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

Precedents for Presidents

The Malta Independent

Precedents for Presidents

The` US electoral system was designed to be fair not perfect. When the difference between the contestants for the highest political post in the world comes down to a few hundred posts out of the one hundred million` cast,` than the imperfections become glaring and unacceptable.

How the country that` is leading technological advancements in its many facets can allow the basis of its democracy to be subjected to so many imperfections is a question which still` begs` an answer.

Whilst the debate is still focussed on the regularity and integrity of the Florida vote, the issue is much bigger than Florida.` The only `lucky solution` which could extract the US from this delicate and dangerous situation would be if the mail votes and the recounts` would gives a victory in the Florida State to Gore.` This would give Gore the electoral college majority to couple it with the popular vote majority and become the uncontested legal and legitimate 43rd President of the United States. All other alternatives are fraught with dangerous precedents for the eventual President.

If Gore legally contests the Florida vote, the legal wrangle will definitely spread into other States where the majority is thin. The Courts are generally loathe to interfere with the outcome of the electoral vote and even if they do it is doubtful that the solution would be a re-vote of the particular county or state. The principle of a federal election is for the whole federal state to vote in one shot over a compressed time period` where everyone votes without knowing the voting preferences of other electors so that the individual`s vote is not influenced by the decision of others.

If on the other hand the Florida vote is confirmed and Bush becomes the legal president of the United States with a minority of the popular vote his moral authority to hold the title of the most important political post in the world would be under challenge.

The President of the United States is chosen by American citizens but it influences all else beyond America`s shores. Whilst American citizens seem` willing to accept as their President a person elected in accordance with the imperfections of their constitution but against the majority will of the federal electorate, it is doubtful if the citizens of the world would adopt the same reasoning.

For the rest of the world, it is not important who won the Florida State or who won the State of Oregon. What is important is that the person who symbolises the most democratic society in the world effectively carries the credentials of having passed the litmus test of democracy ` that of carrying the majority support of the federal electorate.

An American President lacking this moral authority could be a threat world prosperity and world peace as America still pretends to behave as the world`s` policeman defending democracy which would be defied on its own home turf.

Unless this matter is determined by a recount of the Florida state, including the mailed votes, which gives a constitutional victory to Gore,` a specifically devised solution to a very specific set of circumstances is called for. This needs the candidates themselves to raise above their own interest and authorise the Congress to anoint an acting president until a new presidential election could be recalled` next year with the electorate being requested to choose simply between Bush and Gore. And the person best qualified for the acting post is the present incumbent who has guided America through the longest prosperous and` stable period giving it` the unquestionable title as the economic and technological leader of the world.

Alfred Mifsud

Kif sejra l-ekonomija(1)

Il-Kullhadd

Fejn Sejra L-Ekonomija`(1)

Huwa mportanti li jkollna nformazzjoni tajba u fil-hin dwar l-andament ta` l-ekonomija.` Filwaqt li l-gvern u l-oppozizzjoni jinterpretaw il-figuri kif jaqblilhom, huwa essenzjali li ssir analizi objettiva ta` kif sejra l-ekonomija.

Huwa zbaljat min jahseb li l-oppozizzjoni jaqblilha li l-ekonomija tmur hazin. L-oppozizzjoni hija l-gvern ta` ghada u meta tkun fil -gvern ferm ahjar li ssib ekonomija b`sahhitha milli l-problemi tal-wahx li sab gvern laburista fl-1996.

Kif tista` tkejjel l-ekonomija M`hemmx kejl wiehed biex dan isir, izda trid tinterpreta diversi indikaturi.` Dawn jinkludu: q











It `tkabbir tak prodott Gross Domestiku (PGD) q











Iz-zieda fl-impjiegi q











Il-bilanc tal-pagamenti ma` pajjizi ohra. q











Ir-rata ta` inflazzjoni q











Il-finanzi tal-gvern inkluz id-dejn pubbliku q











Il-livell ta` nvestiment u tifdil li qed isir fl-ekonomija.

Trid thares lejn dawn kollha biex tifforma ideja tajba u jerga r-rizultat trid taggustah biex tifhem kemm dak li gara sal-lum huwa sostenibbli ghal futur.

Ha nezaminaw x`uhud minn dawn il-fatturi fuq il-figuri ekonomici li hargu s`issa ghas-sena 2000.

