century.

The US has a president elect who has not been factually elected.` At best one can say he has been chosen by the Federal Supreme Court in a highly contentious ruling by the odd vote from` nine.` Just imagine if Milosevic were elected president of Yugoslavia in a similar manner as the one which destined` George W Bush to be the 43rd president of the United States.` Could this be part of the French spell where the candidate actually chosen by the people is denied presidency in` favour of a candidate who, to the delight of the French, has a headline policy of reducing the importance of the American forces on the European continent`

And what about Nice` Is it part of the French spell that has made everyone sign up to an agreement that nobody seems to like It is becoming more and more obvious that at Nice the cart has been put before the horse. If a new ICG is required to decide the allocation of matters which will be reserved for the individual states and those which will be shared at the Centre of the EU, and if this new ICG will have to reorganise the allocation of work among the Institutions and possibly create new institutions, like a second chamber of the European Parliament, how can the agreement at Nice be effectively implemented`

Would` it not have been the natural sequence to have these matters cleared first and then decide what has been decided at Nice In any case what was decided at Nice does not form a good foundation for a democratic expansion of the EU to embrace 27 nations where three big countries` and one small country can bloc decisions taken by the large majority of members representing a majority of the population of EU members countries.

This is not democracy.` This is imposition and arm twisting. It will eventually lead to self-destruction` needing a crisis revision of whatever was decided at Nice before real enlargement can proceed. That will be the time when the people of the EU will curse the French spell of 2000.

Sustainable enlargement can only happen within a truly democratic EU` run by a simple double majority rule where there is clear definition of the principle of subsidiarity to identify unequivocally what matters will each country be allowed to maintain within its national prerogative.

Until the EU is shaped on this basis Malta`s interest as a tiny sovereign island state at the southern periphery of the European continent is` best served by a contractual relationship and not by membership. Membership could become an option when the bad effects of the French spell are some day corrected. Meanwhile celebrate Christmas with the best thing the French can do ` wine and champagne.

After the not so Nice

The Malta Independent on Sunday

After the not so Nice

There are winners and losers emerging from` the Nice Agreement.` So much so that the losers are already raising doubts whether the treaty will eventually be ratified firstly by the European Parliament and then by the parliamentary assemblies of the member countries.

Let`s start with the losers first. The most evident loser is the EU Commission headed by Romano Prodi. The Commission had two major objectives to achieve from the Nice Treaty. Firstly it wanted to have the decision making mechanism reduced entirely to qualified majority system based on the double majority rule;` that of the number of members countries and the population represented by such members. Secondly it wanted to cap the Commission to its present number of 20 which had to be nominated by rotation by the respective member countries.` The Commission wanted to emphasise that the` Commissioners had to be absolutely detached from their nominating countries and so it should not matter who nominated the person. What matters, according to the Commission, is the individual ability of the Commissioners to guard the section of the Treaties for which the Commissioners would be responsible.

Prodi lost on both counts to the evident delight of` President Chirac. The decision making mechanism at the Council of Ministers have been made subject to triple majority tests.` Firstly a simple majority of the member countries, secondly a qualified majority of 255 out of 342 weighted votes (nearly 75%) giving three of the four larger countries an effective` blocking power, and lastly a population majority of 62%. Furthermore certain policy issues related to taxation, social security, defence and immigration have been left subject to the veto of each member country.` The post-Nice evaluation is that this mechanism is still top-heavy to permit an effective and smooth enlargement process.

The second group of losers is that composed of the present small member countries of the EU. Whilst the big countries of Germany, UK,` France, Italy and Spain have had their weighted vote in the Council practically tripled, the other smaller member countries had seen their weighted vote little more than doubled. This has effectively given the larger countries a controlling position in the Council where three big countries can on their own veto any decision even within an enlarged Community of 27 countries.

The winners are clearly the five big countries above mentioned. They kept veto control over matters close to their interest. Taxation, social security and defence were veto reserved matters` fiercely defended by Tony Blair. Free trade in cultural related goods (including media rights) was a no go area for the French. Immigration was a restricted` area for the Germans whilst distribution of regional aid was such an economically important matter for Spain that it agreed only to lift its veto rights thereon after 2007.

Apart from these reserved matters the big countries structured their weighted votes within the Council to ensure that they can effectively block any decision against their particular country`s interest even within an enlarged Community.` In compensation they have watered down their representation within a weakened Commission.

Applicant member countries in the east and Cyprus may at first sight be considered to fall on the winning side as the Nice Treaties seems to put an unofficial entry date for the first group as the 1st of January 2004. This is unofficial and purely indicative and clearly subject to the Nice Treaties not foundering on disfavour at the European Parliament and the parliaments of the present member countries.

Just as a taste of what may be in store was given by the Finnish President Paavo Lipponen who expressed that he was `not at all satisfied with the result` whilst the Portuguese Minister for Europe Seixas de Costa said the EU `stayed very far from what would be needed for` enlargement`.

Also ominous is the decision to hold a further Inter-Governmental Conference in 2004 to decide` about the re-allocation of responsibilities among` the three major EU institutions i.e. Council, Commission and European Parliament. Although declarations have been made that this should not be an obstacle to enlargement,` reality tends to be different and it seems unlikely that enlargement would proceed before conclusion of the new ICG.` So slippage in the enlargement process to 2005 is well on the cards.

And where does this leave Malta as an applicant country` As well predictable Malta has been allocated the lowest weight of votes both in the Council and in the Commission. But what is particularly ominous was not being placed at least at par with other small countries with population of under 1 million i.e. Luxembourg and Cyprus. We have` been placed in a class of our own right at the bottom of the scale!

What I found insulting to my intelligence is proclamations made by the Prime Minister` that our lobbying secured for Malta an additional parliamentary seat from the four originally proposed in the French draft though dismay was expressed that we have not been allocated 6 members as Cyprus and Luxembourg.

If this resulted from our lobbying than we have very poor lobbying indeed. Because this additional Parliamentary seat was clinched at the expense of the loss of one vote in the Council where it carries much more weight. Whilst orignially we were with three votes on par with Cyprus and Luxembour in the revised draft awarding Malta` the extra parliamentary seat,` Cyprus and Luxembourg where awarded an additional vote in the Council whilst Malta stayed on its own with 3 votes. So with a population just 50,000 less than Luxembourg we have one vote less in the Council and one` seat less in Parliament, whilst Cyprus has` the same number of seats in the Council and Parliament as Estonia notwithstanding that the latter has a population double that of Cyprus. Clearly Cyprus had much more effective lobby from Greece whereas the Italians pay little more than lip service to our interests.

But does this really matter` In effect it does not. With three or four votes our position remains the same, except notionally. It remains ineffective and without influence. Our right to nominate a Commissioner will be short lived and in any event any Commissioner we might nominate will be surplus to true requirement and is likely to be allocated areas of trivial importance.

So rather than closing the case for Malta`s membership in the EU the Nice Summit re-inforces the argument that as the only candidate country that has no political motivations for joining the EU, Malta should consider all its alternatives in a cool pragmatic matter. The case for Switzerland, Norway, Iceland, Monaco, San Marino, Lichtenstein or Andorra in the Mediterranean is by no means closed.

After the not so Nice

The Malta Independent on Sunday

After the not so Nice

There are winners and losers emerging from` the Nice Agreement.` So much so that the losers are already raising doubts whether the treaty will eventually be ratified firstly by the European Parliament and then by the parliamentary assemblies of the member countries.

Let`s start with the losers first. The most evident loser is the EU Commission headed by Romano Prodi. The Commission had two major objectives to achieve from the Nice Treaty. Firstly it wanted to have the decision making mechanism reduced entirely to qualified majority system based on the double majority rule;` that of the number of members countries and the population represented by such members. Secondly it wanted to cap the Commission to its present number of 20 which had to be nominated by rotation by the respective member countries.` The Commission wanted to emphasise that the` Commissioners had to be absolutely detached from their nominating countries and so it should not matter who nominated the person. What matters, according to the Commission, is the individual ability of the Commissioners to guard the section of the Treaties for which the Commissioners would be responsible.

Prodi lost on both counts to the evident delight of` President Chirac. The decision making mechanism at the Council of Ministers have been made subject to triple majority tests.` Firstly a simple majority of the member countries, secondly a qualified majority of 255 out of 342 weighted votes (nearly 75%) giving three of the four larger countries an effective` blocking power, and lastly a population majority of 62%. Furthermore certain policy issues related to taxation, social security, defence and immigration have been left subject to the veto of each member country.` The post-Nice evaluation is that this mechanism is still top-heavy to permit an effective and smooth enlargement process.

The second group of losers is that composed of the present small member countries of the EU. Whilst the big countries of Germany, UK,` France, Italy and Spain have had their weighted vote in the Council practically tripled, the other smaller member countries had seen their weighted vote little more than doubled. This has effectively given the larger countries a controlling position in the Council where three big countries can on their own veto any decision even within an enlarged Community of 27 countries.

The winners are clearly the five big countries above mentioned. They kept veto control over matters close to their interest. Taxation, social security and defence were veto reserved matters` fiercely defended by Tony Blair. Free trade in cultural related goods (including media rights) was a no go area for the French. Immigration was a restricted` area for the Germans whilst distribution of regional aid was such an economically important matter for Spain that it agreed only to lift its veto rights thereon after 2007.

Apart from these reserved matters the big countries structured their weighted votes within the Council to ensure that they can effectively block any decision against their particular country`s interest even within an enlarged Community.` In compensation they have watered down their representation within a weakened Commission.

Applicant member countries in the east and Cyprus may at first sight be considered to fall on the winning side as the Nice Treaties seems to put an unofficial entry date for the first group as the 1st of January 2004. This is unofficial and purely indicative and clearly subject to the Nice Treaties not foundering on disfavour at the European Parliament and the parliaments of the present member countries.

Just as a taste of what may be in store was given by the Finnish President Paavo Lipponen who expressed that he was `not at all satisfied with the result` whilst the Portuguese Minister for Europe Seixas de Costa said the EU `stayed very far from what would be needed for` enlargement`.

Also ominous is the decision to hold a further Inter-Governmental Conference in 2004 to decide` about the re-allocation of responsibilities among` the three major EU institutions i.e. Council, Commission and European Parliament. Although declarations have been made that this should not be an obstacle to enlargement,` reality tends to be different and it seems unlikely that enlargement would proceed before conclusion of the new ICG.` So slippage in the enlargement process to 2005 is well on the cards.

And where does this leave Malta as an applicant country` As well predictable Malta has been allocated the lowest weight of votes both in the Council and in the Commission. But what is particularly ominous was not being placed at least at par with other small countries with population of under 1 million i.e. Luxembourg and Cyprus. We have` been placed in a class of our own right at the bottom of the scale!

What I found insulting to my intelligence is proclamations made by the Prime Minister` that our lobbying secured for Malta an additional parliamentary seat from the four originally proposed in the French draft though dismay was expressed that we have not been allocated 6 members as Cyprus and Luxembourg.

If this resulted from our lobbying than we have very poor lobbying indeed. Because this additional Parliamentary seat was clinched at the expense of the loss of one vote in the Council where it carries much more weight. Whilst orignially we were with three votes on par with Cyprus and Luxembour in the revised draft awarding Malta` the extra parliamentary seat,` Cyprus and Luxembourg where awarded an additional vote in the Council whilst Malta stayed on its own with 3 votes. So with a population just 50,000 less than Luxembourg we have one vote less in the Council and one` seat less in Parliament, whilst Cyprus has` the same number of seats in the Council and Parliament as Estonia notwithstanding that the latter has a population double that of Cyprus. Clearly Cyprus had much more effective lobby from Greece whereas the Italians pay little more than lip service to our interests.

But does this really matter` In effect it does not. With three or four votes our position remains the same, except notionally. It remains ineffective and without influence. Our right to nominate a Commissioner will be short lived and in any event any Commissioner we might nominate will be surplus to true requirement and is likely to be allocated areas of trivial importance.

So rather than closing the case for Malta`s membership in the EU the Nice Summit re-inforces the argument that as the only candidate country that has no political motivations for joining the EU, Malta should consider all its alternatives in a cool pragmatic matter. The case for Switzerland, Norway, Iceland, Monaco, San Marino, Lichtenstein or Andorra in the Mediterranean is by no means closed.

Lobbying tal-misthija

Il-Kullhadd Lobbying tal-Misthija

Nhar il-Hadd probabbli il-gvern Malti lahaq il-quccata tal-inkompetenza tieghu fil-mod kif qed imexxi il-progett dwar is-shubija ta` Malta fl-UE.

Il-hadd wara nofs in-nhar Franza ressqet proposta li fiha l-izghar pajjizi li jkun hemm fl-UE meta din tikber ikollhom dawn il-voti:

Latvia voti kunsill` 4` MEP`s 7` popolazzjoni 2,439,000 Slovenja 4` 7 1,978,000 Estonja 4` 6 1,446,000 Cipru` 3` 6 752,000 Lussemburgu` 3` 6 429,000` MALTA 3` 4 379,000

Kien car li Malta kienet giet diskriminata ghax kien hemm certu ftehim sieket li l-izghar tlett pajjizi li ghandhom popolazzjoni ta` anqas minn miljun ruh jinghatw trattament ugwali. Ghalhekk kien insult li Malta nghatat zewg` MEP`s (membri fil-parlament ewropew) anqas minn Cipru u l-Lussemburgu.

Jien ma nafx x`lobbying ghamlet Malta biex din il-proposta tinbidel. Izda jekk sar xi lobbying allura il-veru li kien ghal kollox inefftiv u kif inbidu l-affarijiet fil-ftehim finali flok il-bicca rrangat ruhha aktar tgharrqet. Il-proposta finali hija din:

Latvia voti kunsill` 4` MEP`s 8(+1)` popolazzjoni 2,439,000 Slovenja 4` 7 1,978,000 Estonja 4` 6 1,446,000 Cipru` 4(+1) 6 752,000 Lussemburgu` 4(+1) 6 429,000` MALTA 3` 5(+1)` 379,000

Kif wiehed jista jara fit-tieni proposta minkejja li zdid membri tal-parlament ewropew ghal Malta xorta bqajna anqas mil-Lussemburgu u Cipru. Izda fil-Kunsill fejn konna daqs Cipru u L-Lussemburgu bil-proposta finali Malta giet anqas minn dawn iz-zewg pajjizi u tpoggiet fi klassi ghaliha fil-qiegh net.

B`liema stupitagini johrog il-gvern Malti jiftahar li din il-proposta hija aktar vantagguza ghal Malta u dan gara wara lobbying mil-gvern Malti hija indikrevibbli. Il-kunsill huwa l-post fejn isiru d-decizjonijiet veru dwar l-UE. Vot fil-Kunsill ghandu hafna qawwa` aktar minn vot fil-parlament. Biss biss fil-parlament hemm 738 vot u fil-kunsill hemm 342 vot.

X`akkwist hu dan li fil-konfront tal-Lussemburgu u Cipru naqqasna d-differenza fil-parlament minn tnejn ghal wiehed izda tilifna l-parita` fil-kunsill` Min ferah b`dan l-akkwist veru kaz ferhan ghax cuc u m`ghandux rispett lejn il-poplu Malti. B`liema ragunar xi hadd jista` jkun kuntent li bl-istess popolazzjoni bhal Lussemburgu Malta ghandha vot anqas fil-kunsill u vot anqas fil-parlament ewropew.` Jew kull ma jimporta huwa li jkollna minn jippoza izjed u jgawdi izjed mil-vantaggi tal-membri tal-parlament ewropew`

Jekk xi hadd jargumenta li dan gustifikat ghax Lussemburgu huwa membru antik u Malta se tkun membru gdid nghidlu lidan m`ghandu x`jaqsam xejn.` L-Ungerija wkoll membru gdid li ghandu l-istess popolazzjoni bhal Belgium, membru minn tal-bidu. It-tnejn hadu tnax il-vot fil-kunsill u d`differenza minima favur il-Belgju zammewha biss fil-parlament.` L-istess ragunar japplika bejn il-Polonja u Spanja.

U Malta kienet indaqs ma Cipru u l-Lussemburgu bil-voti fil-kunsill u bil-lobbying li suppost ghamilna u li ferhanin bih waqajna taht fil-qiegh net fi klassi ghalina. Qisu meta konna niehdu sehem fil-Eurovision fis-snin sittin/sebghin.

Issa dan mhux ghax jaghmel wisq differenza ghax xorta bla vuci se nkunu. Izda ghall-unur ta` pajjizna disfatti bhal dawn ihammrulna wiccna.` Izda l-gvern Malti flok jisthi jiftahar bil-lobbying. Anke Ministru Germaniz li gie jzurna din il-gimgha kwazi ghamel apologija talli ma gejniex stmati daqs il-Lussemburgu.

Dan juri kemm Malta qed tinnegozja hazin ma l-UE. Jitrattawna ta` servi u nghidulhom grazzi. Hbieb u sponsorships ta xejn. Weghdi kemm trid u fatti xejn. Immaginaw kemm ser ninnegozjaw kundizzjonijiet xierqa!

Ir-rizultat ta` Nizza jekk xejn kattar il-validita` tal-vizjoni Laburista ghal relazzjoni kuntrattwali mal-UE fuq l-istess bazi ta` dik li ghandhom l-Isvizzeri. Wara Nizza L-Isvizzeri, n-Norvegizi l-Islandizi u nies li jghixu fir-repubbliki zghar ta` Lichtenstein, Andorra, San Marino u Monaco xejn ma biddlu fehmithom li f`Ewropa li kull ma jmur hija dominata minn 3` jew 4 pajjizi kbar, ikun ajhar ghal pajjizi zghar li m`ghandhomx tradizzjoni komunista li jibqghu barra. Izommu kuntatti mil-qrib ma l-UE izda mhux membri bla ebda influwenza fuq dak li jigi deciz ghalihom.

Alfred Mifsud

Where are the Regulators

The Malta Independent

Where are the Regulators`

The way the Maltese consumer continues to be abused and ignored by the Authorities and Regulators whose primary aim should be that of` protecting his or her interest is just amazing.

