As we approach the next round of local council elections on 11 March, I could not help harking back to the public lament by the late Nationalist Minister of Justice, Dr Joe Fenech, when his party suffered a reverse at the local council elections in 2001.
Writing in The Sunday Times of 1 April 2001, he said, without hesitation, that the electoral results achieved “should be an eye opener and serve as a serious warning to the PN leadership.” And he added: “It is time for deep insight and reflection. It is time for the party to strip its soul bare, look at the mirror and objectively analyse itself, its workings, its human failures, its administrative failures, the whys and the wherefores for this defeat, just 30 months after an election triumph.”
Dr Fenech took it upon himself to identify “some of the failures” and declared that ministers lacked dynamism. He was even more specific when he said that “several ministers became complacent, took power for granted and some, at times, sounded arrogant. The administration started to be slipshod and began to be influenced by inexperienced people, who may have also been motivated by self-interest”.
He added some spice. “Lethargy, delays, lack of effective and quick decisions, administrative disarray, inefficiency and lack of discipline have all contributed to the present economic slowdown, if not stagnation.”
Electoral perception
In various quarters, there is the perception that since then, inertia, inefficiency and broken promises have aggravated the plight of the ruling administration. Nothing seems to have changed. But, to my mind, the core issue that is the cause of present-day dissatisfaction relates to weak leadership and bad economic management.
The groundswell of disenchantment is clearly noticeable from the laments of various constituted bodies.
With the change in the PN leadership, Dr Gonzi had an opportunity to introduce new blood and to opt for a party shake up. He opted for more of the same.
The internal affairs of the Nationalist Party are party issues. The state of the economy and the nation’s finances are another matter altogether.
The electorate, of whatever political hue, has a stake in its own survival. There is widespread and growing concern on the spiralling cost of government, the level of taxation, mounting national debt and the general issue of job security as more firms fold up or retrench. These are the topics that swing the political pendulum.
Objective observers of the local scene have enough documentary and statistical evidence at hand to show that a “money no problem” philosophy has been largely responsible for the persistent fiscal deficit and the rising debt burden. Individual taxpayers have gone beyond watching the government’s poor performance. They had to bear the brunt of escalating public expenditure and a steady rise in taxation that has literally set them back.
The heart of the matter
What is more galling is the fact that as workers and consumers, they are suffering a steady erosion of their take-home earnings, while widespread tax evasion and benefit fraud have not been effectively controlled. It is not enough that the broth was spoilt in the cooking. When ladled out, it is not being shared fairly yet.
It is no wonder that the electorate is reacting. This is the heart of the matter. It bears deep reflection.
I recall the present Governor of the Central Bank, barely a month after taking up his post in late 1990, surveying the local scene, and making reference to “the attitudes and practices which had developed over the last few decades” and targeting, in particular, government consumption, then accounting for 20 per cent of GDP, and other consumption-led growth. He also spoke on the need to encourage savings.
Later still, in April 2001, he protested that “we have been living beyond our means” for several years.
These concerns were by no means the first of their kind. They were significant because they came from official quarters. The writing on the wall was clearly legible to a number of commentators who sounded the alert in the local media when that twin-headed monster – the budget deficit and the mounting national debt – reared its ugly head in the mid 1990s.
That situation presented the government of the day with two problems. On the one hand, the arena of public finance had to be sanitized. On the other, the government was expected to bring social justice into the equation.
The situation now being what it is, there is no running away from the fact that medicine has to be administered to the economy. Because there has been delay in treating the patient, surgery may even be inevitable. It is an unpleasant imperative no matter what happens to the government.
At this moment in time, it may be considered as poetic justice that the same government, which failed to administer its own self-set prescription since l992, should now have to make up for its own inadequacies.
Poetic justice
But poetic justice has no place in real politics. Real politics demand that the rate of public spending is effectively controlled. Investment, productivity and output have to be incentivised. Revenue collection has to be efficient and tax evasion stamped out.
On all these fronts, progress has been, at best, perfunctory for far too long.
I have no sympathy for businessmen who have wallowed in tax evasion for donkey’s years and now complain that businesslike demands from the Inland Revenue department will cause a cash crisis.
Neither could one have any qualms of conscience on hearing the screams of a few professionals, plumbers and electricians who will have to prove that their rate of earnings is below a reasonable norm – so long as that norm is demonstrably reasonable.
The clear and real concern arises from the fact that, in the craze to step up revenue, the government has lost its bearings as well as its sense of proportion. It has, by way of blatant example, precipitated rises in the cost of bread, public and air transport, the cost of fuel and, to cap it all, a sudden, hefty surcharge has been imposed on water and electricity bills. It never crossed the government’s mind to tax, for example, extravagant and ostentatious expenditure like newly built sumptuous villas, luxury yachts, expensive, high-powered cars, and designer jewellery.
This is standard practice in democratic systems that profess and practise social justice of the kind, which ensures tax burdens are borne in equitable proportions.
Incidentally, besides harvesting some extra revenue from sources that could afford to pay, to the extent that such a measure would restrain ostentatious expenditure, it would, in equal proportion, have a salutary effect on our balance of payments.
Galloping taxation, without anything in return, has set back a sizable chunk of the electorate, which has been squeezed relentlessly, while the fat cats continue to have fun.
There are many who anticipate this as a core issue at the next round of local elections. In the electoral forum, there is an air of injured righteousness, which may well turn out to be inflammable in the voting booth.
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