The Malta Independent 5 March 2024, Tuesday
View E-Paper

A debt foretold

Kevin Cassar Sunday, 3 December 2023, 08:22 Last update: about 4 months ago

Labour was stunned. Barely one year after Abela’s landslide victory the polls showed that PN was ahead.  A 39,474 vote lead had been squandered. Labour found itself at a 5,000 vote disadvantage. Panic buttons duly activated, Labour went on the offensive. It had to act fast to reclaim its lead.  Abela did what Abela does best. He borrowed more millions to throw at the nation.  In a massive media publicity campaign Abela launched his blitzkrieg called Malta Gusta. And boy did it work? The latest survey shows Labour is back on top - with a 9,000 vote lead.  Not quite the 39,474 he had in March 2022, but better than 5,000 down.

There’s a lesson for Labour and a warning for the nation. If any evidence were needed to show how easily Maltese voters can be bought the latest survey surely provides it. Robert Abela quietly chuckles to himself. He knows that as long as he retains power he can borrow as much money as he needs to buy victory. In just four years Robert Abela has single handedly increased the national debt from €6.4 billion to nearly €10 billion. He knows he won’t be paying that money back. He’s not the one forking out the rapidly rising interest payments on that debt. That will be the taxpayer.

The sad irony is that Robert Abela buys his support by imposing greater and greater burdens on the people. Interest payments alone have risen from €174 million in 2022 to €209 million in 2023 and will rise to 270 million in 2024. By 2024 we’ll be paying 739,726 euro every single day in interest payments alone.  Can you imagine what we could do with that amount of money every single day? Those interests are expected to rise steeply from 1.1% now to 1.5% in 2026.

Does anybody remember Labour bragging about surplus? Of course not.  Government deficit has now reached unprecedented levels. Malta’s deficit for the past two years has been amongst the highest in the euro zone. In 2022 the deficit reached an eye watering €982.2 million.  That’s almost €1 billion. Our neighbours Cyprus recorded a surplus in 2022 and 2023 and are expected to do the same in 2024. They’re also affected by the war in Ukraine. They’re also affected by the war in the Middle East. If anything they’re far closer to those tragedies. But Cyprus isn’t led by crooks whose priority is to maintain power at all costs.  Cyprus isn’t led by a cabal that needs to retain power to evade prosecution. Cyprus isn’t led by a party that must retain control in order to shield its former leader from justice.

Nobody in the history of this country has inflicted more debt on the population than Robert Abela.  Single handedly and in just three years he has added almost 4 billion euro of debt and rising. Malta’s debt to GDP ratio is steadily increasing - from 53.4% in 2022 to 57.2% in 2024.   That figure is based on a very optimistic government prediction that the country’s real growth rate will be around 4%.  If that figure is closer to 3% Malta will exceed the Maastricht limit of 60% debt-to-GDP ratio by 2026. And that’s why Abela has to keep importing foreign workers - to reach that 4% growth.

Labour is desperate.  It’s cutting capital expenditure.  It will spend less on vital infrastructure.  It has to,  because it needs to try and cut costs from somewhere.  As interest payments rise and recurrent expenditure increases, it’s capital expenditure that will suffer. That means less money for schools, the energy grid, drainage infrastructure, road maintenance and health service upgrades. Labour is slashing capital expenditure by a staggering 15%.  That’s €155 million.

And that’s not the worst news. Abela, if he manages to cling on to his seat, will increase the national debt to €13.1 billion by 2026. In just 6 years Abela would have doubled the country’s debt. What that means is that by 2026 we will be paying €349 million euro per year in interest alone. That’s almost €1 million euro per day.  Every single citizen in the country, including children, will be paying €600 per year in interest alone.

No wonder just 35% trust Labour with handling finances.   Those 35% most certainly have no inkling of the crushing weight that Labour is saddling them with. And not just them, but their children too.

No wonder that survey shows that 39% of those who voted Labour in March 2022 have now changed their mind.  That’s 63,455 Labour voters. 10% have switched to PN.  Many more would if they only knew how recklessly Labour has borrowed on their account.

Amidst the ominous shadow of a reclaimed Labour lead, that survey sends a ray of hope. Amongst 16 to 35 year olds Labour is badly trailing PN, 30% vs 24.1%.  PN leads amongst the 36 to 50 year olds too. It’s only amongst the older generations that Labour still manages to steam ahead. That sounds like Brexit all over again. The majority in the UK never wanted to leave the EU.  But the elderly went out to vote and the young stayed at home. The grey vote condemned Britain’s young to a future outside Europe, a future they didn’t choose but will have to live with.  That should be a lesson for Malta’s younger generation.  If you don’t want Labour, get out and vote. Because if you don’t your grandparents will make the choice for you.

As the pendulum continues to swing, Abela will continue to feel the pressure. 2027 might seem distant now. But come it will.  Expect Abela to jettison all semblance of fiscal rectitude. He knows money will swing the vote and he won’t be shy to borrow more billions to buy what he needs - more time at the helm.

  • don't miss