If you communicate through` electronic mail you must be fed up to your neck by sudden inability to communicate across the network of the various ISP groupings.` You probably don`t careless whether Melita Cable is acting abusively in blocking other ISP`s out of its internet on cable network and similarly you don`t have a firm opinion whether it is legal for these ISP`s to build a sort of fence round their Maltacom`s network` excluding Melita`s own ISP. What you do care however is that your ability to send and receive messages across the net instantaneously has been crippled without as much as an advance warning.

In normal civilised countries such matters would be treated with urgency by a Regulator whose primary interest is defending your right as a consumer to get the service that you pay for. But it appears Malta is neither civilised nor normal. The Regulator first sanctioned Melita`s right to keep its cable network closed to other ISP and now probably has difficulty in forcing the other ISP`s to open op their network to Melita without appearing to use two weights and two measures. It appears that the last on our Regulator`s mind is the interest of the consumer.

The same can be said about how the Regulator in charge of investments in publicly listed companies is failing to perform its duties in defence of the private investors. In this case it is the Malta Stock Exchange that is failing its duty as Regulator.` The Exchange has a duty to keep order in the market which has to operate in a fair and transparent manner. How can the Exchange justify its inaction which jeopardises the interest of investors in Middle Sea Insurance to Government offering a sizeable block of Middle Sea shares at a price 44% below the market price when the offer was made How can the Exchange allow the Government to sell its holdings in Middle Sea at Lm2.28 when the quoted market price was Lm4.06`

The explanation is that the Government had made this commitment in June 1999 and had to honour such a commitment to the shareholders registered on the books of Mid-Med Bank on 5th April 1999.` This is no explanation at all. The Government should have offered these shares immediately and not sleep over the matter for 18 months and then create these monstrous price distortions. The Exchange should have forced government to do so and upon its failure should have suspended the shares of Middle Sea from trading until clarity and transparency` returned to the market. However the Exchange seems only willing to suspend share dealings when requested by the Minister and not when it is necessary to check the Minister as a major player on the market.

The same lack of transparency is being allowed to pervade the market in relation to Bank of Valletta and Lombard Bank shares.

With CCF, the largest shareholder with a significant control over Lombard Bank, now part of the HSBC group following a completed takeover of the French bank by the HSBC, private shareholders and the public at large have a right to be informed whether the Central Bank, as the banking Regulator,` will be allowing this dominance by HSBC on the local banking market. This dominance is` already well marked through its ownership of the former Mid-Med Bank. Or will the Regulator be addressing this dominance by forcing divestment on the part of CCF of its Lombard holdings`

It also overdue for private shareholders to be informed of government`s chosen method for divestment of its significant interest over Bank of Valletta through its 25% holding.` It makes the hell of a difference for the share price` whether these shares will be floated on the market or whether they will be sold to a strategic partner. The market should not be kept guessing government`s intentions.

After all the decision need not be that difficult. Selling this significant holding to a technical partner is the last thing the Country and the Institution needs. A technical partner in Bank of Valletta at the equity level would destroy the technical alliances built by the Bank with other local and foreign institutions at subsidiary and at product level. It would also double the exposure, created by HSBC`s takeover of Mid-Med, to conversion of the banking deposit base into foreign investment products of the foreign technical partner to the detriment of the Maltese banking industry itself.

It is time for` the Regulators to` make their presence felt by restoring confidence and transparency in the markets that have had a sombre performance in the year 2000.

Silg mat-termometru

Il-Kullhadd

Silg mat-Termometru

It `tabib juza t-termometru biex jara jekk il-pazjent ghandux deni. B`hekk skond ma jirruzalta mil-qari tat-termometru jgharaf jaghti il-kura li hemm bzonn biex il-pazjent ifiq. Ikun tabib iblah jekk biex iserrah mohhu flok jara tassew x`inhi t-temperatura li ghandu l-pazjent jaghmel is-silg mat-termometru biex dan ma jimmarkax deni.

Ikun qed jidhaq bih innifsu u izjed w izjed bil-pazjent tieghu jekk bis-silg it-termometru ma jimmarkax deni meta fil-fatt il-pazjent ikun jahraq b`deni ta` ziemel.

L-istess qed jaghmel il-gvern nazzjonalista bil-loghob bl-istatistika. Flok ihalli l-istatistika tipproduci ic-cifri fil-kors normali taghha halli min imexxi mbaghad ikun jaf il-mizuri korretorji li verament ghandu bzonn il-pajjiz, minflok qed naghmlu s-silg mat-termometru billi nimmanipulaw l-istatistika biex il-problemi ma johorgux fil-berah.

Dan inkixef bl-aktar mod car fil-fatt kif gew imkejla mill-indici tal-prezzijiet it-tibdil li kien hemm matul is-snin fi-rati tad-dawl u l-ilma. Il-poplu jibqa mbellah meta filwaqt li huwa mghaffeg taht il-piz ta` zieda qawwija fil-kontijiet li qed jircievi, issa skopra li l-indici tal-prezzijiet qed juri li fil-fatt dawn il-kontijiet rohsu minn dawk li kienu fl-1997 u mhux gholew.

Il-poplu jinsulta ruhu izjed meta jisma lit-teknici ta` l-istatistika u lil Ministru Bonnici jispjega kif l-istatitika qed tahdem b`mod teknikamnet tajjeb. Ara l-poplu x`jimpurtah mit-teknika ta` l-istatistika. Il-poplu jimpurtah mil-hajja li qed jghix kuljum.` Mir-rejalta ta meta jircievi l-kontijiet u jsibhom hafna oghla minn qabel. Jekk teknikament huwiex korrett li din iz-zied fil-prezzijiet ma gietx imkejjla fl-indici tal-prezzijiet li minflok juri tnaqqis il-polu jigi jaqa` u jqum.

Li jrid il-poplu huwa li l-ististika tkun sensittiva ghar-rejalta li qed jghix kuljum u mhux huwa stess jigi kkundizzjonat bl-istatistika meta bhal ma gara f`dan il-kaz jigi mcahhad minn zied fl-gholi tal-hajja skond l-arrangamenti li jezistu bhalissa.

Izda tajjeb hawn nispjegaw kif isir il-loghob u tbazwir bl-istatitika` biex filwaqt li jibqghu fil-parametri permessi mit-teknika, ma jhallux l-istatistika tintuza bhala ghodda effettiva ta dak li jkun tassew qed jigri fl-ekonomija. Hekk gara u dan bilfors sar min xi hadd li jaf sew l-irqaqat tal-mekkanizmi ta` l-istatistika tal-prezzijiet bl-imnut u mbaghad qaghad jibdel ir-rati b`mod li l-istatistika tkejjel rejalta` ferm differenti minn dik li jghixu n-nies kuljum.

Billi l-istatistika hija rizultat ta` survey li sar sitt snin ilu u li ghandu weightings li ma ghadhomx rejalistici ghal gurnata tal-lum min iffissa r-rati l-godda gholla r-rati ta` lilma ghax jaf li dan ghandu weighting baxx fl-indici u qasqas ir-rati ta` konsum baxx tad-dawl li l-aktar li ghandhom weight fl-istatistika. B`hekk irnexxielu li filwaqt li jibqa fil-parametri tat-teknika ta l-istatistika ghamel is-silg mat-termometru biex filwaqt li l-ppolu marid bl-gholi tal-prezzijiet tad-dwal u l-ilma it-termometru ta` l-istatitika qed juri temperatura baxxa hafna. Izda b`daqshekk billi taghmel is-silg mat-termometru ifisser li l-pazjent ma ghandux deni`

L-istess jista jinghad ghal kontijiet ta` l-Enemalta.` Fl-ahhar hargu il-kontijiet ta l-Enemalta ghas-sena li ghalqet f`Settembru 1999. Allajbierek dawn gew approvati fl-4 ta` Ottubru tas-sena 2000 aktar minn sena wara!` Ghaliex` Ghax minkejja il-paroli fil-vojt tal-Ministru Bonnici dwar kemm tilfet flus l-Enemalta bil-hedging agreement li kien ikopri dan il-perjodu l-Enemalta ghamlet qliegh ta kwazi Lm5 miljuni. Ghas-sena li ghalqet fit-30 ta` Settembru 2000 meta ghal 9 xhur minnha l-enemalta, grazzi ghal Ministru` Bonnici kienet bla hedging, l-Enemalta ghamlet telf ta` kwazi Lm2 miljuni. Dan` minkejja ffrankar ta Lm1 miljun lira fid-dawl tat-toroq u l-fatt li sena ta` qabel kellha telf ta` Lm2 miljuni fuq il-kambju li ma giex ripetut fis-sena 2000.

Issa bit-tbazwir ta` figuri li qed jipprogettaw ghas-sena diehla sa Settembru 2001 l-Enemalta tinnewtralizza dan it-telf billi il-gvern jiehu fuqu spejjez li normalment kienet thallas il-korporazzjoni u li b`hekk ser tiffranka Lm2.9 miljuni. Ser tbiegh sussidjarja u b`hekk iddahhal madwar Lm3 miljuni minn qliegh straordinarju u b`hekk il-kotba jigu jaqblu billi l-Enemalta ssib Lm6 miljuni` bil-bakketta magika.` Izda li ma qalux huwa li dawn il-previzjonijiet huma bbazati fuq prezz taz-zejt ferm anqas minn dak li hu llum u ghalhekk il-Gvern, li tant tkaza b`min ghamel hedging u qabblu ma loghob fil-casino`, issa qed jilghab il-loghba tac-cans jittama li l-prezz taz-zejt wara x-xitwa jinzel.

