Joseph Muscat added some prose to his poetry by presenting 10 proposals ahead of the next budget on November 9. But what was most striking in last Sunday’s ‘national manifestation’ was hearing Muscat talk like a Nationalist in front of a Labour crowd. Is Muscat’s Progressive Labour morphing into a ‘PN-lite’ party, JAMES DEBONO asks?
Those who expected a display of socialist militancy from last Sunday’s Labour manifestation must have been bitterly disappointed, having nothing to clutch at except Muscat’s mellow yellow tie.
On his part, Muscat seemed more interested in appealing to those sectors of society which were least likely to attend his party’s protest march, than in preaching to the converted.
He even refers to the birth of a new post-ideological movement which even appeals to the “people of the North” rather than to the Labour Party, whise roots are very much in the South.
Even Muscat’s dubious choice of a yellow tie, coupled with his wife’s choice of a pale blue scarf, seemed reassuring enough for those who have a phobia of anything red.
Surely by appropriating Eddie Fenech Adami’s motif “is-sewwa jirbah zgur”, Muscat’s risks appearing phoney to the discerning voter.
But the transformation is not skin-deep and goes beyond mere soundbites.
Muscat’s own economic vision, namely that “when we put a pound in people’s pocket, that pound will circulate, create work, create wealth and the government ends up collecting more money in taxes,” is incredibly similar to the PN’s own mantra in the early 1990s.
It was a mantra which worked well at a time of economic growth, which enabled Nationalist government to cut taxes while increasing social expenditure on health and education.
From a strategic point of view it is very hard for the PN to attack Muscat’s vision, which apart from being so similar to the PN’s, is also analogous to what is currently being proposed by many centre-right governments in Europe: for instance, that of Angela Merkel in Germany.
The question Muscat has to answer is whether this vision is consonant with an economic crisis which has depleted government coffers, at a time when health and welfare costs are also rising.
Some of Muscat’s concrete proposals – like the reduction of the 12% property withholding tax – could further reduce another revenue stream from a sector of society which can afford to pay.
For while Muscat lambastes the government for going wrong on its €88 million deficit prediction by at least €180 million, if enacted, some of his proposals could worsen the situation.
Muscat made no attempt to cost his proposals, and this is just as well: some of his proposals are so half-baked that they cannot be costed even if one tried.
Surprisingly, Muscat has shied away from calling on the government to honour its electoral pledge to reduce the top income tax rate from 35% to 25%, as he has done in a number of occasions in the past months.
This could be interpreted as a sign of caution and responsibility on Muscat’s part.
When it comes to the party’s ideological shift from left wing to right wing populism, Muscat has not re-invented the wheel. In fact he looks more like a kitsch version of Tony Blair (as well as a less austere version of Alfred Sant who, between 1992 and 1996, already talked about the need for his party to form ‘new social alliances’ with small businessmen and middle class voters).
One of the PL’s slogans before the 1996 election was in fact “a breath of fresh air for the private sector.”
In his speech, Muscat referred to the self-employed and small businesses no fewer than 13 times, and made a positive reference to the private sector a further eight more times.
But unlike Sant, Muscat refrains from hitting out at big business interests who formed Sant’s proverbial “friend-of-friends network” of “barunijiet”.
Where Muscat fares better than Sant is in his penchant for turning ‘corruption’ into a bread-and-butter issue, describing it as a “tax” which the people have to pay.
In this way Muscat has made corruption a tangible issue for the man in the street: something the more intellectually-inclined Sant arguably failed to do.
But despite purging Labour’s political discourse from any invective towards the rich and powerful, or any hint of ‘spreading out the wealth’ (to borrow an Obama term), Muscat still manages to address the concerns of the crowd he has in front of him.
In his speech he touched on all the top concerns emerging from surveys at the moment, namely: the cost of living; medicine prices; employment; the state of the roads; and waiting lists in hospitals.
But he is careful to remind his audience that “the cost of living is not triggered by small shops or by those who contribute so much for the economy, but by decisions taken by an instable and irresponsible government.”
Even when addressing medicine prices, he shies away from denouncing importers – limiting himself to calling for the setting up of an agency which would address this problem “together with the private sector.”
Muscat also tried to make the point that he is not merely opposing the government but he is also making concrete proposals.
Still, some of Muscat’s proposals appear to pander to business interests. The proposal to reform the eco-contribution in a way which does not muzzle businesses, while still incentivising environmental measures, needs to be explained. For in fiscal matters, the Devil is in the detail.
Significantly, banks – the global bogeymen of the crisis – are the only powerful interests taken to task by Muscat in his speech. Yet his proposal is a moderate call for talks with banks, about reducing their tariffs.
Neither does his populism reflect environmental considerations. His proposal to cap water and electricity tariffs, irrespective of any increase in the international price of oil, could also benefit people and industries who waste precious resources. It also does not consider the fact that water tariffs in Malta are abysmally low to begin with.
