Yes we can

The Malta Independent



It is healthy and appropriate that the media demands of the party in opposition, as an alternative government, elaboration and quantification of their economic plan to get this country out of the financial chaos that it got into.

What`s not fair and proper is the lightness with which the media lets the government get away for bringing us to the present sorry state.

The NSO figures for public finance for the 6 months to June 2002 show a 6 month deficit of Lm78 million. The mid-point is always a good stage to evaluate how well we are doing in achieving final objectives.` The Minister of Finance says we should not worry as in the second half of the year he will wave the magic wand and balance the budget so that the full year`s deficit plan of Lm77 million will be reached. `This time round the government should be ten times more worried. Yet, we have not come to the first stage of problem solving ` the stage where we admit we have a problem.`

Any serious media would challenge these assertions.` In 1996 when the PN government was roughly at the same point as we are now in the legislature, the 6 month deficit amounted to Lm60 million compared to a full year projection of Lm32 million.` The comparative figure for the 2002 deficit is not quite Lm78 million but Lm84 million as the Lm6 million contribution to sinking fund has to be taken into account to make a like for like comparison with 1996.

Government ordinary revenue for the first 6months increased by Lm101 million since 1996.` How can any serious government that expects us to believe that all in under control, not only spend its way through Lm101 million more taxes in 6months,` but increases the deficit by Lm24 million. This is a stark deterioration of Lm125 million for a 6-month period compared to six years ago.

Six years ago the financial position worried the government so much that it hurried to an early election before it had to let the cat out of the bag when presenting the 1997 budget. This time round the government should be ten times more worried. Yet, we have not come to the first stage of problem solving ` the stage where we admit we have a problem. `Yes we can do it ` but not with a government covered so much in guilt of mismanagement that it cannot even find the courage to admit the existence of the problem!`

We have a government that in the face of hard facts and figures pointing to a` grave risk of imploding financial system, still wants us to believe that all is according to plan and everything is under control.` Obviously we will see some Enron practice in the second half of the year where one-off revenues are invented out of thin air and taken as ordinary revenue. But accounting window-dressing does not offer real solutions.` It only helps to disguise the problem which keeps ticking on unrelentingly.

A turnaround plan necessarily has to be a tripod plan standing on three legs.` A leg of economic growth stimulated by judicious investments and tax incentives. A leg of increased revenues sourced from economic growth and enforcement of existing fiscal laws and not by any material widening of the tax base. And a leg of cost control to reduce government expenditure through more efficient management of resources.

No government can do this on its own. It has to capture the heart and mind of the electorate and of the social partners convincing them that the action plan is worth pursuing in the spirit of compromise and achievement. Yes we can do it ` but not with a government covered so much in guilt of mismanagement that it cannot even find the courage to admit the existence of the problem!

Alfred Mifsud