interview

To contest or not contest an election

KURT SANSONE talks to former Mid Med chairman Alfred Mifsud on this week’s budget, the economy and whether he will put us out of our misery and tell us if he intends to stand as an MLP candidate at the next election

Financial guru Alfred Mifsud has been flirting with politics for the last five years but he will only take a decision on whether to contest the forthcoming election on behalf of the Labour party over Christmas. He admits that the probability of his contesting is more than 50 per cent, but prefers not to disclose anything more significant right now.

"I am 50 years old and I think I have proved myself in other aspects of my life. It is time for me to take a decision, which will be around the end of December," Mr Mifsud says.

The decision has been coming for quite some time and he believes centres around one question which he asks himself: "Will I be helping the Labour party or does the party have enough people to do without my services?"

He then goes on to state his personal belief that the MLP needs new faces with proven track records. "The unfortunate 1998 election necessitates a new breed of people because the Labour party was perceived as abandoning government. I call it unfortunate because the party only sought to achieve a new electoral mandate after one of its members thought he had the right to sabotage the previous mandate. I firmly believe that Dr Sant was being responsible when he called an early election."

I turn the discussion towards the topic of the week, the budget. Mr Mifsud’s criteria for determining whether a budget is ‘good’ or ‘bad’ fall into three categories, deficit reduction, wealth stimulation and social justice.

"I believe the budget fails on all counts because it is not addressing the real problems. Telling the people that problems are being solved is simply deceiving them," Mr Mifsud says.

He questions the tone used in the initial pages of the budget speech when from the onset it criticises the Labour Party’s stint in government.

Mr Mifsud states, "I would have expected much more from a minister who was presenting his 8th budget. We cannot honestly believe that all the current problems were created in the MLP’s 22 months in government."

In line with the Labour party’s criticism Mr Mifsud disputes the figures given by the Finance minister. "Between January and September 1998 the deficit stood at Lm88 million, which is equivalent to the deficit registered in the first nine months of this year. I find it very hard to believe how in the last three months of 1998 the deficit shot up to Lm150 million as Mr Dalli claims. The figures were adjusted to reflect a higher deficit so that when one compares the current statistics to the previous ones it seems as if government is managing to control the deficit."

Mr Mifsud has his feet firmly on the ground and admits that the deficit is a real problem that needs to be tackled seriously. He proposes a tripod approach, which includes tax collection and enforcement, expenditure control and economic growth.

"The government is tackling the problem by simply raising revenue. Although I applaud the government’s achievement in this regard, the deficit cannot be addressed solely by adopting one approach. Increasing revenue without adopting the other measures will only stifle economic growth," he continues.

It is public knowledge that the government’s major expenditure lies in social services and public service wages. Would Mr Mifsud suggest touching any of these?

"There is no question about the social services. These cannot be touched but when it comes to the public sector a lot can be done. Firstly the government must stop taking in new people on board and instead invest on retraining. Secondly, a number of authorities can be merged to avoid having overlapping functions thus maximising human resources. The third measure is the introduction of voluntary retirement schemes."

I bring up the issue of a wage freeze in the public sector. Mr Mifsud agrees with the idea proposed by John Dalli, but believes it should have been implemented in 1998 soon after the election. Most probably it would not be implemented now on the eve of an election when the government is in its last lap of the legislature," he says.

At this point I remind him of how he criticised the Labour party’s economic policy review, saying it had lacked concrete measures to tackle the problems facing the country.

"My criticism was heard, so much so that the Labour leader announced the formation of an action plan committee to come up with concrete proposals to put the principles approved by the general conference into action."

It goes without saying that Mr Mifsud is a member of the committee.

The discussion goes back to the measuring criteria used by Mr Mifsud to judge the budget. He insists that there is nothing radical in the budget to stimulate wealth and economic growth.

"If the proposals included in the budget to remove red tape for micro businesses are implemented, that will be good. But as regards tourism, which has been hard hit because of the international crisis, there are no real measures that make a difference."

Mr Mifsud backtracks for a while. "All over the world, governments are increasing their expenditure at the moment to counter the prevailing negative climate. Unfortunately, Malta is constrained and cannot do likewise because in the past we went in over consumption mode."

Mr Mifsud talks about the Drydocks and how in 1986 the problem was staring everyone in the face. He chides the government for doing nothing to tackle the problem back then. "Fifteen years and Lm200 million later we want to solve the problem by the end of November. We need to have good leadership to take bold decisions at the appropriate time not when it is too late," he adds.

I ask Mr Mifsud whether cross-party consensus can be reached on the solutions to tackle the deficit problem. "Yes, if the government is elected on a just manifesto," he interjects. "We cannot have a situation where a party promises all the world on the eve of an election and then does not deliver once elected because of the financial problems. Political parties should be obliged to cost their pre-electoral proposals. It is unacceptable for a party not to be accountable to its manifesto once in government."