U meta tara dan tista temmen li l-istatistika l-ohra li mhix qed tigi doctored biex l-istampa li turi tkun dik li jixtieq il-gvern u mhux dik li fil-fatt hi` F`gieh is-serjeta` jehtieg li nnehhu s-silg minn mat-termometru.

The Epilogue of the sale of Mid-Med Bank

The Malta Independent on Sunday

The Epilogue to the sale of Mid-Med Bank

As if the sale of Mid-Med Bank was not unorthodox and confused enough, this week we had an epilogue giving a fitting end to this mess-up. Shares of Middle Sea Insurance, which the government had acquired from Mid-Med Bank prior to its sale to HSBC, and` which till last week were being quoted on the Malta Stock Exchange at Lm4.06 each were offered for sale by the government to a restricted group at the favourable price of Lm2.28.

In so doing the government offends two important principles regarding which it is time for our watchdogs and regulators to show their mettle if they are to deserve our respect.

The first principle concerns` government`s right to sell public property with a market value of Lm4.06 to a selected group of citizens at a sub-optimal price of Lm2.28. A value of Lm1,78 per share is being burnt to the collective detriment of the general public which multiplied by the 863,625 shares on offer brings a loss of value to the public detriment of Lm1,537,252. What right does the executive, in the case the Ministry of Finance, have to dispose of public property in this shoddy manner` Was not the sale of Mid-Med Bank itself at clear sub-optimal prices damaging enough` Do we have to destroy more value from the public assets`

What is the Office of the Auditor General doing about this glaring gross negligence costing the public so dearly` Or does the Office of the Auditor General only show its teeth when it has an opportunity to embarrass a Labour administration as it tried to go by going well beyond its terms of reference` when I referred for their prior inspection the purchase of property adjacent to the Centru Ruzar Briffa of Mid-Med Bank in 1998`

By offering these shares at Lm2.28 when their market price was Lm4.06 the government is also making a mockery of the mechanism of the Malta Stock Exchange. Once these shares are quoted they should only be traded through the mechanism of the Stock Exchange and at transparent prices fixed by the Exchange mechanisms.` You just cannot have a share being sold on the Exchange at Lm4.06 and a similar share being sold privately by the government to a selected group of citizens at a substantially lower price.` The evident consequence of this is that many of the private citizens who have the opportunity to buy at below market price will do so and immediately cash their profit by trading the newly acquired shares on the Exchange pushing the quoted price down until an equilibrium price` is reached` between Lm2.28 and` Lm4.06. This has already happened and we have seen Middle Sea Insurance quoted share price rapidly losing value this week and this to the great detriment of existing shareholders in Middle Sea Insurance.

It is the duty of the Malta Stock Exchange to intervene and restore order in the market by insisting that any sale of shares is done through its mechanisms and under its own laws and conditions.` The Malta Stock exchange has the obligation to defend the interest of existing shareholders of Middle Sea.` The same applies to the Board of Directors of Middle Sea who have the duty to defend their minority shareholders against heavy handedness by one of its shareholders, in this case the Government.

The quasi-complete silence by these two organs in the face of such abusive practice is defeaning and says much on the poor level of corporate governance culture even within our publicly quoted companies..` Together with four other colleagues it was only I that` put up a brave front to defend the minority shareholders of Mid-Med Bank from oft declared intentions of the new majority shareholder to acquire all the private shareholding at the same price of Lm2.90 as` paid to the government.

It was our collective action at great personal sacrifice and in the face of abusive threats from those who should have known better, that the minority shareholders right to hold on to their shares was defended. As a result` they enjoyed unparalled growth in the value of their investment which made the government blush in the face for being exposed that it had sold its investment in Mid-Med Bank at less than half its real value.

The Ministry of Finance parried criticism by saying that if these shares were not transferred to the Government prior to the sale of Mid-Med Bank the capital growth of the investment would have benefited the bank` shareholders. But what sort of an argument is this` From the very first agreement signed between the government and HSBC it was made clear that the Middle Sea shares would not be included in the deal and they would be bought by the government from the Bank prior to the share transfer. Initially the price was set at Lm1.60. However,` as between the date of the first agreement in April 1999 and the final agreement in June 1999, the share price increased,` the deal was closed at Lm2.28.

This on its own involved` the government in an extra cost of Lm1.8 million which was all profit for the Bank not even reflected in the share transfer price of Lm2.90 which was fixed prior to this happening. Why on earth the government felt obliged to offer part of these` to shareholders on the register of the Bank` at sub-market is the result of warped reasoning; unless the intention was to coax Mid-Med private shareholders to accept the offer by HSBC at Lm2.90 and invest the proceeds in Middle Sea shares on offer from the government.

Obviously things did not work out that way. Mid-Med Bank shareholders held on to their shares and before the bank had its name changed to HSBC Malta almost exactly one year ago the private shareholders` were laughing all the way to the Bank with near 100% tax-free profit in just 5 months. Why these shareholders should be further priveleged by being offered a quick cash cow to the detriment of the other existing shareholders of Middle Sea is just` incredible mismanagement of public assets. I had defended` the interest of Mid-Med Bank private shareholders even in Court when it was necessary to do so and the results are there for all to see. But it makes no sense to privilege one group of private shareholders to the detriment of others.

This amateurism and meddling in serious finance manners by shoddy hands has to stop before we destroy all confidence in the markets.

And then what sense does it makes to burn Lm1.5 million in public assets value at the same time we are taxing people to their bones`

Read my Lips

Il-Kullhadd

Read my Lips

`Read my lips ` no new taxes` kien wieghed George Bush , l-ex-president Amerikan fil kampanja elettorali f`Awwissu ta` l-1988. Weghda solenni li ghenitu mhux ftit biex jirbah l-elezzjoni ghal presidenza Amerikani biex wara 8 snin presidenza` tar-repubblikan Reagan rega tela` president repubblikan iehor.

Fl-1991 Bush mexxa l-gwerra tal-golf kontra Saddam Hussien li ntrebhet mil-Amerikani bl-gheruq u xniexel biex reggghu lura l-invazjoni tal-Kuwajt mill-Iraq. Il-President George Bush fis-sajf ta` l-1991 kien igawdi popolarita kbira li kienet rekord ghal-President Amerikan f`nofs it-term tieghu. Kulhadd kien konvint li fl-elezzjoni tal-President li kellha ssir fl-1992 Bush kien se jigri biha anke ghaliex mid-demokratici ma kien hemm hadd ta` statura qawwija. Min kien sema` b`Bill Clinton Gvernatur ta` stat zghir ta` Arkansas sa dak iz-zmien`

Izda meta l-budget deficit ta` l-Amerika lahaq proporzjonijiet allarmanti Bush kellu jibla kliemu ta` qabel l-elezzjoni u japprova zieda fit-taxxi. Haseb li l-popolarita tieghu wara ir-rebh tal-gwerra tal-golf` kienet soda bizzejjed biex tirbah skoll bhal dan.

Mar imqarraq!` L-Amerikan ftakru fuq li ftakru il-weghda solenni `Read my lips ` no new taxes` ta` qabel l-elezzjoni u meta giet l-lezzjoni ta` l-1992 insew l-elogju tal-vittorji militari u tajru lil Bush minn nofs talli kien dahaq bihom billi kiser weghda solenni ta` qabel l-elezzjoni.

Il-budget li habbar gvern Nazzjonalista ghas-sena 2001 ghandu kemm l-ezempju ta` `Read my lips` li tajjeb infakkruhom halli l-poplu ma jinsiex x`kien gie mwieghed fis-sajf ta` sentejn ilu.

Weghda numru 33 kienet tghid `Isir tibdil fil-ligi prezenti tas-sisa li mhix differenti hafna minn ta` qabilha biex jerga jibda jinghata r-refunds.`

Weghda solenni li kull min taht il-ligi tas-CET ma kienx qed jiehu refunds issa ser ikun intitolat ghar-refunds. Dan kien jaqbel mal-kritika li n-nazzjonalisti kienu ghamlu lis-sistema tas-CET li ma kientx tipprovdi ghal refunds lis-servizzi tas-sahha u ta` l-edukazzjoni li qabel kienu intitolati ghalihom skond il-VAT.

Fil-budget ta` l-2001 il-Ministru tal-Finanzi habbar li `Is-servizzi tas-sahha u tal-edukazzjoni se tibqa ma tithallas ebda VAT fuqhom. Dawn ser jigu riklassifikati bhala ezenti, li jfisser li dawk li jfornuhom mhux ser jibqghu intitolati li jitolbu refunds.`

Read my lips! Mhux talli weghda solenni ma sehhitx talli qed isir ezatt bil-kontra ta` dak li kien inwieghed.

Weghda 46 kienet tghid li `jkompli l-process ta` privatizzazzjoni u jjinhargu ghal-bejgh ishma f`azjendi li huma tal-Gvern.` Id-dhul minn dan il-bejgh jintuza biex jithallas parti mid-dejn li ngema` tul dawn l-ahhar sentejn u li m`ghandux jirrepeti ruhu jekk ikun hemm il-PN fil-Gvern`. Ezatt, read my lips!

Il-gvern qed jipprogetta li jdahhal Lm40 miljun mil-privatizzazzjoni u maghhom irid jissellef Lm 100 miljun iehor! Anke meta biegh il-Mid-Med Bank ghal prezz bir-ribass ta` Lm83 miljun mhux talli ma hallas xejn` lura d-dejn talli uzahom kollha u ssellef izjed!

Weghda 47 kienet tghid `jinkisbu fin-negozjati ma l-UE fondi ghall-izvilupp ta` l-infrastruttura (toroq u progetti simili) li l-UE ghandha ghal dan l-iskop ghal membri taghha." Read my lips! Lanqas gibna bizzejjed biex inhallsu l-ispejjez tal-addozzjoni tal-acquis ahseb w`ara kemm gibna fondi ghat-toroq. Mhux hekk biss. Talli l-Lm10 miljuni li kien ilna niehdu kull sena mill-1981` mil-Financial Protocol ma l-Italja mis-sena d-diehla spicca. Ghaxar miljuni `l hawn u ghaxar miljuni `l hemm!

Weghda 122 kienet tghid `It-Tour Operators` Support Scheme (TOSS) tinfirex gradwalment ghas-swieq kollha tat-turizmu` Read my lips! It-TOSS giet zarmata ghal kollox.

U l-ahhar wahda ghal-lum ghax inkella ma nispicca qatt. Weghda numru 197 kienet tghid `Jitnaqqas mill-kalkolu tad-dhul il-hlas li jkun qed isiru minhabba dejn ghall-akkwist ta` dar xierqa ghall-familja`

Kulhadd fehem din li jekk inti tidhol f`dejn mal-bank biex tixtri dar fejn toqghod mal-familja u thallas nghidu ahna Lm100 fix-xahar instalment,` b`din il-weghda kien se jonqos mid-dhul taxxabbli tieghek Lm1200 li jekk thallas taxxa 35% tkun ser tiffrnaka Lm420 kull sena. Read my lips!` Fid-diskors tal-budget il-Ministru qal li ser jintaxxa dak li jiffranka impjegat tal-bank talli jissellef biex jixtri d-dar tieghu u l-bank jiccargjah b`rata agevolata.` Jekk wiehed issellef Lm35000 biex jixtri dar u jhallas Lm100 fix-xahar biex ihallas din il-loan b`rata ta` 3% fuq medda ta` 30 sena issa tat-taxxa ser jghidlu li qed jiffranka 4% fuq Lm36000 li jigu Lm1440.` Minn dan inaqqas Lm300 u jintaxxah fuq Lm1140 li bir-rata ta` 35%; jigifieri` zieda fit-taxxa ta` Lm504 li kontriha t-taxpayer ma ghandu dhul ta xejn. Flok iffranka Lm420 lira taxxa kif kien imwieghed fil-programm elettorali ser jehel Lm504 taxxa izjed.

Lil dan il-gvern il-klassi baxxa u medja trid tidhlu kelma wahda: Read My Lips ` warrab!

Alfred Mifsud

A Budget 2001 Analysis 3 - The Economic Aspects

The Times of Malta



Mismanagement of the First Degree

A government budget is not meant purely to be a sterile exercise in planning government financial income and expenditure streams. Its higher order objective is to stimulate and shape the nation`s economic growth in a sustainable well-balanced manner.

To measure whether the budget reaches these macro-economic objectives the following benchmarks are to be used:

Is the budget rolling back the frontiers of the state`s intervention in the economy in order to allow more room for private sector initiative`

Is the budget stimulating sensible investment in infrastructure (by the public sector) and in productive investment (by the private sector)`

Is the budget stimulating efficiency growth by reducing the impact of direct taxation and is it controlling consumption growth by taxing increased consumption levels.

These are the three crucial tests that a budget has to pass if it is to serve its purpose of being an effective macro-economic tool. In each of these three tests the 2001 budget fails miserably.

Rolling back the frontiers of the state (a Thatcherite` plagiarism) has become an accepted norm of modern economic management. Whilst privatisation might play a part in this it is not the crucial element. Often privatisation involves those government controlled firms which are already run on acceptable efficiency levels. Given that monopolies are not privatised, no government controlled entities would qualify for privatisation if inefficiently run. Therefore privatisation does not necessarily produces efficiency gain. Next year the government is planning only Lm40 million privatisation revenues which could be obtained by the mere privatisation of the remaining 25% stake of Bank of Valletta leaving some Lm15 million to spare on current valuations. If budget figures are anything to go by privatisation activity planned for next looks pretty subdued. One questions how this could be equated with the zero coupon privatisation bonds so dismally launched just a few weeks ago, promising priority allocation in forthcoming privatisation initiatives.

Where rolling back the frontiers of the state really produces the much needed efficiency gains is in control of government recurrent expenditure where government becomes leaner and more effective,` demanding less tax revenues to support delivery of its services.` Government recurrent expenditure and public debt servicing for next year is planned to reach Lm672 million.` Taking a GDP figure of Lm1672 million ( as in the medium term financial strategy of 1998) this is equivalent to 40% of the GDP. In the `dark` socialist years of 1985 to 1987 this averaged 37%.` Last year this was 39%. Rather than rolling back the frontiers of the state this budget rolls them forward.` Government remains the sick fat guy occupying too much space in the economy and sucking in resources from the hard-working productive sector who perform in spite of, rather than because of the government.

On the second test of stimulating investment the budget also fails. Not one single measure in the budget is meant to stimulate private sector investment . On the contrary the private sector has to face increased costs (wages and energy costs) whilst having to grapple with local demand in subdued mode as the middle class is creamed off of its discretionary spending power.

Government`s own capital investment programme remains on low key with total investment (excluding subsidies) at Lm60 million of which only Lm33 million is productive and infrastructural.` This is more or less on the same level as the last two years.` The massive investment needed in road improvement, in public transport and environmental projects will just have to wait better times and a more imaginative administration.

On the third test of stimulating efficiency by reducing the impact of direct taxation and increasing consumption taxes this budget again fails. Direct taxes (income tax and National insurance) are projected at Lm345 million equivalent to 20.6% of the GDP whereas consumption and other indirect taxes` are projected Lm254 being 15.2% of the GDP. Compare these to past trends of the last 10 years.

Taxes as a percentage of GDP



Year

Direct

Indirect



%

% 1985

20.29

10.38 1990

17.09

12.43 1991

16.57

12.86 1992

17.36

12.67 1993

19.37

11.96 1994

18.43

11.47 1995

18.47

14.84 1996

17.32

14.35 1997

18.07

13.69 1998

17.57

12.74 1999

18.77

14.29 2000

19.84

14.58 2001

20.63

15.19

The ratio of direct taxation has ominously crept back to the 1985 level even though consumption and indirect level has reached its highest ever level. Whilst the latter is encouraging the former runs counter to efficiency drives needed by the economy. Rather than force direct taxes out of the population stifling the initiative to work harder there was a strong case for increasing indirect taxes on the true discretionary spending to bring about a rough balance between direct and indirect taxation.

Not only this has not happened but the Minister made the colossal mistake of` extending the tax base on collective investment schemes. This is an error of judgement as big as the announced re-introduction (later withdrawn) of the capital assets return in the 1998 budget speech. People who shifted their financial wealth into these long term assets believing in the Government strategy of encouraging long term savings and repatriation of exported capital will now have a serious re-think and could be motivated to re-export their capital. This is the last thing our economy presently needs.

Even as a tool of macro-economic policy this budget has failed to deliver a clear strategy for wealth creation to re-vitalise an economy` already suffering from serious imbalances and threatened by collapse of domestic demand. If we cannot perform serious re-structuring in the background of healthy international growth and export demand for our goods and services just imagine the problems we will have on the next downturn of international economy. Clearly we are living for the day.

Alfred Mifsud

Tackling the Problem at the Edges

The Malta Independent

Tackling the Problem at the Edges

The most serious flaw in the general economic orientation of the 2001 Budget is that it seeks to address the imbalances by pressing on the accelerator of tax collection. I continue to maintain that the real solution has to be a tripod.

Tax enforcement and efficient collection is one of the tripod legs but it cannot be the only one. Equally important are the legs of expenditure control and economic growth. With these three forces working together the budget deficit could have been controlled over a period of three to four years.` Yet five budgets later we are still grappling with the deficit problem because the only attempt made to solving it has been simply through tax increases and enforcement.

Some commentators` re-converted to socialism criticise me when they manipulate my argument as if I were defending tax evaders. Would they classify bank employees enjoying cheap house loans as tax evaders` Is` a company car for a senior executive who works on average 12 hours a day and is always at the beck and call of his boss a tax crime meriting the wrought of an administration suddenly discovering what was being practised within its own ranks`

I do not defend tax evaders.` I am simply pointing out the truism that our economic problems are too complex to be resolved simply by swelling government`s tax revenues. This is attacking the problem at its edges. It will keep pumping more and more imbalances from its core.

The core of the problem is government lax expenditure. Of course it is quite easy signing generous collective agreements giving senior civil servants 30% increase in their salary. Of course it is easy sub-contracting various functions out of government leaving the employees who should be doing the job in the first place with pretty nothing to do. Of course it is easy recruiting new employees in the public sector rather than re-train and re-organise human resources to obtain maximum mileage from resources already being expensed.` Of course it is easy spending Lm 1 million on Expo 2000 and Lm10 million on the NPAA. Spending other people`s money always comes easy.

