Missed opportunities

The past year has been one of missed opportunities. Admittedly in 2009 we like the rest of the world faced serious challenges as a result of the global recession the intensity of which was unprecedented in the last seventy years. But the acid test of good political leadership happens in times of difficulties.

The management of public finances has once again been a big disappointment. In the first eleven months of the past year the fiscal deficit went up to € 410 million or € 140 million more than in the same period in 2008. It is not the size of the deficit that is worrying economic analysts, but the fact that the government has little to show for this excessive expenditure.

Had productive public investment increased significantly than one would have had less reason to be concerned. Just look at the state of our roads, our water and electricity distribution, and the quality of the infrastructure that supports our tourism industry. We have barely started to address the issues that are making us uncompetitive.

The government’s argument that fiscal rectitude had to be sacrificed to save jobs is hardly credible. The amount of money that went in the worthwhile scheme to support manufacturing companies in distress is miniscule and it surely does not explain the collapse in the management of public finances.

The reality is that there is still insufficient commitment to address the issues of corruption, mismanagement, incompetence and tax evasion in our public governance. The issue of the power station, the long lasting endemic fraudulent practices in the VAT department and the gross mismanagement and abuse of public funds revealed by the Auditor General’s annual report are just a few examples that prove that the government is losing the battle against the misuse of public funds.

The measures outlined in the 2010 budget to help small enterprises are all welcome, but they will little difference in the creation of jobs. The public mood is at the worst it has been for many years, and just a few weeks after the budget was announced people are feeling that there is not much to look forward to in the New Year.

The confidence building measures have been glaring by their absence from the Minister of Finance’s budget speech. No wonder there is turmoil amongst the government’s backbenches. Opportunities were missed to give a boost to the tourism industry by reducing the VAT for a limited period of time to stimulate some local demand in services that have a high local value added.

The increase in the water and electricity tariffs is once tying a heavy cannon ball to the feet of both small and large business as well as to thousands of households. The stubbornness of the government to ignore the social partners and push ahead with anti-business measures will no doubt bring about even more hardships to local business and the workers they employ. The government ministers seem to have adopted a siege mentality and they are defending themselves against all criticism coming from various quarters by pushing ahead with measures that will bring even more main to our stagnant economy.

The recent Eurobaromiter survey on the mood of the Maltese people  about the economy, as well as the survey on the perception of the Maltese on the existence of corruption in our public life, show that it is not just the Labour Party that is stating that all is not well in the governance of this country.

We must make the year 2010 the year of a return to steady economic growth to catch up with the living standards of the more advanced EU countries. We must make this year the year of jobs creation after having lost thousands of jobs in manufacturing and tourism during 2009. We must make this new year the year where the attainment of quality standards becomes the hallmark of our educational system.

To achieve all this we cannot afford any more missed opportunities as a result of corruption, incompetence and mismanagement in the governance of this country.

Dr Charles Mangion

Shadow Minister Finance .

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