Il-PGD fl-ewwel sitt xhur juri ma l-ewwel daqqa t`ghajn` li l-ekonomija kibret bl-istess rata tas-sena l-ohra ta` 4.5%.` izda r-rtimu kien ferm aktar qawwi fl-ewwel kwart milli fit-tieni kwart. Dan l-indikatur kif jista` jorbot mat-tgergir li hawn killumkien li l-kummerc miexi bil-mod wisq Kif tispjega li l-istatistika tghid li s-settur tal-kummerc suppost li kiber b`rata tlett darbiet aktar minn dik tas-sena l-ohra meta hlief tgergir minn ghand tal-hwienet m`hawnx` Kif it-trasport u t-telekomunikazzjoni juri tkabbir sew meta l-Air Malta qed toghtor taht il-piz tal-prezz taz-zejt u nuqqas fit-tkabbir tat-turizmu`

Kull analizi hija mpossibbli meta tiltaqa ma paragrafu bhal dan fir-rapport tal-Bank Centrali li ghadu kif hareg:

`The reported increases in the wholesale and retail and transport and communications sectors` incomes may, however, reflect one-off effects of changes in labour data reporting practices, including statistical adjustments, and the same can be said for the increase in the agricultural and fisheries sector`s contribution to growth`

Din serja ! Alla jbierek hadd ma jispega x`inhuwa dan l-aggustament, x`effett ghandu u ghaliex kien mehtieg. Trid tifhem bejn il-lini li hemm il-loghob bil-figuri.

Settur li tqawwa mhux hazin u li mhux imsemmi li gie effetwat bl-aggustament ta` l-istatistika huwa dak tal-manifattura. Zied fl-ewwel 6 xhur il-produzzjoni bi Lm11 il- miljun fuq l-istess zmien tas-sena l-ohra meta dak in nhar kien naqas bi Lm3 miljuni fuq is-sena ta` qabel.

Ghadhom ma hargux figuri settur b`settur biex tifhem liem setturi tal-manifattura sejrin tajjeb. Izda billi l-industrija tal-manifattura li tahdem ghas-suq lokal zgur mhix tikber nistghu niehdu ideja ta` min qed jikber billi inharsu lejn il-figuri ta` l-esportazzjoni.

Hawn ghandna il-figuri sa Awissu ` 8 xhur tas-sena. Iz-zieda fl-esportazzjoni ta; prodotti manufatturati f`dawn it-tmien xhur kienet ta` Lm148 miljun. Fis-settur tal-makkinarju u elettronika iz-ziedsa kienet ta` Lm150 miljun. Mela iz-zieda kollha kienet f`settur wiehed u s-setturi l-ohra kollha flimkien naqsu.

Is-settur ta` l-elettronika jinkludi fih l-ST Microelectronics li bhalissa ma tistax tlahhaq mad-domanda kbira internazzjonali ghal microchips uzati fit-telekomunikazzjoni. Niehdu gost li l-ST sejra `l quddiem izda ma` niehdux gost li l-kumplament sejjer lura.

Mela kif wiehed irid jemmen li l-ekonomija sejra tajjeb jekk hemm hafna loghob bl-istatistika u l-unika tkabbir qed isir fis-settur ta` l-ST Microelectronics` Min qed ihalli lilu nnifsu jalludi ruhu li ghax l-ST Microelectronics qed tinvesti bil-goff u qed izzid l-esportazzjoni allura kollox sejjer tajjeb qed jidhaq bih innifsu u jipprova jghaddiena biz-zmien.

Il-Gimgha d-diehla nkompli fuq it-turizmu, l-impjiegi u l-finanzi tal-gvern halli jkun spjega f`waqtha fil-gimgha ta` qabel il-budget.

Alfred Mifsud

EU`s Hard Choices

The Malta Independent

EU`s Hard Choices

This week`s annual assessment issued by the EU Commission on the progress made by EU candidate countries lavishes praise on the preparations most countries, Malta included, have made for membership at the forthcoming enlargement.

It has also increased the gap between the rhetoric of the Commission that keeps pressing for early enlargement and the reality of the Council that continues to send negative signals regarding the possibility of fixing a date for the enlargement.

This represents the enlargement dilemma facing EU leaders. The political wish to extend the peace and stability of the 15 member states eastwards to the 10 applicant countries is undoubted. Malta and Cyprus are not real priority for enlargement though from the EU point of view they can get in with the rest to gain strategic footholds in the Mediterranean.` Turkey remains a distant possibility.