Surprisingly for a modern leader, the environment does not seem to top Muscat’s list of priorities. Even his proposal to revoke the 50c tax on each tourist visiting Malta – a proposal which has been postponed indefinitely by the Nationalist government – ignores the green reasoning behind the proposal which aims to compensate for the environmental costs of tourism.
While Muscat’s message is increasingly resembling that of the Nationalist Party’s before it had its wings clipped by growing deficits, Muscat is even more hardhitting against Lawrence Gonzi than Alfred Sant himself. While on numerous occasions Sant even refrained from mentioning Gonzi’s name and generally ignored the PN’s internal matters, Muscat appears hell-bent on fully exploiting his opponents’ rifts.
Ultimately Muscat’s worst enemy remains the three long years that spearate him from the next general election, and which provide Gonzi with ample time for an economic recovery.
By undermining his rival’s credibility and stoking the fires currently raging in the opposite camp, he seems keen on making sure that Gonzi remains a lame duck.
If successful, he should have no problem making Gonzi unelectable. But he has yet to convince that he will do a better job himself.
Fenech-Adami-isms ‘We are your servants’
‘Is-sewwa jirbah zgur’ (Rightousness will surely prevail)
Target Gonzi ‘A pound in your pocket is better than a pound in Gonzi’s pocket.’
‘If Gonzi bases his judgements on different Ministers on their looks, one wonders how he treates the rest of the people.’ (with reference to the different treatement reserved for John Dalli and Tonio Fenech)
‘He is more concerned about party division than on the problems facing families.’
Business-friendly ‘I trust the private sector’ (with reference to the promise made by hoteliers that they won’t increase prices if VAT on restaurants is reduced.
‘The private sector is being asked to shoulder the burden of the government’s wrong decisions.’ (with reference to the Cost of Living Increase)
‘Don’t put the private sector in a corner.’
‘When we put a pound in people’s pocket, that pound will circulate, create work, create wealth and the government ends up collecting more money.’
‘Families and business are more careful with their money than the government.’
‘The cost of living is not triggered by small shops or by those who contribute so much for the economy but by decisions taken by an instable and irresponsible government.’
Leftism ‘We are ready to pay taxes to keep healthcare and education free of charge, or to improve the state of the roads, but not to pay the corruption tax.’
‘If the banks are prospering, and I say let them prosper, they should also take care of the interests of the Maltese economy.’ (with reference to banking charges and the proposal to give unemployed a moratorium on mortgage payments)
Labour’s 10 Budgetary proposals
Debatable but doable Moratorium on mortgage payment for the unemployed;
Maximum ceiling on utility tariff rates;
Freezing tariffs and licences for a year;
Remove 50-cent tax on tourists visiting Malta;
Lower VAT rate on restaurants and hotels;
Airy-fairy/Wishy-washy Talk to banks about reducing tariffs on their services;
Address food price by curbing abuses at the Pitkalija;
Address medicine prices through setting up of a Consumer Agency; Revise eco contribution in a way which will ‘make it less of a millstone around traders’ necks and more of a way to incentivise green measures.’
Reduce the 12% withholding tax to revive property sector ‘without harming the environment’.
Muscat’s wordcount Concerns Number of mentions
Utility Bills 12
Medicine Prices 8
Cost of Living 8
Work 7
Education 4
Tourism 4
Hospital waiting lists 4
Roads 4
Deficit 5
Categories appealed to: Small businesses 13
Workers 11
Students/youths 8
Private Sector 8
Middle clases 2
People from the North 1
People from the South 1
Attacks on government Corruption 9
Indecisive Prime Minister 7
Instability/uncertainty 5
Irresponsible government 5
Lawrence Gonzi 4
Tonio Fenech 1
The Gonzi crisis 1
Michael Briguglio
Labour’s proposal on utility tariffs is socially regressive and ecologically unsustainable.
If there were a maximum rate on such bills, this would mean that wasteful practices would not be penalised, thus encouraging people to be wasteful whilst being aware that this will not have an extra charge. Low and middle-income earners are not likely to benefit from this policy, and those who are careful in their consumption will not be rewarded for such practices.
Wasteful practices, and not basic consumption, should be penalised. Government should commission scientific studies to determine how basic consumption can be quantified, taking into consideration ecological, social and economic factors in the consumption patterns of individuals, families, businesses and organisations of different sizes.
Hence, whilst the international price of oil cannot be ignored, a fixed tariff rate should be introduced for basic and sustainable consumption of energy. This tariff should not be increased during the next year. But anyone using more than this amount should be expected to pay tariffs which which reflect fluctuations in the market.
Michael Briguglio is Spokesperson for Social and Economic Development, Alternattiva Demokratika – The Green Party
Desmond Zammit Marmara
Joseph Muscat’s 10 proposals for the forthcoming Budget are quite positive because while addressing the economy through badly-needed measures to help crucial sectors of it, e.g. tourism, they also manifest the social conscience of the Labour Party in that they are aimed at easing the burdens on the shoulders of ordinary citizens, e.g. the setting up of an agency for consumer protection and taking action on food prices.