The problem is that all this requires additional tax revenue to finance. We can no longer rely on foreign grants. The Lm10` million annually we used to receive from the Italian Financial Protocol have also vanished into thin air.` The Lm100 million from the EU do no longer merit a mention.` All this expenditure has to come from our taxes.

What we should be doing is offering incentives to public sector employees in grades where there is a surplus headcount to true operational requirement,` to seek a productive job in the private sector. As a minimum we could offer such employees three year leave of absence from the public sector where the state continues to pay 50% of their salary. If they can find a job earning 70% of their salary they would get a 20% increase, save 50% of their cost to the government and provide competitively priced human resources to the private sector. Such schemes were recommended in 1997 and heavily criticised by the Nationalist Party then in opposition. Four years have been wasted until we have now re-discovered the need to study public-private partnerships! What sheer waste of time and money for political opportunism.

If this` scheme were to be launched government will have to do a root and branch exercise to see what functions could be economically outsourced to the private sector in order to create demand for private sector employment. Such imaginative measures would reduce government expenditure, increase the income of idling employees and produce economic growth by putting idle resources to work.` Together with tax enforcement it would form the tripod of a real lasting solution.

The 2001 budget instead castigates the middle class on whose efforts, dedication and commitment the well being of this country substantially depends.

Alfred Mifsud

A Budget 2001 Analysis 2 - The Social Aspects

The Times of Malta



An Attack on the Middle Class

Government friendly critics have hailed this budget as pure magic in its plans to increase tax revenues without the announcements of specific hard measures on the same scale as that contained in the year 2000 budget.

As if by magic the government revenue will be swelled by a further Lm56 million, following the Lm63 million of the year 2000, without actually taxing us. First impressions might suggest that we willing be getting about half the Lm100 million promised in the 1998 pre-election run up as available grants from the EU and the Minister wrongly classified this as tax revenue.

But this is not the case. Quite the contrary. This year the EU grants are only Lm4.9 million which have to finance less than half the additional Lm10 million cost budgetted for the adoption of the National Plan for Adoption of the Acquis (NPAA). We are more than Lm 5 million out of pocket with the EU whereas last year we had net grants of Lm10 million including the Italian Financial protocol. This has now disappeared into thin air. A Lm10 million grant regularly received for the last 20 years has just been allowed to lapse. No wonder the Italian Government is the major supporter of our EU application!

So after all the Lm56 million additional tax revenue planned for year 2001 is being paid by you and me. No two ways about it. During next year we will collectively be Lm56 million poorer to satisfy the financial super-hero`s insatiable appetite for more and yet some more.

Those unions that` have been quick in taking credit for stopping the Minister from taking further harsh measures had better think twice unless they are merely defending the workers who earn a pure minimum wage. This budget is an attack on whoever earns Lm4000 and more with increasing intensity of its viciousness as you go up the scale of the middle class and upper middle class.` Whether it is also a very belated attempt to attack the super-rich still has to be seen as the effectiveness of the benchmarking exercise for the self-employed and professionals does not necessarily guarantee its successful implementation. The successful implementation of the measures on employees ( not self-employed) who earn between Lm4000 and upwards of Lm7500 is however guaranteed.` The squeeze of this sector`s standard of living is equally assured.

Anyone earning Lm4000, Lm5500, and Lm7500 during year 2000 will find out that every lira earned more in year 2001, whether by cost of living increase, annual grade notches, collective agreements or newly imputed taxable income on hitherto untaxed fringe benefits will be progressively taxed at 15%, 25% and 35% respectively.

So a person earning Lm73 per week (they don`t carry you very far these days especially if you have a family to feed, dress and educate) will find that the Lm1.50 cost of living increase will be eroded by deduction at source of 15c National Insurance and 23c tax. With inflation at 3% a Lm4000 earner needs to net post-taxes increase of Lm2.31 merely to stand still. Instead he is getting a mere net Lm1.11 with which he has to finance new taxes like bread price increase (no special Lm10 payment per person this year) cigarette taxes and removal of water and electricity rates as an assured minimum.` You may think that this is not serious but when one is in this income bracket one counts one`s cents not just the liri.

If you are a middle salaried executive working many hours a week without being entitled to overtime you used to accept it because you were entitled to several untaxed fringe benefits. It is not fair to argue these were meant to be taxed in the first place. The Income Tax law has been in force for 52 years; ample time to enforce what needs enforcement. These fringe benefits were not hidden. Many were part of collective agreements like subsidised house loans for bank employees and free travel by Air Malta dependants. The provision of a paid company car had become the unchallenged norm. What was left unchallenged for 52 years is now being challenged and changed overnight. Some middle management executives, especially bank employees with subsidised house loans could be hit by as much as Lm100 per month additional tax.` After deducting your house loan and life policy instalments, your children`s schools fees (this is not discretionary spending) Lm100 a month is a very big percentage of your true disposable income.

This is a savage attack on the middle management, on those who have to work hard to execute the strategies of their management. We have deficiencies in the quality and quantity of our middle management.` The poor state of efficiency of our public sector and the ineffective restructuring of domestically oriented industry bear proof to this. Rather than encourage this crucial sector for economic growth ( just see how many are devoting their limited free time and private funds to follow distance MBA courses)our financial super hero has decided to launch a vicious attack on these sitting ducks who cannot escape his tax hatchet.

After 52 years of neglect the least that was expected was for fringe benefit taxation to be phased in over a three year period in order to give employees time to re-negotiate their remuneration package with their employers in order to take account of the higher taxation impact. Our financial super hero would have none of this and in Mintoff crass one swoop style he edicts the orders which will undoubtedly cut the ground from beneath the standard of living of the middle class and de-motivate them in their work performance right when the economy needs their greater commitment.

With much less disposable income these middle class income group will have to face higher bills in areas of non-discretionary spending. Removal of tax refunds for health and education activities will ultimately lead to higher bills which these sitting ducks will have no option but to pay. Or are they expected to start sending their children to free state schools Or are they expected to queue up behind the closed doors of our regional health centers rather than continue with expensive private health services`

Our finance superior hero wants to address the deficit problem he himself created by destroying the middle class that elected him.

Tomorrow: A Budget 2001 ` economic aspects

Alfred Mifsud

A Budget 2001 Analysis 1 - The Perspective

The Times of Malta



The 2001 Budget in Perspective

The reaction to the 2001 Budget was an evident organised concerted artificial blitz by the government friendly media depicting the author, the Minister of Finance, as a super-human financial genius, head and shoulders above all else.

It is therefore dutiful as a prelude to this analysis to place the 2001 Budget against a medium term background. It is the fifth consecutive budget that has budget deficit control as the primary macro-economic objective.` The fact that five years and Lm` 217 million additional` tax revenue (see Table 1) later we would still be facing a horrendous budget deficit problem at the end of the year 2001 shows the magnitude of the problem which developed in the country`s finances during 1996.























TABLE 1







Tax Revenues ` Lm millions





























1996 2001 Increase

















Income Tax

93 163 70



Social security

126 182 56

















Direct Tax

219 345 126

















Customs and excise

32 62 30



Licences , Taxes & Fines

52 76 24

















Consumption tax

79 116 37

















Indirect Tax

163 254 91

















Total Tax revenue

382 599 217



















By Government own estimates the Budget deficit next year is targetted at Lm83 million compared to Lm133 million in 1996 (these figures are challenged later on in this analysis) a drop of a mere Lm50 million in spite of increased tax revenue increases of Lm217 million. This demonstrates the structural nature of the problem and the momentum it had when Labour entered the government in the last quarter of 1996. We have yet to tame the horse five years later!

And it is appropriate to underline that the same Minister who is now being depicted by friendly press as the super hero capable of resolving the budget deficit is the very same architect who with four budgets between 1992 and 1996 created the structural deficit problems in the first place.

Between 1992 and 1996 any sensible Minister of Finance would have sequenced his strategies as follows:

Control of government expenditure, especially recurrent expenditure. Introduce VAT to establish a tax net capturing services within its base and provide the raw data for income tax enforcement. Enforce direct taxation. Increase in the lower tax-free or moderately taxed income bands.

Instead of doing these steps in sequence the Minister confused the order to 4, 2,3, 1. And as far as 1 is concerned it is still mere intentions and vague platitudes.

The consequences of these wrongly sequenced strategies is the development of a horrendous budget deficit which is proving so hard to tame. This is coupled with the explosion of the national debt which has become a huge burden even merely to service the interest payments and this at a time of record low interest rates. I just shudder to think the consequences on public finances if full capital liberalisation were to co-incide with an international increase in interest rates!

At a time when chronic deficit countries like US, UK and Italy moved their budgets to manageable deficits (Italy) or sizeable surpluses (UK & USA) our finance super-hero ran havoc with the public finances trusted under his care.

I dispute whether in effect the budget deficit is effectively being controlled. Table 2 gives a like for like comparison of government finances for each year from 1996 till 2001 with revised estimates figures for 2000 and budget figures for 2001. The budget figure for 1998 has been adjusted to remove one off items which the Minister included in that year`s budget and which would normally have been spread on following years.