But the political objective to get the eastern countries under the EU wing is coming in direct clash with the economic realities of who is going to pay for the cost of enlargement. The Commission, unelected and unaccountable to any electorate, presses on the political argument. The Council, composed of Heads of States sensitive to their popularity among their home electorate to whom they owe their mandate, gets increasingly wary of taking decisions which will continue to detach them from their people.

Hungary, Slovenia, Estonia , Malta and Cyprus could theoretically be ready for membership by 2003 though Cyprus has the territorial issue yet to be resolved. But could there really be an enlargement without Poland, which embodies the main political scope for enlargement from Germany`s viewpoint` And if Poland is to be there who is going to pay for the massive demands Poland would make for funding the restructuring of its agricultural sector`

Popular support for enlargement is dwindling in all EU countries.` It is at its lowest in France at 26%. In Germany it is below the EU average at 34%. Can the leaders of the two main EU states continue to lead the IGC towards its conclusion at Nice in less than 4 weeks in a manner which puts them so much out of touch with the views of electorates in their home states`

The summer uttering of the French and German leaders for a more thorough review of the EU Treaties before enlargement beyond what is on the agenda at Nice cannot be disregarded.

It embodies a stark choice. Should enlargement continue to be driven by an ever more powerful Commission searching `an ever closer union`, despite the suspicion of the citizens who despise the power assumed by a Commission outside their electoral control` Or is enlargement going to be a enlargement of the people through their own elected representatives` An enlargement where the sovereignty of member states is fully respected by effective principles of subsidiarity beyond the lip-service currently given to such principle by the Commission.

As Nice approaches it is becoming increasingly clear that the EU has allowed the Commission to drive the enlargement process in a way which is not acceptable to most citizens of member states.` Heads of states can only disregard this at their peril not least because in many member states the treaties have to be approved by national referenda or by vote sensitive parliamentary assemblies.

The Commission will argue that it is now too late to stop the integrating forces of `an ever closer union`. But the Union must have its foundations built on the consent of its citizens otherwise its institutions built on shallow consent foundations risk toppling.

The EU needs to re-invent itself before it enlarges and this process is unlikely to be finished at Nice. For these reasons it is bad for Malta to uphold unconditional membership as much as it is bad to exclude it definitively before it is possible to judge how much sovereignty the member state will be allowed to preserve under a re-invented EU.

Alfred Mifsud

Logika ta' l-Akwarju

Il-Kullhadd

Logika Ta` L-akwarju

Ma nafx qattx smajtuha ic-cajta tal-logika ta` l-akwarju.` Dan zgur mhux il-lok fejn nirrakonta fid-dettal din ic-cajta ftit qawwija izda l-punch line taghha huwa li wiehed ftit semplici minn mohhu jirraguna li kull min m`ghandux akwarju allura ghandu tendenzi omosesswali. Dan ghax kien hemm wiehed li kellu akwarju u kien straight allura skond il-logika ta` l-akwarju min mghandux akwarju huwa omosesswali.

Din hija logika perversa ghax zgur m`hemm l-ebda rabta kazwali mal- fatt li wiehed ghandu jew m`ghandux akwarju mal- gosti sesswali ta` dak jew dik li tkun.

Izda din il-logika perversa ta` l-akwarju qed tintuza mill-Moviment` IVA Malta fl-Ewropa fid-dikjarazzjoni li dwarha qed jigbor il-firem. U tajjeb li dan is-suggett jigi trattat fid-dettal ghax hawn min ghandu nteress li l-Partit Laburista jurih xi Partit kontra l-Ewropa, partit rigressiv u maghluq fih innifsu meta dan mhux il-kaz.

