I find it ridiculous the way that Franco Debono and the Labour Party discuss the current atmosphere of uncertainty and lack of investment as though it has nothing to do with them and the government is to blame. It is not Franco Debono’s actions in themselves which are causing people to hold back from decisions and walk about on eggshells when it comes to spending money. It is not the Labour Party’s capitalising on his behaviour in itself which has led to business tension and to reluctance to invest.
No, it is the fact that Franco Debono’s actions and Labour’s abusive response will give us a Labour government ahead of schedule. And again, it is not the certainty of a Labour government that is causing investors to falter. It is the fact that we have no idea what that Labour government plans to do, because it hasn’t told us yet, even though we’re right up against it.
The Labour Party is pushing the message that investors are uncertain because the government doesn’t know whether it has a parliamentary majority. But why would investors be worried about something like that, if not because the absence of a parliamentary majority for the Nationalist Party might lead to a Labour government? Investors don’t care about the ins and outs of parliamentary majorities for the hell of it. They are not political columnists or party activists. It is only the consequences which concern them. If those consequences are a general election, again it is not the general election in itself which bothers investors. It is the consequences.
They’re not worried about the consequences being another Nationalist government, because it’s what they’ve got already and they know where they stand with it, what its policies and modus operandi are. The cause of worry is change to another sort of government with unknown policies (or worse, none to speak of) and with an undefined way of doing things. Because this is shaping up to be a certainty, rather than a possibility, people have stopped spending money and taking decisions until they know for sure whether they want to spend that money or take those decisions with Labour in power.
To cut to the chase, it is the certainty of a Labour government that is causing uncertainty among investors.
The finance minister said in a debate with Labour shadow minister Charles Mangion a few days ago that investors are afraid that Labour will win the general election. He’s right. He was wrong to take that trip on a private plane to see a football match, but boy, is he ever right about this one. When people in business say they’re not taking a decision on this or that initiative now because they’d like to wait until the outcome of the general election, what they mean is that if Labour wins the scenario will change and they so need to know what Labour plans to do.
As the finance minister said when Charles Mangion went on about parliamentary majorities, Franco Debono’s actions in themselves are irrelevant to investors. But while those investors know what the Nationalist Party’s policies are and how it approaches situations and issues, they have no idea about the Labour Party.
Four years after Joseph Muscat was elected party leader, Labour remains an unknown quantity with a new logo, a blue background, slogans shamelessly cribbed from the Nationalist Party, and blue ties. It is like a ‘Made in Taiwan’ Nationalist knock-off, but the attempts at faking the Nationalist Party only make investors (and the rest of us) even more worried about the real possibility that within days of our starting to use it as a government, the knobs and handles will fall off and it will begin to spin erratically and make loud whining noises.
If Labour were only to reveal how it plans to cut down on the price of energy invoiced to the consumer, while also reducing the deficit, the finance minister said, there would be less uncertainty among investors. But because Labour has made smaller energy bills one of its electoral carrots, without explaining how it will perform the magic trick, investors are fearful that a Labour government will roll out new taxes or increase existing ones, that they will save on the swings but end up spending more on the roundabouts.
You can’t blame them for worrying. Sixteen years isn’t that long a time in an investor’s memory, and some of them are still smarting from the painful and costly business of shifting from VAT to CET, only to have to shift back again.
All Labour has to do to dispel the uncertainty is make its plans known. By keeping those plans secret, it magnifies the problem tenfold. People begin to worry not only about what Labour might be planning, but they will also begin to imagine that those plans are dreadful indeed if Labour thinks that revealing them will cause us to vote to keep them out of power. At the other extreme, we worry that Labour has no plans at all and will spend the next five years floundering about and making trouble for itself and the rest of us.
So speak up, Joseph, and clear up the uncertainty once and for all. Oh, and use a teleprompter if you really must.
www.daphnecaruanagalizia.com