Comic Tragedy

The Malta Independent



Nothing else describes what`s going on in Malta at the moment.` The economy is stalling, tourism is having a very bad summer, in terms of value added if not in terms of visiting head count,` cash flow is just not flowing, investment and re-structuring are just not happening, and government finances are sharply deteriorating through higher expenditure in spite of extracting more taxes out of the economy.

And yet what make the headlines is whether my clear views on the VAT issue are meant to undermine Labour leadership rather than to help forming` policy in an area where currently there is none ( in the October 2001 official economic policy document Labour declared that it would pronounce itself on VAT prior to next elections).

`Anyone who can read figures of government finances for the first 5 months and who is willing to make an objective assessment of trends and progress, cannot but reach the conclusion that the end is not too far`



The media is scandalised to the point of inventing admonishments for my daring to speak my mind about a vacuum area of the Party policy. Yet they are not in the least scandalised by a string of much more serious outright untruths (just to avoid using a harsher but shorter three letter word) uttered by the Minister of Finance in the same TV debate.

Let me number these untruths to justify my calling them a string.

Firstly he said that the government had already secured a deal with the EU, permitting us to continue buying basic commodities (sugar was specifically referred to) at cheap international prices rather than at high internal EU prices. MIC had to explain a few days later that no such agreement exists and that negotiations are, at best, still proceeding.

Secondly the Minister said that government finances are broadly in line with the budgetary projections` for 2002 when officials figures show that the deficit for the first five months was more than double what it was two years ago and` when the full year`s deficit is planned to be substantially lower than` it was 2 years ago.

Thirdly he said that it was professionalism that made him include a 6% risk premium to top up discount factor to 12%, on top of the 6% risk-free rate, at which future earnings of Mid-Med were discounted to arrive at the price at which the bank was sold to HSBC.` This inclusion effectively halved the price at which Mid-Med was sold and could only be considered professional if the Minister was protecting the interest of the buyer not the interest of the seller (the Maltese nation and its tax-payers).

`That`s where the comedy will stop.` The` tragedy` unfortunately will remain`



Fourthly he said that retirement process from the public sector is so slow that the 8000 extra persons engaged by Labour before 1987 have not yet been re-cycled into proper jobs 15 years later.

Being forced to such a string of untruths can only mean that government has lost all control of the situation and cannot properly defend itself from pointed criticism. It is for this reason that the PN, with the assistance of their media allies, are trying to kill the messenger to ensure that the message does not get through.

But the message will get through. Anyone who can read figures of government finances for the first 5 months and who is willing to make an objective assessment of trends and progress, cannot but reach the conclusion that the end is not too far. That`s where the comedy will stop.` The` tragedy` unfortunately will remain.