Scarce logic and squaring the circle

Maltastar

Scarce logic and squaring the circle

Squaring the circle is the task which the Minister of Finance has to do in presenting the` budget for 2002.` He needs a circle but is locked in a square.

A circle is needed because this could be the last budget before the next election. If not,` it is definitely the one before last.. He has presented three successive budgets which have brought us to a state where we are collectively paying some Lm160 million more` in taxes, levies, fees, licences or whatever one wants to call them than we paid in 1998.

The square is that in spite of squeezing so much out of our pocket causing massive cash-flow problems to the business sector and standard of living problems to the population at large, the budget deficit is still obstinately high and unaddressed, whilst` the quality of health, education and social services we get from government have sharply deteriorated. The edges are too rough to offer much prospect for re-election.

Min John Dalli has no choice but to` play the illusion game. He will tell us that the economy is growing healthily and when everybody knows that it is stagnant and sick if not downright contracting. He will tell that although he will be raising the bottom income-tax bands to give back part of what was taken in the last three budgets, yet his tax take will increase through enforcement on the self-employed particular the professionals through the benchmarking procedures.

He will magically create a number of one-off revenue inputs camouflaged as normal recurring revenues. Strange distribution as dividends of profits accumulated over a long number of years, tax due on artificial property transfers and similar window dressing is all part of the mise-en-scene.

At the other end expenditure will continue to be postponed to accumulate under a future administration and the Treasury Clearance Fund will continue to finance expenditure which sooner or later will have to be funded from the Consolidated Fund.

Meanwhile to generate financial streams to finance the deficit without accumulating more debt, privatisation will be undertaken against all sensible advice to the contrary. The Public Lotto will go without bother about the social and economic problems that will be created by channelling a larger portion of disposal income onto to gaming and gambling at a time when disposable income is falling. MIA will be sold when the price will be heavily discounted due to much lower volume of traffic currently facing the travel` industry.` The Freeport will go against all sensible advice that its privatisation will only make sense after it is brought up and running efficiently. And if Bank of Valletta shares are also sold to a strategic investor we could risk having our entire banking industry controlled by two large foreign institutions to whom the national interest will unavoidably have low priority.

Under the shiny wrapper` with which the government PR machine will package the budget,` there is obscurity and structurally neglected problems which will need` the skills of someone much better than Min Dalli,` the chief engineer of the desperate state we find ourselves in today.

Unless the budget speech starts with a public apology its credibility will be zilch!

Permit me to shift to a case of scarce logic. A policeman was killed during a bank hold-up. It was an accident waiting to happen. It could have been avoided. Don`t just blame Bank Management for it. Management major responsibility lies in choosing a dangerous location for a branch which has been held up at least four times in the space of five years. Responsibility should also be shouldered by the Unions representing bank employees and by the general public.

In 1997 when I was Chairman of Mid-Med Bank I expressed concern at the high level of security cost the bank was incurring to guard its offices when reality the system produced poor security cover. I requested to be given alternatives for installation of a double door system with metal detectors to freeze the doors if metal is detected. I had to abandon the plan as the Union insisted that police guard would still have to be retained even if the double door security system is installed. Branch Operations also expressed concern that the general public would not accept the stricter procedure for gaining access to the Bank and could thus lead to loss of business.`

When last year we were installing my private business financial services office in Valletta, even though the security risk is next to nothing as no cash service is offered, I did not fail to install the double door concept.` I regret not being more forceful on double door installation in 1997.