Il-dikjarazzjoni li ghaliha ta` l-IVA qed jigbru l-firem fiha 12 il-premessa. Min dawn hemm 9 li zgur li m`ghandu jkun hemm l-ebda problema.` Dawn huma:

`













Ghax jien kburi minn pajjizi u mill-wirt tal-gens Malti `













Ghax jien kburi li naqsam bosta valuri ma popli ohra fl-Ewropa `













Ghax jien naf li l-UE twaqqfet fuq principji ta` liberta` u s-solidarjeta li jiena nhaddan ukoll `













Ghax inhoss li pajjizi minn dejjem ta sehem fl-istorja Ewropeja u ghandu jkompli jaghti sehem. `













Ghax l-ghaqda fl-Ewropa, permezz ta` l-UE, hija ghaqda li gabet is-sliem u l-gid fost il-popli Ewropej u tal-Mediterran. `













Ghax jien irrid li wliedi u l-generazzjonijiet tal-futur igawdu minn livell gholi ta` edukazzjoni b`opportunitajiet ta` xoghol ahjar. `













Ghax jien bhala konsumatur naf li bil-ligijiet ewropej, sahhti tigi mharsa u ngawdi minn ghazla, servizz kwalita u prezz ahjar. `













Ghax naqbel li billi nimxu `l quddiem, xorta jehtieg li nuri solidarjeta` ma min ghadu lura, f`pajjizna kif ukoll barra. `













Ghax naqbel li jehtieg li nharsu l-ambjent ghal uliedna u ulied uliedna

Fuq dawn il-punti m`ghandux ikun hemm kontroversja.` Nirrikonoxxu l-gid u l-paci li gabet l-ghaqda ewropeja. Tant m`hemmx kontroversja fuq dawn il-punti li kollha jistghu jeiztu fuq il-mudell ta` Svizzera fil-Mediterran. Dawn il-punti japplikaw ghall-Isvizzera, n-Norvegja u l-Islanda, daqs kemm japplikaw ghal-Germanju Franza u l-Italja.

Ghallhekk hija logika ta` l-akwarju li ghax taqbel fuq dawn il-punti allura tigbed il-konkluzjoni li trid bilfors taqbel li Malta `tissieheb fl-Unjoni ewropeja mill-aktar fis` kif b`mod inkundizjonat irid il-Moviment IVA.

Mela biex nipprotegu l-ambjent, nqawwu l-ligijiet tal-konsumatur, noffru edukazzjoni ahjar hemm bzonn nidhlu membri fl-UE` M`ahniex kapaci niehdu dak li hu tajjeb u jghodd ghalina mil-prattici u ligijiet ta` l-UE u napplikawh ghalina`

Izda `l ilhinn mil-logika ta` l-akwarju hemm tlett premessi ohra fid-dikjarazzjoni ta` l-IVA li min ma jridx li pajjizna b`mod inkundizzjonat jibqa` diehel mill-aktar fis fl-UE ikunu x`ikunu il-konseqgwenzi, irid ikollu bilfors rizervi kbar fuqhom u ghalhekk ma ghandux jiffirma id-dikjarazzjoni kif proposta mill-IVA.

`













Ghax naf li bil-mod kif qed tizviluppa d-dinja l-lum, bil-globalizzazzjoni jehtieg ninghaqad ma` min jista` jghini navvanza u m`hux nibqa` wahdi.

L-ewwel nett fid-dinja hadd ma jibqa wahdu. Anke min mhux memru fl-UE mhux wahdu. L-Isvizzera, n-Norvegja u l-Islanda mhux wahedhom. Ghandhom kummerc reciproku qawwi ma l-UE u ma pajjizi ohra ghax fid-dinja kull ma jmur il-kummerc jinfetah u jaqghu il-barrieri.` Izda x`jigifieri `ninghaqad`. Jekk ninghaqad ifisser li jkolli ftehim ta` kummerc u ko-operazzjoni f`diversi oqsma allura kollox sew. Jekk ninghaqad ifisser nitwahhad allura le.

`













Ghax nemmen li jekk decizjoni se taffetwani, allura jiena u anki pajjizi ghandu jkolli sehem meta tittiehed.

L-ewwel nett ghad ma nafux x`sehem se jkollna fid-decizjonijiet. Izda huwa car li kwalunkwe sehem li se jkollna se jkun zghir u ininfluwenti. Ikollna sehem fid-decizjonijiet jekk bhal ma ghamlu l-Isvizzeri ninnegozjaw arrangament wiesgha u mbaghad dak li niftehmu fuqu jorbot liz-zewg nahat. Jekk naccettaw sitwazzjoni li wara li nkunu ftehma decizjonijiet jinbidlu bil-maggoranza anke jekk Malta ma taqbilx maghhom allura ma jkollna sehem xejn.

