Budget Anticipations

The Malta Independent

Budget Anticipations

Is this just a strange country or have the strategists of the political parties completely lost their balance`

In the run up to the presentation of the Public Budget for the year 2001, which would in normal circumstances take place within the next month or so, we are seeing both political parties adopting untypical positions.

The Opposition would normally be raising people`s expectations about what to expect from the budget especially once government spokesman keep stressing that the economy is registering substantial growth and all macro-economic targets are being met.` Raising people`s expectations would than leave a political dividend` when the actual budget measures are announced which cannot but take account of the still precarious position of public finances.

Instead the Opposition keeps conditioning people to expect further unpopular taxes from next budget as government has to continue turning the screw to fall within its medium term financial strategy and in order to finance the additional expenditure emanating from the maturing payments under the collective agreement for public employees. This is politically unwise` as actual measures, though hard, could be made to seem gentler by people who were positioned by the Opposition to expect something worse.

The Government on the other hand would normally be working to keep a lid on people`s expectations in this mid-term budget.` This is normally the time for unpopular measures to be taken reserving the goodies for the last couple of budgets before the` election.

Yet the Finance Minister seems to have made it his mission to inform one and all that the economy is moving just fine, that the public deficit` is coming down faster than anticipated and that his magic formula is generating economic growth in spite of the fact that at the micro level domestic oriented businesses are financially squeezed between` reducing demand and jammed cash-flow.` On the other hand export-oriented business is probably performing well but this is more the result of buoyant economic growth in trading partner countries rather than the magic wand which economic managers tend to take credit for.

Against this background the budget minister, as if in the throes of an election campaign, has assured us that income tax rates and` petrol prices will not be increased.

This was made to sound like manna from heaven for which we should be thankful to proficiency of our government in general and the minister in particular.

Yet increases in direct personal tax rates should not be` on the national agenda. Not even a Labour Government that inherited a financial mess found it opportune to upset the consensus about income tax rates being capped at 35%. Last budget contained the unsocial measures of flattening the tax bands to increase the tax` impact on middle income families and therefore the government has little room to manoeuvre in this area.

The price of petrol was increased in three out of the last four budgets and if the consumer is to be protected from further increases and Enemalta shielded from direct losses, nothing short of reduction of excise tax or VAT on petrol will deliver the goods.

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`

Alfred Mifsud

Letter to the Editor - Reply to Wide Angle

The Sunday Times of Malta



Editor, The Sunday Times, Valletta

Dear Mr Grech,

Last Sunday`s Wide Angle contained an untruth about me which coming from the pen of someone as experienced as Lino Spiteri can hardly pass as a slip.

He stated

Konsensus basta tghaddi tieghu!

Il-Kullhadd

Konsensus ` basta tghaddi tieghu

Fi zmien ftit jiem` kellna zewg provi bil-fatti ta` kemm il-gvern nazzjonalista jew tilef rasu jew tant hemm tahwid fit-tmexxija li intilef kull sens ta` direzzjoni.

Jekk hemm xi haga li ghandu bzonn il-pajjiz hija li jigi mfittex konsensus kemm jista` jkun wiesgha fuq it-tibdil ekonomiku li hemm bzonn isir biex nimmordernizzaw u ma naqghux lura ma pajjizi ohra.

Filwaqt li hemm hafna affarijiet li m`hemmx qbil dwarhom u allura difficli li jinkiseb konsensus, hemm affarijiet ohra fejn jezisti qbil u allura jehtieg li dan il-qbil jigi konsolidat fi ftehim li jwassal ghal pjan ta` azzjoni.

L-aktar li ghandu dover li jfittex dan il-konsensus huwa l-gvern. Minkejja l-poter kollu li ghandu l-gvern xorta jista` jkun hafna aktar effettiv jekk fid-decizjonijiet` li jiehu` ifittex appogg wiesgha.` Appogg mil-Unions, appogg minn minn ihaddem u mhux lanqas appogg mill-oppozizzjoni li hija gvern alternattiv.

Minkejja impressjonijiet kuntrarji kien hemm diversi kazi fejn l-oppozizzjoni laburista tat konsensus lil gvern nazzjonalista fuq materji ta` natura nazzjonali. L-aktar ezempju li huwa car huwa fil-kaz tal-ligijiet tas-servizzi finanzjarji` li fl-1994 ghaddew mill-parlament bl-appogg ta` l-oppozizzjoni.` Dan il-fattur ta spinta lis-settur finanzjarju ghax il-barranin kienu attirati mill-istabbilita` li joffri konsensus biex ma jkunx hemm thezziz bla bzonn kull darba li tinbidel l-amministrazzjoni fi process demokratiku.

