Alfred Sant’s discourse in parliament on Monday can be described unimaginative, top-heavy with statistics or possibly run of the mill. But to say it was superficial, as the Prime Minister did soon after Sant’s speech, is being economical with the truth.
Away from the upbeat mood the Prime Minister is trying to display and the song he is playing that Budget 2006 was a ‘no taxes’ exercise in economic management, there is still a lot of explaining to be done on a number of issues.
What Alfred Sant did on Monday was point out a series of inconsistencies in the figures presented by Lawrence Gonzi, the biggest of which is the forecast for next year’s tax revenue, expected to be higher than this year in an economic climate which government is admitting will only produce 1.1 per cent real growth.
Tonight, in his replica to Sant’s speech, Gonzi has to offer an explanation as to how this equation was worked out. Government is insisting the higher tax take will come about as a result of increased economic activity. Part of it will come about as a result of the increase in wages because of the cost of living compensation. But economists do question the logic of expecting substantially higher income from income tax and VAT in a period where growth is expected to hover just above one per cent.
Malta trails terribly behind the new EU member states in economic growth. It is pointless comparing Malta’s economy to that of established member states such as France, Germany and Britain as the budget attempted to do. Sant was right in pointing out that Cyprus, not a former communist country but a small island like us dependent on tourism, would be registering a growth rate of around 3.9 per cent for this year and is prospecting similar growth for 2006.
Unless Malta achieves similar growth rates, it’s going to be a very long road before we can hope of enjoying the ‘better living’ promised by the budget.
Sant rightly pointed out that economic growth registered in the second and third quarter of this year has to be viewed with a fine toothed comb. To start with, the statistics for the third quarter published by the NSO are still provisional and will only be official in December. And secondly, growth is being underpinned by higher than usual inventories, which could be an indication that the country is producing but not being able to sell its produce. This situation could result in bigger problems as the months roll on.
This newspaper had already put a spot light on the issue of inventories around a month ago after the issue was first raised by Alternattiva Demokratika spokesperson for finance Edward Fenech. On Monday, Sant reiterated the concern and tonight the Prime Minister is expected to give an answer, or at least offer his viewpoint on this not so superficial issue.
Lawrence Gonzi still has a lot of explaining to do, not least about the new withholding tax on the sale of property. As time passes it is becoming all the more clear that the measure was half-baked and not thought out properly. In actual fact it has levied a higher tax on property sales and without a package of other measures to help boost the rental market and encourage more property owners to put vacant dwellings on the market, the withholding tax will fail to achieve its intended aim.
Superficiality may best be left for TV programmes but in parliament politicians have a duty to explain the finer details of the things they are talking about. If not out of respect for the people they represent, out of respect of the parliamentary institution which is the country’s highest decision-making body.
But respect is something that has long flown out of the window for this government. There is too much arrogance polluting the air and this was evidenced by Minister Austin Gatt’s remarks to The Independent last Monday when yet again he described the MCESD as a talking shop and went one step further by likening the organisation to parliament.
Parliament may be a place where a lot of talking takes place but it is also the institution where laws are debated, policies are analysed and issues of concern to the public are raised. Denigrating parliament by comparing it to a talking shop betrays Austin Gatt’s and his government’s attitude towards the highest institutions of this country.
Alfred Sant may have taken a step back from offering concrete solutions like he did last year. The suggestion to depreciate the Maltese Lira by 10 per cent had gone down very badly and allowed the Nationalists much political gain. It has turned out that the idea might not have been as bad as it was depicted to be. Similar suggestions came later on this year by various economists who criticised government’s fixed peg to the Euro.
While the opposition’s role as a watchdog on government remains crucial, it is increasingly becoming important for the Labour Party to start dishing out policy documents which outline the roadmap it will take if elected to government.
Being critical of the current administration will not be enough in the eyes of an electorate that wants politicians to offer direction, vision and hope for the future.