`













Ghax naf li ghalkemm shubija hija sfida li trid impenn, ghandi fiducja fija nnifsi u f`pajjizi li din l-isfida neghlibha billi nisfrutta l-opportunatijiet kollha ta` shubija.

L-impenn li ghandu bzonn pajjizna mhux li jaderixxi mar-regoli ta` l-UE. Izda impenn qawwi u genwin biex nimmodernizzaw pajjizna mil-laqghizmu,` klijentelizmu, parrokjalizmu, attitudni ta` x`jimpurtani basta jien ghaddej, li dan il-gvern xettel f`pajjizna. Dan l-impenn qawwi` halli pajjizjna jkun pajjiz civili u tassew deomokratiku tas-seklu wiehed u ghoxrin u hux aktar pajjiz fejn sezzjoni tahseb u ggib ruhha b`mod li donnu ghandha dritt divin li tiggverna. Jekk dan l-impenn naghmluh kif suppost ma ghandniex bzonn l-UE biex tkun il-katalista tal-bidla li hija tant mehtiega.

Bhall-Isvizzeri jien nghid Iva ghall-Ewropa izda le Malta fl-UE.

Alfred Mifsud

Yo`ve got Mail

The Malta Independent

You`ve got Mail

If you happen to be one of those who signed the GWU petition urging the government not to persist in taxing the middle class and depressing their standard of living, then you`ve got mail.

The Prime Minister has taken the trouble to reply directly to your appeal. Quite commendable! You made your case and you have` your reply. There are many instances where this administration can be accused of lax expenditure controls but this is not one of them. I say that once the petition was signed with name address ID number and all,` it was only prudent for the government to reply through its highest representative.

What is not commendable is the content of the reply. It contains untruths, half truths and twisted facts which would be scandalous in a political promotion letter let alone in an official communication by the Prime Minister.

The Prime Minister complains` that on return to power in 1998 his administration found a budget deficit of` Lm150 million. Wait a moment Mr Prime Minister. The election was held on` 5th September 1998. Official Government Finance Data published by Central Office of Statistics` for the period of January to August 1998 shows that the structural budget deficit ( i.e. excluding one-off privatisation revenues ) for the 8 months to August 1998 was Lm73 million.` How in the four months that the Prime Minister was in charge this was ballooned to Lm150 million is nothing short of playing with figures by shifting expenditure and revenue from one year to another.

Comparative figures for the first 8 months of 1999 shows that the deficit increased to Lm87 million and it is only this year that it reduced to Lm62 million but only after extracting from our pockets Lm68 million more than in 1998 by way of Income Tax, VAT, Customs & Excise` and Social Security contributions. Some cheek in criticising the 33 taxes introduced by Alfred Sant. In fiscal measures it is not the quantity but the quality that counts.` `Just 3 measures introduced by the current administration, i.e. national insurance contribution` double increase, flattening of middle income tax bands and VAT on petrol is worth 333 not just 33` of Alfred Sant`s taxes.

The Prime Minister seems to have swallowed the PN`s propaganda about the CET being at 21% rather than 15%. Again this is not even suitable in a party propaganda letter which is often very economic with the truth.` It being carried in an official letter signed by the Prime Minister devalues the esteem which the post should carry. The truth is that whilst VAT applies the 15% on the final consumer price., the CET mechanism, applied different percentages at different stages of the delivery chain but in a way that the amount taxed was generally equivalent to 15% of the final consumer price.` If anything the Labour` system taxed services at 5% rather than VAT`s 15%. And this is not to argue that CET is better than VAT but only to stress that` it is just not true that CET charged consumption at 21% rather than 15%.

As to the increase in employment the Prime Minister needs a brush with the concept of` economic lags. Decisions taken today will have a measurable economic effect after a time lag of several months often several years.` So if employment statistics under a Labour government make poor reading than this ought to be pinned on the last two years of the PN`s administration which terminated its duties in 1996. If the employment statistics now` look good then it is more likely to be Labour government`s merit rather the present administration`s. For the merit or otherwise of the latter we`ll have to see next year and we will have to eliminate artificial employment in government controlled bodies. It is shameful that rather than re-deploy and retrain existent idle resources the public sector continues to take in new employment paid out of hard earned tax money.

Only strong leadership can deliver us from the financial wreckage which in the coming years will continue to be papered over by privatisation revenues.` Instead we get silly propaganda letters which do not move us one millimetre towards finding real solutions.

Alfred Mifsud