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For years the Nationalist brand has been associated with economic growth, good management of the economy and most especially, low taxes. The 1987-1994 years were golden economic years when the country’s economy expanded at a tremendous rate. The country, its infrastructure and the people’s lifestyle registered a tremendous boost. The worry then was that the economy was overheating! There was a feelgood factor which allowed people to invest with full confidence in the country and the resources of its people.
Much of this is now history. The country and its people are loosing their self-confidence. The Nationalist party and government risks tarnishing its brand and being labelled as the party of high taxes and the government of zero growth. The electoral consequences are all too obvious. This could also explain the recent cosy two-party agreement on electoral changes.
The cornerstone of the present government’s economic policy is an over-dependence on taxation as the quick fix to control an ever-growing structural deficit. This approach fails to appreciate that deficits are best cut by the registration of surpluses which the country is very far away from.
This route no doubt suggested and insisted upon by Brussels has simply drained people’s disposable income and made people ever more cautious in their spending habits. The net result is the total absence of a feelgood factor.
It is clear that government is being advised to implement its total taxation policy with immediate effect and far away from the final electoral lap. This strategy is being implemented in the hope that by election time the tide will have turned. This policy is as risky as it is ill thought out. The foundations for this policy can only lie in the belief as expressed by the late Anton Buttiegieg that people forget and do not have a longer memory span than six months. Consequently all government needs to do is to concentrate and be fully focused in the last six months by creating a big issue which will rally the people behind government. Nothing could be further from the truth. This government with all the abrupt taxes it has introduced seems to be doing its best to loose the coming election. The introduction of the eco-tax, the ruthless attitude of wardens and the astronomically high fines when compared to the minimum wage, the unfriendly travel tax costing passengers to pay at times more on taxes than for the air ticket, the suggested parking schemes around Valletta and Floriana in the absence of a reformed public transport system, all point to an ever increasingly careless and insensitive government totally cut off from people’s plight. All these taxes even make the sea of taxes introduced by Alfred Sant in his brief tenure at Auberge de Castille look mild. No wonder Alfred Sant goes on in his do-not-disturb mode, fully cognisant that government’s mistakes will land him the premiership.
Government needs to rethink its taxation policy and focus on growth. It should consider a flat rate taxation regime, incentives to start ups, fiscally encourage environment friendly businesses. The list is endless. Are there no ideas round the cabinet table?
A cosy relationship
The last time the two parties agreed on anything, they sanctioned their privileged pensions regime. Suddenly out of the blue, two days ago, a general agreement on electoral changes is announced. Agreement has been reached privately and secretively between the two parties behind the backs of not only third parties but also the electorate. They both agree in effect to make that the possibility of third parties being represented in parliament difficult. It is seen as a threat to their long-term interests. Consequently Swieqi, an area where the widest dissent is being expressed is removed from the tenth district and linked to Gzira, a sure way of diluting third party representation and a constitutional amendment is being suggested to keep Gozo as a region rather than the more acceptable approach of insisting that persons with a second home in Gozo be forced to vote at their normal house of abode in Malta.
This all smacks of a two-party hegemony conducting business in an Italian ‘partitocrazia’, smoking-room politics.
The two-party system is exhausted. It not only weakens our democracy but is an obstacle to economic development since the winning sides only utilises half the potential of the country. We fear that the recent agreement simply highlights that the two parties want this system to carry on. They may but the people certainly do not.
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