Setting aside the bickering and recriminations of politicians, one undeniable fact stands out as the Maltese electorate approaches the next general election. The electorate feels the pinch of high taxation. There is widespread hunger and thirst for relief. There is a growing realisation that, in the absence of lateral thinking, it is next to impossible to get rid of the yoke of high taxation. More than anything else, it is this feeling which motivates the desire for change.

That something has to be done is obvious. The urgency of the problem and the magnitude of the challenge are befogged by partisan controversy – but the bare facts of the argument are not difficult to outline.

Money-no-problem star

The incumbent Nationalist administration has been in office for the best part of 20 years. During this period, the government took several initiatives to liberalise and kick-start the economy. In so doing, it navigated by the “money-no-problem” star.

The overriding political objective was to create a “feel-good” atmosphere. This policy was sustained by a spending spree, and nourished by public debt. Suffice it to say that public debt rose from Lm62 million in l986 to Lm1,364 million at last count.

The government was awash in funds but millions were frittered away in freak initiatives like the purchase of Avro Jet aircraft and the setting up of AzzurrAir, like the Brindisi Project, and like the white elephant that now goes by the name of Mater Dei Hospital.

When Malta acceded to the European Union, the government was brought to its senses by Brussels and induced to launch a convergence programme, which ushered in a period of austerity and triggered new tax burdens.

Public debt costs

It is these burdens which make life difficult for thousands of families who have been seriously set back and which threaten to break the back of the Maltese economic camel.

When Dr Gonzi presented this year’s estimate, he laid on the Table of the House a Budget Office document that estimated the public debt at the end of 2006 at Lml,350 million. This exacted a servicing cost amounting to Lm77.7 million.

This rate of interest is a yearly charge. It has to come out of taxation and is payable until the debt is redeemed. It is a massive sum that has to be put aside at the beginning of each financial year, before the government begins to provide for the cost of the full range of government obligations.

Hypothecated surcharge

As such, it is a hypothecated surcharge imposed on all of us to make good for past follies.

It is a much stiffer burden than the water and electricity surcharge. It has no name and it is faceless. But it is indiscriminate and soaks Malta’s scarce resources remorselessly as the Exchequer thinks fit, in order to meet its commitments.

The government is thus in a straightjacket. It is a prisoner of its own folly – but it is the taxpaying community that pays the price

That’s why lateral thinking is of the essence if the electorate is ever to sort out this conundrum.

[email protected]