During a press conference soon after the massive defeat suffered by the Nationalist Party in the European Parliament elections the Prime Minister was asked whether he feels in office but not in power? With a not so confident smile the defeated Prime Minister answered yes, in office and in power.

Of course there is no doubt that the Prime Minister is Lawrence Gonzi and he chose his ministers soon after the electoral result of March 2008 was made official. But today I wish to ask who is leading the office as he said. This emerged clearly soon after the international financial crisis became evident. While other governments, both in Europe and also around the globe, took measures to help the economy in Malta the Prime Minister stood still and did almost nothing. I am saying this since the only evident thing that was done to help in these circumstances was to aide four companies by giving them €3.7m. However it takes more than this to stimulate the economy. The Opposition suggested a mini budget not to increase taxation but to take corrective measures. The Prime Minister always replied that the budget for the current year is enough. However, until now the capital commitments announced in the budget for this year are not enough and results cannot be seen.

Now what about the level of taxation in Malta? The European Union issued a release regarding taxation trends in the 27 member states. From this release it transpires that Malta together with Cyprus had the highest increases and this for year 2007. This means that the high water and electricity tariffs were still at that time not introduced also for political convenience, since the PN in government was well aware that an election was coming in the begining of 2008. It is calculated that from 28.2% the level of taxation arose to 34.7%. By keeping in touch with the people this can be confirmed since purchasing power has been reduced heavily due to taxation and inflation.

So it seems that the Prime Minister is in office to raise taxes but not in power to control as much as possible inflation and to combat the current international crisis. Not only, but his government is contributing to complicate things as was done with the saga of the water and electricity tariffs, where by this decision the government added to the burden. In view of all this, the question is where is all this money going? I am asking this because we have another problem which according to the EU Commission Malta should be in line with the criteria by 2010 - the deficit. Our deficit for last year was 4.7 per cent which means 1.7 per cent above the threshold.

To add insult to injury the Commission also commented that there is no excuse for the 2008 deficit breach. So where is our money going? Now to be in line by 2010 the government needs to increase its income. And once again the question will be: From where is the government going to find the money to bridge the gap? The easy way out, of course, is to increase or introduce new taxes or both. I do not think that this is the best solution in the circumstances. Of course now the PN and its acolytes will expect that the Opposition finds a solution for this mess. And this is very unfair. It was the present government, which for partisan reasons increased the deficit, and now we are in the state we are in. Not only, but even today notwithstanding to what the Opposition and the social partners say, the Prime Minister continues to take measures that are doing more harm to the country and its economy.

I was struck by a comment from Lawrence Zammit who is well known to be very close to the PN. He said that the country needed to take a collective decision to tackle tax evasion and curb abuse of government services, which would mean sounder public finances without the need to raise taxes. Very well said from an expert point of view. But of course, Mr Zammit will allow me to say that he is also a political animal since he forms part of the strategic group of the PN which is very much at the core of the Party in government. Apart from the fact that the current administration never consulted the Opposition about how to spend and use this money how can he expect that the Opposition will be part of the solution when we are in this situation after more than 20 years of Nationalist government?

I add that the government itself perpetrated abuse and we all should know by now what happened before the last general election. But one final comment that I would like to share with you is regarding tax evasion. Of course we all need to combat this and I remember that some years ago a Tax Compliance Unit was set-up to curb tax evasion. Can anyone tell us what happened since the setting-up of this unit please?

Carmelo Abela is the Deputy Speaker &

Labour main spokesperson for industry and foreign investment

Email: [email protected]