The Malta Independent 16 July 2020, Thursday

7 vs 7

Ivan Bartolo Tuesday, 2 June 2020, 07:15 Last update: about 2 months ago

No, it’s not the score of a waterpolo game or a set result of a tennis game. It is the seven years of prosperity against the seven lean years. This statement has been alive since the old testament, namely in the story of Joseph and his multi-coloured coat. History repeats itself.

Why am I saying this? I am surely not a prophet of doom, but all indications are that Malta will be passing through a lean period. The main contributor is the current COVID-19 situation, but the Government that steamrolled over everyone, bragged about full employment and surplus, and economic growth and wealth, has showed how vulnerable the finances were.

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During the past seven years, mostly under the premiership of lucky Prime Minister Joseph Muscat, it was alleged that the economy flourished.  Why did I say that was lucky? Because he found a strong economic base, as was confirmed in Parliament by Minister Scicluna in the previous legislature. There were also the €1.2 billion obtained from the EU by former Nationalist Prime Minister Lawrence Gonzi.

Yet, with the tide in his favour, the economy was based on the selling of passports and construction mushrooming all over the island. This goes to show that the economic growth was based on watery ground. No new industry was introduced and the foreign investment, if one can call it such, was that related to energy. It was because of the circumstances that economic growth prospered.

Now that there is a new Prime Minister who promised continuity, the economy is being exposed for what it is by COVID-19. Foreigners cannot travel to Malta as the airport and ports are closed, and the main source of income - the sale of passports - ground to a halt as entry to Malta is forbidden. It was recently reported in one of the media portals that over 6,200 foreigners working in Malta, and who the lucky Prime Minister stated were contributors to the economy and full employment, have had to leave. What are the consequences? The government hasn’t yet paid yet all the benefits it committed to pay compensation for loss of income. The poor are becoming increasingly poorer.

This happened because, instead of saving for a rainy day during the seven years of prosperity, the Government decided to squander the money amongst the very chosen few. The wealthy became wealthier and the poor became poorer. I mentioned several times that there are close to 90,000 people at direct risk of poverty. Did the Government address this? No, it did not. Did the surplus trickle down to those in need? Not at all.

What is the solution in the Government’s eyes? Increased taxes? That will be highly irresponsible as they should have budgeted better and saved money rather than milk the economy dry. If the Government resorts to an increase in taxes, the poor will be hit hard. This is a lack of forecasting and planning. Is the Government planning long-term? Is it planning seven lean years?

I really hope that we would not have to brace ourselves for the seven lean years, but the prospects are not that appealing, and the misdeeds and bad planning should not be blamed on COVID-19.

 

 

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