Mr Mifsud expresses his hope that in the next election the Labour party won’t fall into the same trap as the Nationalists.

The discussion turns towards the social element in the budget. Mr Mifsud agrees that the measures concerning foster carers and separated spouses are sensible ones, but he insists that across the board there is nothing else.

He argues that the cost of living wage increase does not even compensate for the rise in the cost of living and with the tax bands kept frozen, disposable income will continue to decrease.

I ask him whether he agrees with the proposals for reforms in the social security system. Mr Mifsud smiles and fires back a pertinent question, "Is this reform proposed by John Dalli’s government or by the rest of government?"

Mr Mifsud explains that the budget is Mr Dalli’s wish list but this does not necessarily mean that it has the whole government’s backing. "The same goes for the public sector wage freeze," he argues. "It is Mr Dalli’s proposal and it will probably be rebutted by other government ministers."

Holding on to economic affairs I bring up the VAT issue, but the discussion is not very long.

"I would press hard for the MLP to retain VAT because the country cannot afford another tax change. It could be adjusted by introducing different bands," Mr Mifsud says.

He then reminisces about VAT’s introduction in 1995 and adds that the timing, a year before the general election, was wrong. "It should have been introduced in 1993 just after the election. In that way the system would have started working and government could have reaped the right dividends."

The discussion invariably turns to Malta’s bid to join the European Union. Mr Mifsud is true to his party loyalty. "Given the choices available I believe that the MLP’s choice is more sensible," he says.

Mr Mifsud goes on to explain that the current membership model, where applicant countries are required to adhere to the Acquis Communitaire, is not suitable for Malta. "If the EU changes its ‘one size fits all’ arrangement then it will be a more sensible option for Malta," he argues.

"As a country we do not have the same motivations as Eastern European countries and Cyprus. Their prime motivation is political because of their history. Malta has no political motivation to join the EU, on the contrary being a small island with a small economy, I believe we can survive better on the global stage by carving out our own niche."

I bring up Ireland’s success story in the EU, but Mr Mifsud is sceptical. "For the good part of the first 20 years since membership, Ireland’s economy was on the downturn. It only took off when the country found the internal leadership to take bold decisions and stimulate the economy."

Mr Mifsud says that Malta should have other priorities, which first and foremost include getting its own house in order.

Explaining the concepts of the ‘Swiss model’, he explains that it does not integrate the country politically thus leaving a number of options open. He specifies that the ‘Swiss model’ is different from the arrangements Iceland and Norway have. Under Labour’s option the length of time before certain measures are introduced is negotiable.

What will it take for him to favour membership, I ask.

"I feel that the EU will eventually be disappointed by the current model it is proposing and when and if that happens permitting more flexible arrangements, I can see Malta becoming a member."

The EU issue cannot be discussed without making reference to the referendum. Mr Mifsud does not mince his words. He believes that a pre-electoral referendum is a waste of time, given the short time span between a possible referendum and a general election. "If anything a referendum on EU membership should be held after the general election, if the Nationalist Party is re-elected."

What if the Labour Party is elected?

"The ‘Swiss model’ is not an irreversible step. It is a half road to membership and any government coming after can pursue membership. A referendum is thus not required. On the other hand, EU membership cannot be reversed. It is a political decision that will change the country’s historical and political course radically. That is why a referendum is required."

I continue the hypothetical scenario. What if Labour loses the next election?

"The party will have to seriously re-consider its position," Mr Mifsud answers.

He then criticises those who say that if Malta loses the first bus to membership, then membership would be lost forever. Mr Mifsud stresses the importance of putting the economy on solid ground. "If we manage to create a strong economy we will have no problem in joining the EU, even if we do not make it in the first wave. Norway and Switzerland, both with strong economies, will have no problem being accepted by the EU even after the next enlargement. Why should Malta be different if it manages to create a wealthy economy?"

Mr Mifsud is a regular columnist in the English language press. His articles are more often than not, used by the Nationalist Party to drive wedges in the Labour Party. I ask Mr Mifsud whether being a free thinker puts him at odds with the Labour delegates.

"I have no problem with Alfred Sant. We have known each other for a number of years and we can understand each other with a blink of the eye. My belief is that once a policy is up for discussion I have a duty to give my opinion. However, once a decision is taken, although I might not agree with it, it is binding. Life is not all black and white it has shades of grey and I sincerely believe that it is my duty to express my opinion."

And does he see any impending clash with former finance minister Leo Brincat if both are elected as part of a future Labour government?

"It is a nice problem to have for any party. But you are assuming too much. I have to take things one step at a time. First I have to decide on whether to contest, then I have to get elected before even aspiring to become a minister," he adds with a smile.