The chorus of constituted bodies heaping praise on the budget on One News, and the subdued questions directed at Gonzi by the Labour media on Monday, exposed the paralysis hitting Labour after the PN’s apparent coup de grace in a budget which marks the last before a 20-year-old government goes to the polls.
Sant’s reaction seemed to have been scripted before the budget speech. The party evidently expected a little tinkering of tax bands and allowances, rather than the full scale of the bonanza blitz we awoke to on Tuesday. Labour’s “too little too late” slogan says little to a family with two children earning a joint income of Lm10,500, who will have an extra Lm481 in their pockets by end 2008.
But perversely, the budget does prove the Labour party right on one point. With an economic growth rate of four to five per cent governments can still do wonders to alleviate the plight of the masses.
For the past three years, Labour has been saying that its proposals could be funded by a similar growth rate. If Gonzi can redistribute wealth before an election, the same can surely be done by Sant after the next election.
On Monday, Gonzi also thought us a lesson on how we can decrease the deficit by a further Lm19 million while slashing taxes, giving an extra Lm5 million in children’s allowances and making everybody happy: from AD-inclined animal lovers, to AN-inclined army gunners.
Surely it’s a paradox: how can a government manage to increase spending with one hand, and slash the deficit with the other? Italian Finance Minister Padoa Schioppa would do well to call Castille on 22001111 to seek some advice.
All this gives a feeling of déjà vu, reminding us of Eddie Fenech Adami’s golden years when the economy grew, money seemed not to be a problem and there was enough cash in hand to make rich and poor alike happy. Granted, it left us with the deficit “hofra” uncovered by Sant in 1996. But does anyone remember a better time?
The logic is still the same one which animated the Nationalists since the days of Borg Olivier. As long as property speculation and banks keep the economy pumping, the bounty is assured even if Malta is physically disfigured in the process.
According to Gonzi’s optimistic projections, sheer economic growth will give the government an extra Lm46 million in tax revenue despite the second consecutive tax cut. An extra Lm12 million over last year will come from EU funding.
No need to be pessimistic. Only last year we managed to pay an extra Lm27 million in income tax despite the Lm12 million tax cut. It’s elementary, according to Gonzi: the bigger the cake gets, the greater the government’s bite; the greater the government’s bite, the more it can distribute on election eve.
Yet after last Monday’s spending spree, which saw government expenditure rising by a further Lm39 million, it will be very difficult for the PN to rubbish Labour’s crude promises of halving the surcharge and giving hand-outs to first time property buyers on the simple argument that the country cannot afford them.
Rather than saying “too late too little”, Labour ought to be saying that it’s time a new team administered the country’s newfound bonanza.
Sant simply has to persuade us that his team has better managers than Gonzi’s – no mean task, considering the managerial skills of Labour spokespersons such as Silvio Parnis. But using junior minister Tony Abela as a barometer of competence, is not too far off the mark
Personalities apart, there is very little difference between the two parties’ recipe on how to trickle down wealth to the masses. Neither party dared propose new ways of channelling investment in the island from construction and banking to more sustainable and job creating ventures. Measures like property hoarding taxes, a one-off windfall tax on banks to finance a social new deal and a commitment to reform rent laws to revive the rental market, are all absent from both parties’ agendas.
Still, Gonzi can claim that we owe it to his past efforts that our finances are now in order and that we are only reaping the fruit of his past endeavours to rein in the deficit.
But Labour can retort that were it not for Gonzi’s tired and incompetent ministers, the country would have been in much better shape than it is now. Just give them another five years to add to their previous 20, and vouch for yourself that the country’s finances are in safe hands – a déjà vu of the “Finanzi fis-Sod 2003” poster comes in mind.
Once again Labour will have to persuade us that its ministers will be less prone to conflicts of interests, pressure from constituents and ties to the construction industry.
But Gonzi’s coup de grace over Labour was the way he distributed the country’s bonanza. While Labour has placed its bets on assisting first-time property buyers and halving the surcharge, Gonzi chose to put money into parents’ pockets – a much more benign approach than decreasing water and electricity bills for the next door neighbour, washing his car with a hosepipe without giving a damn about global warming.
And didn’t we all have the chance to phone Castille to participate in a Xarabank-style people’s budget? It all had the aura of choreographed, popular participation reminiscent of “people’s democracies” where everyone smiles and showers the dear leader with praise.
Surely all the Prime Minister had to do was look at surveys showing that people simply wanted more money to spend. But he went beyond that, addressing particular niche groups like animal lovers, soldiers, theatre enthusiasts, the disabled and artists.
Just minutes after the budget, the Prime Minister was talking to a token family sitting on a sofa at NET TV. The next morning it was the Times which incredibly managed to get real life people to talk on the positive aspects of the budget in the few hours between 9:00 pm and early morning. One unique specimen of Maltese youth claimed that what excites him most in the budget is Gonzi’s vision for 2015. And who said that all Maltese youths are only interested in clubbing and sex?
What we can now expect in the next weeks is for the PN spinning machine to produce a “Laburist favur Gonzi” – a reincarnation of the “Laburist favur l-Ewropa” of yesteryear. Anyone fit for the vacancy should call on 22001111 for an appointment.

jdebono@mediatoday.com.mt

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