I have seen it stated in the local papers that as incomes increase, so will prices.

I ask, does it really work that way? Is it so automatic that higher incomes will increase prices so that higher profits are made by the commercial community and the purchasing power of the consumer is neutralised?

I think not.

Supply and demand

I am very much aware of the forces of supply and demand and how these affect prices in any economy. It is true that higher wages will generate additional demand. But it does not follow that this should result in higher prices.

First of all, higher incomes will not be directed towards consuming the same products. Higher incomes will also be applied by the public to consume products and services which they did not consume before.

Secondly, most of the products and services that we consume in Malta do not have a fixed or a limited supply. Therefore supply is generally very elastic and should adjust itself to increases in demand without hiking prices. Traders and service providers should be increasing their own income through added volume. If they sell more, then they will make more even at the same profit margins.

Quality of life

Inflation, especially when caused by opportunistic manoeuvres, is harmful not only to consumers who become victims of such abuse, and not only to the country at large, but to the perpetrators of the abuse as this will induce pressures on the country that will eventually reduce its competitivity.

The above statement is tantamount to saying that higher incomes will result in bigger profits to the commercial community. I do not think that such statements do any good to this community.

Higher incomes should result in a higher quality of life for the people. They should be able to diversify their consumption, enjoying products and services which they would not have been able to afford before.

The choice ahead

It could be a few weeks, it could be a few months. We will soon be called to decide on our future. The strategists in the Nationalist Party are making their calculations as to the best time to call the election. The strategists in the Labour Party would probably have their plans all prepared from day zero (election date) and working backwards. Without any doubt, the voters will be subjected to a lot of noise.

When they would prefer to hear sensible logical arguments, they will probably have to duck to avoid being hit by the mud being slung between the two sides.

Where they would expect to see doable, viable programmes, they will be harangued by prattle fraught with inconsistencies and absurdity.

When we should be going through a process of analysis and persuasion, we could well be inundated with glittering soap bubbles, imagery and mirages.

When we should be weighing the capabilities, aptitudes and attitudes of those who are presenting themselves to lead us, we are likely to be immersed in a heavy deluge of propaganda.

Watch their actions

When I hear anyone engaging in character assassination and libellous slander I always ask myself: what is in it for him?

I do not believe that anyone whose only interest is to offer oneself up for the service of others would use such tactics. I do not believe that anyone who does not have any self interest will stoop to harm a fellow human being.

Therefore, let the actions of those vying for your approval be your guide.

The decision that we will be called upon to take is a decision on which our future and the future of our children and grand children will hang. It cannot be taken lightly.

John Dalli is a Nationalist Party MP