24 OCTOBER 2001

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I say what I think and I think what I say

Last Sunday, a consultative meeting was held at the Pheonicia Hotel. The main speaker was Finance minister John Dalli and he explained on his typical eloquent style the state of the economy.

He was no nonsense as usual but he did not waste time on ugly words.

He specified that the expenditure with government stood as follows; salaries, social services, operating costs and capital expenses. He emphasised that the largest segment was related to social security. He reminded the audience that in 1987 the state had forked out Lm70m in social security in 2000 that had gone up to Lm259million.

And he explained: " There are always request for more, but who and from where will it come is never asked."

He underlined that privatisation would take place to remove further pressures on government expenditure.

Turning to references to recession, he said that these were taking place, either to bring real recession.

He added that the persons who were stating this were presumptuous and dangerous.

"Nghid kif nahsibha, kif nahsibha ghax hekk nahsibha."

I say what I think, because what I say is what I think.

And this was followed by his plea that all requests must be followed by solutions.

Mr Dalli said that we all talk of a Government debt but no one refers to the 8,000 employees that were rushed into service in 1987 on the eve of an election.

"This cost the government 700 million liri over a period of 12 years.

And one final reminder on the state of the people’s coffers, Mr Dalli reminded the audience that until that day, the Maltese had Lm412 million in current accounts, Lm650 million in savings accounts and Lm1,400 million in deposit accounts. “Is this a poor country?” he asked.

He did not say the situation lent itself to sitting back and relaxing but he indicated in the clearest of terms that the individuals who had been asked to make a sacrifice would be remembered in the next financial budget.

The onus of responsibility rests on the stockbrokers

Last Tuesday, the Prime Minister’s visit to stock exchange was overshadowed by a landslide of complaints by some stockbrokers.

The press were quick to single out the terse retort by the PM and his finance minister.

The truth is that many stockbrokers have attempted successfully in our view in blaming the government for the drop in the stock exchange.

They are wrong on all counts.

To start with, and we say this with much conviction, many stockbrokers led many of their clients to purchase equities knowing all too well, that the risks were too high.

But worse still, they transgressed the borderline and coerced to lift the prices of various equities to their advantage.

This particular experience has hit many Maltese, who are in some small way shareholders of some of the listed companies.

When Maltese were challenged and tempted to buy exaggerated priced equities, it was not the stockbrokers that issued a warning but the government.

The government warned that the people were being misled. When the inevitable did happen, and the dot.com and techn euphoria the world over was decimated, Maltese shareholders had a taste of the real thing.

When the going got tough, some stockbrokers started to refer their clients to the measures taken by government.

But in reality what they were doing was attempting to deflect public attention from their egotistic profit mongering.

That they took many of their clients for a ride in the dark and have no way of justifying the huge losses made on the stock exchange is never mentioned.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt