The fifth administration

From the electricity surcharge and the ‘taxless’ budget to the painful PBS restructuring, Lawrence Gonzi speaks of his plans for the country

Prime Minister Lawrence Gonzi greets me casually: “hawn, Salv”, but continues tapping away at his smallish laptop, clearly hassled for time. With his budget redundantly dubbed ‘a laptop budget’ by Alfred Sant from his original repertoire of political clichés, seeing Gonzi working the keys on the notebook is poetic justice. I waste no time and kick off with my first question. The Prime Minister is visibly more comfortable meeting me this time round than a year ago.
My first comment on his success at divorcing the fuel issue from the budget is greeted with a smile. How could he justify the government propaganda leitmotif of people living better off when there will be less money in people’s hands?
“We have to be realistic, the government will be the worst hit from the international fuel crisis. Everyone seems to forget this,” Gonzi says.
But was there any other way to react to this crisis, when the escalating price of oil had been in the offing for the last years. “We would have made a fundamental mistake if we had not addressed this problem. Last year we reacted to this crisis by increasing the surcharge to 17 per cent. You will probably argue that purchasing power will decrease and with this in mind we adjusted our economic growth targets accordingly. There is a lot to add to this issue – we made it a point to mitigate the impact on families and industry, by introducing capping.”
I turn to the problem of Enemalta. The parastatal company has been with us for years, a clear example of leadership by mismanagement, with no understanding between expenditure and revenue. And still, no action was ever taken by previous administrations, predecessors of Gonzi’s with whom even the PM himself worked along as a Cabinet member.
“That is not fair,” he shoots back clearly unwilling to blame the Fenech Adami government for failing to take action on the issue. Meekly, he offers one example citing the fact that car fuel prices were adjusted as part of Enemalta’s reaction to a changing world.
I point out to him this was only very recent. “When I was minister, we tackled the dockyard issue,” he says about the Lm300 million debt the government dropped off the beleaguered dockyards accounts, “…one cannot handle everything at the same time.”
I tell him energy conservation had never been a priority for Enemalta, his statements about alternative energy having been different from what Investments Minister Austin Gatt has had to say.
“Even here, this is untrue, in previous budgets we have taken steps to address these issues. The decision to stop using high sulphur fuel oil was a conscious decision which meant we spend more to assure ourselves that there would be less air pollution.”
So why is he so bothered about describing himself as greener than former PM Eddie Fenech Adami? “I am not ashamed to say that one of the three pillars I have put forward as my agenda is the environment issue. But this cannot mean that former budgets did not include environmental issues. One can argue that this is never enough. As finance minister I can appreciate more the economies of scale and the need to be realistic. We must also let the public know that photovoltaic cells and solar panels will not solve the energy problem. It will help but not solve.”
With his own energy revolution led by Austin Gatt, it is needless to say that in people’s minds Gatt is a man who means business, even if this means doing things which leave the public with a bad taste in their mouth. Notoriously, his trademark has been felt recently: describing the MCESD as a talking shop for the social partners, his churlish advertising campaign in the press on the energy crisis facing the island, and his handling of appointments at PBS.
Does Gonzi wish for a person such as Austin and his style of doing, or does he prefer a calmer way of doing things?
“The beauty of the Cabinet is working in a team of different people with different styles. On the energy crisis we cannot take this matter lightly and I for one – not Austin – am calling for urgency. Austin happens to be the minister who appears to be tough.”
I pinpoint his disparaging comments about the MCESD and on Alfred Sant in the recent energy crisis. Gonzi stands by his minister: “it is a fact that the description attributed to Austin are reverberated by the same members in the MCESD. I had this sensation when I attempted to finalise a social pact.”
Who does he blame for this failure? “The GWU. In this very room at 3am, we had reached an agreement and I believe there was a good agreement. And it was the GWU that did not make this possible.”
Did he consider moving ahead without the GWU? “One cannot, for practical reasons. Because the social pact is linked to an increase in productivity, so the involvement of the GWU was crucial.”
I point out that, ironically, the Nationalist media painted former GWU deputy secretary general Manwel Micallef as a moderate leader in the union, which worked against his leadership bid against incumbent self-styled “militant” Tony Zarb. Was the PN really truthful about wanting a moderate unionist at the GWU’s helm?
His answer is evasive: “It is our interest to see that all the constituted bodies have people of stature. They have to be leaders, they cannot simply be messengers.”
With his second budget speech since becoming finance minister having attracted its fair share of critics, I ask him about Nationalist MP John Dalli’s comments on the reform in withholding tax that should have distinguished between those who inherit and those who invest in property.
“I can see John’s views, but what we are attempting here is to create some streamlining.”
He says he will be revisiting the proposal, “to be precise we are looking at the way this proposal is to be applied. I have been referred to some discrepancies in our proposal, such as in the case of couples who no longer plan to get married and wish to sell their property. We are looking into these cases. We have also looked at the transfer of properties on the first contract where the profit on the sale is not great. These changes will be seen to in the coming weeks not months.”
As we hang on to Dalli’s comments, I ask him about whether he has any intention of using the former minister in the near future? “On John… it’s not fair only to mention John, I must look at all the backbench, but John has great experience and we have to continue to look at involving everyone.”
I stop him. I tell him that I am referring specifically to John Dalli not to the backbench. Will he involve him? He says: “I am thinking about John, but not only about John. But yes, John has great experience. Yes, I am always thinking about it.”
From that non-answer, I ask him to explain how he expected his public to be understanding about taking the brunt of Enemalta’s Lm50 million added costs for the year, when he had engineered the Lm300 million write-off at the Dockyards and a Lm9 million spend for the purchase of Dar Malta in Brussels – without forgetting the Lm2.8 million Iraqi debt Malta rushed to kill as part of the honourable reconstruction of the US-occupied state.
“When we talk about Lm50 million we are referring to the oil crisis and the reality of the current oil crisis. And as Prime Minister I must explain the reality behind this crisis. We cannot pretend that nothing has happened. Time will only tell if the decision to purchase Dar Malta was a mistake or not.”
I butt in to ask him if in the present circumstances he would take a decision to purchase “Dar Malta fi Brussel” today? “The question is hypothetical,” he answers in a fashion reminiscent of Alfred Sant’s tactic of brushing away questions. “Everyday we take these kind of decisions. What if you were to ask me what I would do if I sell Sea Malta to Grimaldi in the present circumstances?”
Failing to see the point, he gives me another example: “Should we not invest Lm7 million in new roads? And you would ask me why not invest Lm7 million in cutting part of the Lm50 million future deficit at Enemalta. But no, we have taken a conscious decision to improve the quality of our roads. Or should we take Harry Vassallo’s suggestion that we should postpone Mater Dei’s completion. If I had to take his suggestion I would be throwing away millions of liri.”
His budget featured specific targets to reduce public expenditure at public entities from Lm77 million to Lm73 million, and operational costs from Lm35 million to Lm33 million, but how does he plan to achieve this?
“This year we have managed to reduce our expenditure, and this has been recognised by people such as Alfred Mifsud who voiced their approval in public. I have to say that if the government had to continue spending as it had, our economic growth would be far greater.”
I egg him on to explain where in the budget he has presented the opportunity for the economy to grow? He says he is convinced that in the transformation of the manufacturing industry one can find the future and he cites the opening the electronics and pharmaceutical factory units in Malta.
I reminded him that this kind of industry did not provide for large numbers of employment. “We have to recognise this type of reality,” he says.
And whoever is 50 and has lost his employment, what are they to do? “I am pleased to note that the schemes for over forty-year-olds are a success.”
So would he go first for employment at all costs, or quality wages? His answer was predictable, which reminds me never to ask a stupid question. “Both. We need employment and one that provides for job security. My biggest preoccupation at present is at Denim,” he says about the textile industry on the verge of laying off 700, most semi-skilled and unskilled workers. “Denim had a problem last year and it had started to show warning signs. But this is the private sector and it has to find ways out of the crisis.”
His comments contrast with the media howler about a handful of Sea Malta employees, and the near dead silence for the fate of 700 Denim workers.
I tell him that I like to refer to his premiership as the fifth administration, rather than the fourth administration commenced by Eddie Fenech Adami. His break with his predecessor’s policies marks the start of his own administration.
PBS, which possibly is now more commercially viable, but still a very poor showcase for state broadcasting, is one example. And what about consensus with the Opposition on electoral reform, would he succeed?
“Let me tell you I published the pre-budget consultation document.”
I stop him: why did he hold pre-budget talks with a selected part of the media? “U iva,” he says. “At the end of the day, this briefing, I wish to do with everyone.”
But he clearly did not. “I also did other things: I published a document on pension reform.”
I did not intrude to remind him that pension reform had been on the cards and debated for over eight long years. “Now I learn that the Opposition wished to have a specific invitation to comment on the pension reform document.
“PBS can improve its service. We appointed an editorial board but I am not only interested in the bottom line. And I recognise that it is difficult to find people who will run the show there. PBS is a big challenge. I admit that there is room for improvement. On electoral reform, I consider this to be a priority. Contacts have been made but I disagree on imposing a system.”
When he comes to electoral reform is he willing to look at the national interest above that of the political parties, I ask. “I disagree that the national interest was not taken into consideration, I was chairman of the commission and there was agreement that was in the best interest of the nation.”
I turn to his u-turn on the golf course: “I will repeat what I said in the budget – I will consider the golf course but not at all costs.”
I asked him why this country sees a facelift only when foreign dignitaries visit the island, referring to the CHOGM conference. “This is not true. Most of the roads will not be used by the dignitaries. This is an opportune moment for our country which we should not miss out on.”
Time is running out so I pitch two last questions. What about meritocracy, I ask. Everyone had thought he would halt appointments based on political allegiance and consider more meritocracy. “I disagree, people have been chosen on meritocracy. If only I take the time to mention the number of people who refused to be appointed.”
Referring to the application fiasco at PBS in the selection process of news manager, he adds: “I disagree with this explanation,” and I comment that at the end of the day, the application process was completely ignored and another person who did not even apply was approached to take up the job.”
He looks at his watch and conveniently the tape recorder comes to a sudden halt. I thank him for his time, as he rushes off to his laptop to check his appointments.