As can be seen the real reduction in deficit between 1996 and 2001 is not Lm50 million as earlier argued but a mere Lm30 million if a true apples for apples comparison is made. These are the government`s own figures divested from convenient manipulations. A mere reduction in budget deficit of Lm30 million in spite of tax revenue increases of Lm217 million. This is not the work of a super finance hero. It is work of the shoddy hands that created the deficit in the first place and the shoddier still approach of someone who takes the easy way out of trying to solve the problem by increasing tax revenues without making any decent attempt to control expenditure. This goes against all principles of modern economic management. It shows the accountant within our Minister supercedes any traces of the economist within him.

Tomorrow: The Social Aspects of the Budget

Alfred Mifsud

Budget cajtier

Il-Kullhadd

Budget Cajtier

Il-Budget tas-sena d-diehla jilghab cajta goffa mal-poplu Malti.` Ghax il-gvern ghadu jkarkar bil-problema tad-deficit li holqha hu stess fl-1995 u li hames budgets iebsa ma kienux bizzejjed` biex ifejquha, ghax il-gvern mhux ikabbar l-ekonomija bizzejjed halli jiggenera flus akbar mit-taxxi bla ma jzid ir-rati, ghax il-polu ga ntaxxat sa snienu u ma jiflahx aktar taxxi, il-gvern qed jilghab cajta maghna lkoll.

Cajta li ser jehdilna minn bwietna b`mod kollettiv Lm56 miljun lira izjed f`taxxi bla ma ngergru u bla ma nindunaw. Biex tifhmu kemm hi goffa c-cajta trid zzommu f`mohhkom li biz-zieda fl-income tax, fil-bolla u l-VAT fuq il-petrol il-gvern kabbar id-dhul mit-taxxi matul is-sena 2000 b`madwar Lm62 miljun. Issa jrid kwazi l-istess zieda fid-dhul mit-taxxi bla ma jgholli t-taxxi u bla ma nindunaw.

Xogholna bhala gurnalisti u osservaturi ekonomici hija li nfehmukom sew kif ser jigri dan halli meta thallsu t-taxxi ta lanqas tifhmu li qed thallsu t-taxxi u taghtu l-Cesare dak li hu ta` Cesare.

Ha nghati ftit ezempji.` Il-Gvern ta zieda ta Lm1.50 fil-gimgha. Probabbli li minhabba l-increments normali hafna haddiema jiehdu zieda ta' Lm1.50 ohra. Dawk tan-naha t`isfel tafux ghax ta` fuq jiehdu hafna izjed. Mela haddiema zghir bejn l-gholi tal-hajja u l-increment normali jiehu zieda ta madwar Lm3 fil-gimgha sew Lm156 f`sena. Din iz-zieda mhux tajba biex ittejjeb il-livell ta` l- ghixien. Ghal min jaqla Lm4000 din hija zieda ta` anqas minn 4% li kemm kemm tkopri l-inflazzjoni. Mhuix zieda rejali izda biss zieda nominali.

Izda ghat `taxxa mod iehor. Min kien jaqla sa Lm4000 ma kienx ihallas taxxa. Issa biz-zeda ta` Lm156 min jaqla Lm4156 se jkollu jhallas Lm23.40 taxxa. Tista tghid li mill-Lm1.50 zieda Lm0.50 sejra tmur f`taxxa u 30 centezmu iehor imur zieda fil-bolla.

Zdiditlek jew ma zdiditekx it-taxxa ja haddiem zghir li ghalik kull lira tghodd Mhux billi ma zidlekx ir-rati it-taxxa xorta ha jixrobilek minn butek.

Ezempju iehor. Is-servizzi tas-sahha u ta l-edukazzjoni sal-lum kienu jiehdu lura min ghand il-gvern kull VAT li jhallsu fuq ix-xiri. Mis-sena d-diehla il-gvern se jibdel il-ligi tal-VAT b`mod li dawn ma jistghux jitolbu izjed refunds. Kisra ta` weghda elettorali solenni. Allura l-iskejjel privati, teachers tal-privat, tobba, klinici u sptarijiet privati dawn ser jizdiedulhom l-ispejjez. Tahsbu li dawn l-ispejjez ser jassorbuhom huma` Jien perswaz li dawn l-ispejjez irid jaghmel tajjeb ghalihom il-konsumatur permezz ta` zieda fit-tariffi. Biex il-gvern ikattar id-dhul tieghu ser jitfa piz b`mod indirett fuq il-konsumatur.

Ezempju iehor.` Kellek xi kapital zghir investit fi skema ta tifdil kollettiv` Kont tiehu redittu minghajr ma thallas taxxa` Issa daqshekk! Fuq dawn l-iskemi ser thallas taxxa bhal ma thallas fuq l-imghax tal-bank. Forsi hawn min jghid li dan sew. U forsi li hekk hu. Izda l-fatt huwa li lilek haddiem li kont warrabt xi haga f`fond ta investiment kollettiv biex tahseb ghal-pensjoni supplimentari ghax taf li dik tal-gvern eventwalment ma sservikx,` flok incentivak bit-taxxa biex tfaddal izjed intaxxak talli qed tfaddal.

Ara lis-sinjur li ghandu kapital kbir li jista jixtri ishma dirett fil-borza ghax il-kobor tal-kapital jippermettilu li jifrex u ghalhekk ma ghandux bzonn skemi ta` ftehim kollettiv, lil dan ma ntaxxajnih xejn.` Lilek haddiem li ghandek kapital zghir u jkollok tuza skemi ta` tifdil kollettiv lilek jintaxxaw kontra kull sens ta` direzzjoni fiskali moderna.

Dawn huma biss tlett ezempji zghar dwar kif il-budget intaxxak bla ma intaxxak. Bhal dawn zgur insibu izjed ghax hemm certi figuri ma jaghmlux sens jekk ma jkunux sostnuti minn taxxi li ghad iridu jithabbru matul il-kors tas-sena.

Bhala wiehed li kont stennejt zieda fil-prezz tal-petrol minhabba l-gholi fil-prezz taz-zejt tajjeb nispjega kif din il-bicca qed tigi evitata artificjalment. Biex il-gvern johrog lill-Enemalta mit-tabxa li dahhalha fiha il-Ministru Bonnici meta` ma ghamilx hedging ghal din is-sena, il-Gvern ha fuqu spejjez li normalment kienet iggorrhom l-Enemalta. Dan jinkludi tnehhija ta` dazji fuq il-petrol u l-ispejjez ta` dawl pubbliku fit-toroq. L-Enemalta b`hekk irkuprat ftit mit-telf izda xorta mhux bizzejjed biex tilqa ghax-xiri taz-zejt bil-prezz tal-lum u mhux bizzjjed biex l-Enemalta tilqa` l-obbligi finanzjarji tal-loans u tinvesti madwar Lm10 miljun lira ohra biex ittejjeb is-servizz taghha.

Jidher car li l-gvern qed jghix bit-tama li l-prezz taz-zejt jorhos matul is-sena d-diehla hekk kif tghaddi x-xitwa. Spekulazzjoni u tmexxija bit-tama.` Jekk le mis-sena ta` wara ga avzati li rridu nhallsu li hemm bzonn biex naghmlu tajjeb ghal gholi fil-prezz taz-zejt..

Talli qed jilghab dac-cajt goff mal-poplu malti dal-gvern haqqu li nilghabu cajta goffa fuqu.` L-ahjar hin biex naghmlu dan huwa meta nkunu fil-kamerin nhar l-elezzjoni. Kull kliem iehor huwa zejjed.

Alfred Mifsud

A Touch of Unreal

The Malta Independent

A Touch of Unreal

The Budget for 2001 was the fifth consecutive budget conditioned by the unacceptably high public sector finance deficit, the control of which demands attention prior to all other economic objectives.

The seriousness of the fiscal deficit has now been hammered so much in people`s mind that whereas the first two budgets were considered unacceptably harsh this fifth one has an air of general acceptability stamped on it for` the simple reason that it does not carry harsh specific measures which characterised the previous four. People have started to accept that they ought to be thankful for perceiving that they are not` being taxed too much more.

Whilst shorn of the specific tough measures which characterised last year`s budget yet total tax revenue is still expected to increase by Lm56 million over the revised estimate of` the current year which in itself is Lm62 million above that of 1999. The question everyone is asking is how is it that we shall collectively be paying nearly the same level of` additional taxes as this year without undergoing the additional tough measures as experienced this year` Does not this have a touch of unreal`

In reality there is a new measure extending the income tax base onto quoted collective investment schemes but this would not produce more than Lm3 to Lm4 million additional tax` revenue. There is a hidden increase in direct taxes as the inflation creep carries taxpayers across to higher tax brackets as their nominal wages increase but their real value stays static and effectively reduces through higher tax impact. Yet the larger part of the increase has to come from more rigorous enforcement of tax rules. This is the punch line of the budget.

Government had so little room for manoeuvring that in my column of 13th October last I had predicted `All this means that for next year fiscal enforcement to increase the tax revenue without raising tax rates seems to be the name of the game. This will keep the everybody happy and square the circle except that there is a point beyond which sudden enforcement on a struggling tax-paying sector of the economy( the export sector is generally on tax holiday) becomes counter-productive as it would flatten long term economic growth. Are we inching or speeding towards this point

As the measures unfold those effected will find the next year`s` budget as distasteful as that of this year. Yet the budget has been skilfully structured to` make the individual suffer in silence. Protesting loudly would expose him or her as a long standing tax evader.

Whilst economically sensible this could be politically treacherous ground. This budget not only effectively addresses the public deficit by taxing the voter, it does so without giving him or her` an opportunity to profess discontent. This particularly effects the middle class sector that is fertile ground for the government`s political support.

This middle class is effectively being taxed for employment perks which through` prior long standing non-enforcement had embedded a standard of living higher than the` gross declared salary levels would normally permit. All this now has to be unwound.

When people are made to suffer without even being given an opportunity to say ouch!, discontent has a habit of showing itself through` one`s` solitude in the voting cabinet. !996 is not all that far to cancel memories. But as a mid-term budget the government must probably feel that` the political risks are acceptable and recoupable in subsequent budgets as government expenditure gets over the hump of the public sector` collective agreement expense and some real effort starts being made to control expenditure.` That shows why Labour 1998 exercise also made sense as a mid-term budget. Its only defect was that it was not at all mid-term!

Your editor hailed this budget as fair. This is one of those budget that any adjective would fit. You can call it` cheat as much as` fair. Politically the middle class will find itself cheated and hurt as the technicalities of the budget measures translate themselves into lowering of their standard of living. Economically it is a fair attempt to address the problem which this same administration created in the mid-90`s and which` five tax rich budgets have not yet been able to bring under control. That exposes the size of the problem!

Alfred Mifsud

Kif sejra l-ekonomija(2)

Il-Kullhadd

Fejn Sejra L-Ekonomija`(2)

Wara li l-gimgha l-ohra tajt daqqa t`ghejn lejn il-Prodott Gross Domestiku u s-settur tal-manifattura issa nhares ftit lejn is-settur tat-turizmu.

Il-figuri tat-turisti li gew sa Awissu li ghadda juru tnaqqis.` Zghir,` imma tnaqqis. In-numru ta` granet li damu it-turisti fostna u l-infiq tat-turisti waqt li jkunu maghna qed juri tnaqqis. In-numru ta` turisti mill-cruise liners li jghaddu ftit sieghat fostna ukoll qed juri tnaqqis.

Mela m`hemmx dubju li din is-sena it-turizmu batut ghax mhux jikkontribwixxi ghaz-zieda fl-ekonomija. L-aktar li tista` tghid huwa li qieghed stabbli bejn wiehed u iehor daqs is-sena l-ohra.

Min huwa analista ekonomiku serju jaf li dawn huma sinjali hziena specjlament wara li l-gvern laburista kien ta spinta lil dan is-settur li kien rega beda jikber fl-1997 u 1998, kompla jikber fl-1999 izda fl-2000 donnu tilef ir-ritmu ta` tkabbir tieghu. L-indikaturi huma li jekk ma jsir xejn dan is-settur tilef l-ispinta u sena d-diehla mhux ser jikkontribwixxi ghat-tkabbir ekonimku li dan il-pajjiz tant ghandu bzonn.

Nigu issa l-istatistika ta` kemm qed jizdiedu l-impjiegi. Din turi li f`sena sa Lulju li ghadda l-impjiegi zdiedu bi 3000 ruh full time u 2500 part-time li ma ghandhomx impjieg iehor full-time.

Anke jekk din l-istatistika hija korretta ( li probabbli mhux il-kaz) dan it-tkabbir fl-impjiegi huwa sors ta` thassib aktar milli sors ta` sodisfazzjon. Dan ghaliex iz-zieda fl-impjiegi hija sproporzjonata mat-tkabbir ekonomiku u ghalhekk ifisser li l-efficjenza tal-haddiema taghna sejra lura mhux il-quddiem. Jekk hemm aktar mies jahdmu u l-ekonomija mhix tikber bl-istess rata ta` kemm zdiedu l-impjiegi mela l-efficjenza ta` kull unit ta` xoghol sejra lura.

Din serja ghax turi kemm il-figuri huma artificjali u mhux sostenibbli. L-impjiegi veru jigi minn investiment produttiv mahsub sew li jrendi hafna aktar mill-ispejjez ta` kull impjieg. Meta qed nikkompetu fi swieq barranin u meta pajjizi ohra permezz tat-tekonologija qed jaghmlu avvanzi kbar fl-efficjenza tar-rizorsi umani taghhom huwa ta` malawgurju li l-efficjenza tal-haddiema taghna sejra lura.

Ghala qed jigri dan Forsi il-haddiema Maltin huma nferjuri ghal haddiema ta` pajjizi ohra Zgur mhux il-kaz kif tixhed il-prezenza ta` industriji barranin fostna.` Qed jigri ghax mhux minnu li qed jizdiedu dawn l-impjiegi kollha u l-istatistika qed tigi mgeddba. Il-Bank Centrali fir-rapport tieghu ta` Settembru 2000 jghid car u tond li l-istatistika `may reflect one-off effects of changes in labour data reporting practices`. Jehtieg spjega ta` x`inbidel u ghaliex halli tista` ssir analizi objettiva.

It-tieni iz-zieda fl-impjiega hija parzjalment rizultat ta` decizjonijiet ekonomici li ttiehdu snin ilu fi progetti li jew bdew jahdmu din is-sena ( ez. il-Hilton u l-Portomaso) jew issa qed jilhqu il-kolmo tal-kostruzzjoni taghhom ( ez. l-isptar ta` tal-Qroqq, u l-progetti ta` Bay Street, Embassy u l-Eden Leisure).

Imbaghad wiehed jistaqsi kif minkejja n-nies zejda li ghandu l-gvern flok dawn jigu mharrga re-deployed il-gvern jibqa jzid in-numru ta` nies mieghu. X`serjeta` hi din mit-taxxi li ahna nhallsu`

Nitkellmu issa fuq il-finanzi tal-gvern.` M`hemmx dubju li din is-sena tjiebu fuq is-sena l-ohra. Dan ma sarx bhal ma gara f`pajjizi ohra, bhal l-Amerika u l-Ingilterra, b`rizultat tat-tkabbir ekonomiku. Sar mit-taxxi li l-gvern qieghed jiehu mil-but tal-haddiema l-aktar dawk tal-klassi medja. Fuq perjodu ta` 8 xhur sa Awissu il-gvern gabar minghand il-poplu f`income tax, national insurance(bolla) VAT u taxxi ohra Lm40 miljun izjed mis-sena l-ohrau Lm75 aktar minn sentejn ilu. Minkejja dan it-tabella li qed ingib turi li l-izbilanc nizel biss b`ghaxar miljuni minn fejn hallih gvern laburista fl-ahhar ta` Awissu 1998.

` ` 8 xhur` 8 xhur 8 xhur ` ` Awissu 1998 Awissu 1999 Awissu 200 ` Lm miljuni` Lm miljuni Lm miljuni

Dhul ordinarju` 351 386 402 Naqqas Privatizazzjoni` 36 36 12 ` ------- ------` -------- Dhul rikurrenti` 315 350 390**

Hrug rikurrenti` (318) (345)` (361) -------- ------` ------- (z)bilanc rikurrenti (3) 5 29

Imghaxijiet` (36) (42)` (46) Nefqa kapitali (39) (59)` (51) ` ---------` --------- ----------- Zbilanc rejali (78) (96)` (68)++`



**zieda fid-dhul mit-taxxi ta Lm40 fuq is-sena l-ohra u Lm75 fuq sentejn ilu. ++tnaqqis rejali ta` l-izbilanc to Lm32 fuq il-sena l-ohra u Lm10 niljuni fuq sentejn ilu,

Meta l-gvern jiftahar kemm naqqas l-izbilanc ikun qed jiftahar kemm intaxxak. Min tkaza bit-33 taxxa ta` Alfred Sant ghamel 3 taxxi ( iz-zieda fl-income tax , fil-bolla u fil-VAT fuq il-petrol) li jiswew taqs 333 taxxi ta` Alfred Sant. Minkejja dan filwaqt li gabar Lm75 miljun lira taxxi izjed minn sentejn ilu naqqas l-izbilanc biss Lm10 miljuni ghax ghadu jonfoq u ghax il-piz tad-dejn akkumulat qed jieklu.

Allura fejn sejrin` Il-fatt hu li ghandna ekonomija tikber b`mod zbilancjat f`setturi fejn it-tkabbir jiddependi minn cirkustanzi internazzjonlai li jafu jisfaxxaw. Mexjin lejn tbazwir tal-figuri biex dak li hu iswed nghidulu griz jew abjad. Mexjin lejn sitwazzjoni fejn il-gvern ser ikompli jitfa` l-piz fuq il-klassi medja biex isewwi l-hnizrijiet li saru bejn 1992 `1996 u li b`abbuz tal-verita` taparsi jigu attribwiti ghat-22 xahar ta` gvern laburista.

Mexjin lejn sitwazzjoni fejn il-gvern bhal bniedem drogat li ma jridx jiffaccja l-problema vera ser idur ghal privatizzazzjoni mhux biex jilleberalizza u jaghmel l-ekonomija aktar flessibbli u efficjenti izda biex isib il-flus li jwassluh sa l-elezzjoni u r-referendum u mbghad isolvi l-problemi veru minn jigi warajh.

Alfred Mifsud