Editorial | Sunday, 02 November 2008

How to widen the lower class

As the sun sets tonight and a new day dawns tomorrow, the government’s printing press will be in overdrive printing the yearly Booker of Maltese politics, the budget.
Despite all the changes to this annual ritual – from setting minimum and maximum prices to vegetables in the Mintoffian era to the modern-day propaganda veiled in business-like symbolism – the budget retains good part of its gloomy grip on the nation, even though some of the most taxing measures are nowadays craftily introduced by the government along the year in different ways.
The scenario to this year’s budget is radically different to that of last year. We had called it an ‘electoral budget’, because of the over-generous approach to all sectors of society – from the struggling single mother to the high-class ballet dancer – along the lines of Lawrence Gonzi’s irrational leap of faith predicting unrealistic economic growth. Sadly, we were proved right, together with the scores of independent-minded economists who warned Gonzi that his predictions were illogically over-optimistic.
Of course, Gonzi was not naïve, although what he did was sheer folly. Credited for reining in the deficit, he compromised everything by acting like a jolly Father Christmas in October, following the long-established code of conduct of every Maltese prime minister in his last budget before election day.
Neither is he naïve today, when he is still absurdly speaking of achieving a surplus by 2010.
The mere idea is insanely preposterous, just as the world is facing the debilitating credit crunch and some of the most Thatcherite governments are intervening massively to shield their people. Gonzi wants to do precisely the opposite; blinded by free market dogma that unmasks his pretensions of economic foresight.
Despite Brussels’ imposing and alienating diktats, eliminating the deficit is not, cannot, be an end in itself. This is witnessed by all the other European governments, led by Gordon Brown and Nikolas Sarkozy, who are now also talking of burden-sharing the credit crunch with the affected Eastern European countries besides investing more public funds to be able to face the global recession.
It is also witnessed by history. Mintoff and Mifsud Bonnici left a surplus, yet the economy and the overall state of the country were stuff of bygone eras and oppressive regimes.
It is also the role of government to reach out to the nation in times of hardship, to cushion the most damaging crises and give a helping hand to the people. The credo of blinded and unfettered economic liberalism has been once again shattered, as European leaders from Paris and London to Riga are waking up to their call to step in and save their people.
Even here, the situation has brought together some of the unlikeliest bedfellows on the MCESD who are usually more prone to sectorial backstabbing. Their unity in opposing the government’s measures is unprecedented.
Government intervention is the order of the day on issues of national security, national calamities, major emergencies, terrorism and other destabilising events. It is expected of every government to intervene in such matters. A financial crisis and the impending recession is no different. The world is facing one. And Malta is part of the world, just in case Gonzi forgot.
The truth is Gonzi has put himself in a tight corner, totally cut off from reality, struggling to reach his fictitious benchmarks when the entire world has realised that, since the downfall of Lehman Brothers, the goalposts have changed.
Just when it is most needed, government abdicates its responsibility. The brunt will really be borne by the middle class. Dumping all the costs of water and electricity onto the people will only serve to widen the lower class, put more people under the poverty line, and end up spending more on social services and unemployment benefits.
We only hope that, come next year, we will not be proved right again.

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