The Nationalist Party’s usual rejoinder – where is Dr Muscat going to find the money to back his proposals? – shows its lack of imagination and courage to initiate progressive change. The money can come from less waste and more efficiency in the administration of the country, the creation of more national wealth and employment opportunities through a successful campaign to attract more foreign investment to Malta, and the elimination of corruption, tax evasion and the abuse of social benefits.
Dr Joseph Muscat’s proposals are aimed at avoiding the damage caused to the economy and to Maltese citizens by the policies followed by Dr Lawrence Gonzi’s Nationalist Government whose reliance on heavy taxation has seriously slowed down the economy and, at the same time, lowered the standard of living of all Maltese citizens. Muscat’s proposals are aimed at stopping this negative reliance on severe taxation, which has not only failed as a temporary palliative but has instead backfired to the extent that new and serious socio-economic problems have been created.
Dr Muscat has already shown that he has the maturity required for leading the nation. He has a particular gift of clinically analysing the problems Malta is facing today and also suggesting creative and practical solutions to them. Dr Muscat’s strongpoint is that he is out to unite the nation and not to divide it. Labour’s policies under his leadership are not only moderate and progressive, but also socially inclusive.
As a potential Prime Minister, Joseph Muscat will come to the post having the disadvantage of the newcomer, i.e. inexperience. However, the vast experience he has gained as a Member of the European Parliament will be invaluable to him as leader of the country. His record of achievement throughout his career is second to none. Dr Muscat is undoubtedly a winner, not only in the narrow politically partisan sense alone but especially in difficult situations which pose challenges that only gifted leaders can successfully deal with.
The Labour Leader has to beware of only one fatal pitfall: the pressures of a minority of hard-core elements within the Left in Malta who still believe in confrontational politics and unnecessary and fossilized militancy.
Desmond Zammit Marmara is an educationalist and a columnist
Vince Farrugia
GRTU recently produced a budget strategy, proposing a stimulus package which is achievable and within the limits of our financial constraints. Joseph Muscat picked and chose from our proposals, failing to understand that after a year of constant criticism of Gonzi’s government performance we in business expected from him the alternative Salvation Plan.
He now gives us a hotchpotch of economic and financial thinking. Muscat is promoting single fiscal tools without scope or link to economic, social or environmental planning.
Joseph Muscat is right in criticising, but again he has not promoting alternatives. We have promoted new factory buildings, new warehouses for logistics work that can be attracted to Malta, fiscal reforms to cause enterprise to renovate and reinvest, etc. Ours is a list of productive investments to really get the economy going. Joseph Muscat’s is just a cut and paste exercise.
On electricity tariffs, Joseph Muscat’s ceiling price fixing makes no economic sense. He should come forward with sustainable and well worked out proposals. He promised to give politics a new approach, and not merely a new face. The new approach must be based on exact calculations and professional strategic thinking. He is not doing this.
For me Joseph Muscat’s act is an anti-climax. I expected him to surround himself with a team of smart economists who over the summer months would have produced the alternative stimulus package that would really cause Government to rethink some fundamentals of its economic strategy. This is what we tried to do and I am happy with Governments and the public’s positive reactions to what we proposed. I don’t think Joseph Muscat can have the same reaction from business.
Budget, economic and financial proposals are not made for street demonstrations but to convince decision makers and investors. I think Joseph Muscat lost a tremendous opportunity to show his real worth as an alternative Prime Minister. I hope he rises to the occasion on November 9th. It will be a day of reckoning for Tonio Fenech, but also for Joseph Muscat.
Vince Farrugia is director-general of the Small Business Chamber (GRTU)
Winston Zahra
When talking about Dr Muscat’s proposals regarding tourism, the important aspect to understand is that support of the tourism industry is support for the whole island.
Many hotels spend a great deal of money on their own marketing campaigns but the reality is that the positive effects of the tourism industry stretch much further than just hotels and affect a wide cross section of other businesses.
Hence the necessity for central government to continue supporting the overall industry. The increase of any cost on the tourism product does not help towards keeping the industry competitive. This year alone hoteliers have reduced their rates very substantially so as to try and remain competitive, so the introduction of a 50c tax is definitely not conducive to driving business to our Islands.
Moreover the implementation of this tax on hotels is discriminatory as by default, 30% of visitors to our islands who do not reside in hotels will not be paying it.
In as far as the reduction of the VAT rate on tourism related services and restaurants is concerned, the only way this would work is if a proper enforcement system is put into place so as to ensure that the full reduction of the VAT rate is reflected in the prices of the affected services thereafter.
If this is not done and the reduction in VAT does not result in an equal reduction in prices than the desired effect would not be felt.”
Winston Zahra is a hotelier and a former MHRA chairman
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