L-istess jista` jinghad ghas-settur turistiku. Dejjem kien hemm certu konsensus biex dan is-settur tant importanti jigi msahhah mill-istabbilita` tal-konsensus. Nista` nghid li proprju din is-sena stess il-mezzi tax-xandir tal-partit laburista, specifikamnet, Super One TV, kkopera ma l-Awtorita` tat-Turizmu biex xandarna bla hlas reklami biex jitheggeg l-gharfien fost il-poplu ta` kemm huwa importanti dan is-settur u kemm kull wiehed minnha irid jghin biex nipproteguh.

F`din il-legizlatura, minhabba dak li gara fl-1998 il-gvern isib izjed diffikulta` biex jakkwista il-kunsens ta` l-oppozizzjoni. Wiehed ma jridx jinsa li oppozizzjoni nazzjonalista wriet opportunizmu sfrenat meta fis-sajf ta` l-1998 ivvotat sahansitra kontra ligi tat-turizmu li dwarha kienet diga` esprimet konsensus fit-tradizzjoni li dan is-settur ikun kemm jista` jkun protett mill-pika politika.

Allura wiehed jifhem li wara esperjenza bhal din ikun ferm difficli li l-oppozizzjoni laburista tati xi konsensus fuq xi haga lil gvern wara l-mod opportunist li gabet ruhha l-oppozizzjoni nazzjonalista li ftahret permezz tas-segretarju generali taghha li waqqghu gvern elett mil-poplu.

Li jfisser li l-gvern, li xorta ghandu bzonn konsensus biex ikun effettiv, irid jaghmel sforz akbar biex jakkwista dan il-konsensus u jaghmel xi koncessjonijiet li mhux normali li jaghmel.

Izda qed jigri bil-maqlub. Il-Gvern taparsi ifittex konsensus mill-oppozizzjoni fuq materji li fuqhom hemm divizjoni ta` principju. Bhal fil-kaz tas-shubija fl-Unjoni Ewropeja. `Meta tkaza li l-oppozizzjoni mhux lesta tikkopera beda kampanja sistematika biex ikabbar l-istorja tat-tbaghbis tal-voti biex jiddestabilizza lil Leader Alfred Sant.` Tant telghalhom ghal rashom il-poter li hasbu li sahansitra ghandhom id-dritt li jaghzlu huma min imexxi l-Partit Laburista halli jkun possibbli li jiehdu l-konsensus li ghandhom bzonn fuq l-UE.

Meta gew ghas-si u no fuq konsensus iehor hareg il-veru karattru ta` kemm in-nazzjonailista iridu konvenjenza mhux konsensus.

L-ewwel kien hemm il-kaz tal-konfini elettorali tad-distretti. B`gest zghir il-gvern seta` accetta il-porposta ta` l-oppozizzjoni li jibghat ir-rapport lura lill-Kummissjoni Elettorali biex tirrevedih. Imqar ghal kirjanza ghax xorta il-gvern huwa car li qed jiddetta lil din il-Kummissjoni li fuqha ghandu l-maggoranza tan-nomini.

Imbaghad fuq il-kwistjoni ta` l-Agent President, materja simbolika li zgur ma` kienet tiswa xejn lil gvern li jaccetta l-proposta ta` l-oppozizzjoni.` Izda anke fuq materja daqstant insinjifikanti mhux biss il-gvern ifittex konfront izda jkompli jiggustifika dak li mhux gustifikat permezz ta` l-esponent ewlieni tieghu li joffri skuzi li lanqas jghoddu fid-dinja tat-tfal ahseb w` ara fis-serjeta` tal-politika.

X`inhu jwassal biex il-gvern nazzjonalista jaddotta policies daqshekk irrazzjonali` L-unika spjega hija li fil-partit nazzjonalista, wara l-faccata ta` ghaqda, qed tikkarga glieda nsensata ghall-poter bil-Prim Ministru jhoss ruhu taht attakk, u b`kontendenti ewlenin diga jarmaw it-truppi ghal-battalja li gejja. F`dan l-ambjent kullhadd jilghabha tal-qawwi u tal-bully u jfittex konsenus basta tghaddi tieghu!

Alfred Mifsud