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Raphael Vassallo

Vive la revolution!

Tonio Fenech now appears to acknowledge his government was economically (if not also socially) irresponsible to raise those tariffs the way it did.

Raphael Vassallo
6 March 2012, 12:00am
How very curious, that the government would “rather cut expenditure than raise tariffs”… when the only serious expenditure it actually cut was precisely Enemalta’s subsidy...
Ever get this weird impression that we are going round in circles? Not just in the ordinary sense: i.e, that the planet we all call home (well, most of us, anyway) is steadily revolving around its own axis at a rate of exactly once every 24 hours.

No, I refer to an unmistakable logical fallacy whereby one first departs from a premise (which he later defends tooth and nail) only to perform the mother of all circumlocutions to end up precisely where one was before the whole argument even started.

And that is the distinct impression I just got reading an interview given this morning by Finance Minister Tonio Fenech, on the subject of Enemalta's finances.

I was particularly struck by the following quote:"Economic growth can only be sustained if energy prices are at the very least reasonable. Even though oil prices are surging, I cannot in any responsible manner hit the economy with higher tariffs. It would drain the economy by hurting productivity..."

Hmm, how very odd. I could have sworn I heard that line of reasoning somewhere before. Now where could it possibly have been? Of course! It was at a public protest against the energy tariffs, organized by all the social partners in February 2010: you know, the entire FORUM of trade unions, minor political parties, NGOs and sundry other associations/societies that, taken together, come to be known collectively as 'civil society'.

Yes, that's right; the very civil society our Prime Minister suddenly wants to 'listen to'.

Makes you think, doesn't it? Why does Dr Gonzi want to listen to civil society only now? Why did he not listen to civil society when it got together at City Gate in 2010, and loudly demanded a downward revision of the same utility tariffs that even his own finance minister now concedes may be too high?

Had he only listened, this is (roughly) what he would have heard:

1.  That it was socially responsible to raise utility tariffs by a staggering 195%, betraying government's deep-rooted insensitivity to the sort of problems faced by ordinary people and small businesses alike.

2. That the same tariff hike would hurt economic growth and productivity, by dramatically increasing the recurring expenditure of precisely the type of micro-businesses that form the main motor of the Maltese economy;

3. That contrary to government's claims at the time, there was no overriding external reason to cut the subsidy - no threat of infringement proceedings by the European Commission, for instance. The only reason given was that government decided that Enemalta could no longer expect to benefit from a €55 million subsidy, because... erm... the money was needed elsewhere.

Strangely - given the fact our Finance Minister now seems to agree with all of these points, bar none - his colleague Austin Gatt  had openly rubbished and ridiculed them all at the time. His response was to hurl a defiant challenge to all those who disagreed, urging them to come up with a detailed plan on how his government could remove the Enemalta subsidy without raising either tariffs or taxes.

Then as now, the question is not exactly very difficult to answer. You could start by cutting down on other areas of government expenditure which are less necessary and more wasteful than an energy subsidy: for instance, €80 million on a parliament designed by the most expensive architect in the world.

Next up for the chopper, an utterly unjustifiable €15 million spent annually on university stipends; followed by any number of utterly superfluous retainers and consultancy fees, routinely paid out to pretty much the same old coterie of stooges... oh, and while I'm at it, you might also want to resist any temptation to simply augment your own salaries without telling anyone, especially at a time when you are also insisting that everyone has to make 'sacrifices'.

And oh look: what an extraordinary coincidence! Tonio Fenech has just came up with almost exactly the same answer it his interview this morning: "We'd rather cut expenditure than raise tariffs. If I need to make further expenditure cuts to support Enemalta at this point, the priority is that."

Well, well. How very curious, that the government would "rather cut expenditure than raise tariffs"... when the only serious expenditure it actually cut was precisely Enemalta's subsidy... resulting in the selfsame utility tariffs that Fenech himself would prefer not to raise?

I hate to say it, but like all circular arguments, this one simply does... not... compute. The gap between the government's declared intentions today, and the actions it actually took four years ago, is simply too wide to be reconciled through anything but flawed logic. And to be perfectly honest, I haven't even touched on what is by far the greater fly in the ointment.

Look at this way: Tonio Fenech now appears to acknowledge that his government was economically (if not also socially) irresponsible to raise those tariffs the way it did. And at the same time, he is also concerned with the rising international price of oil.

Which raises a rather inevitable question: if Fenech is really concerned with rising cost of oil... WHY DID HIS GOVERNMENT CHOOSE PRECISELY HEAVY FUEL OIL FOR THE DELIMARA POWER STATION?

Not only does this decision - which incidentally has never has been properly justified or explained - keep our country almost 100% depended on precisely the same fossil fuel that Fenech now fears may soon be beyond our means as a nation... but it also involves the most polluting variety of the same fuel, with serious environmental and health implications for the future (not to mention for the government's recurring health bill, which means more expenditure in future, etc.

And again, these are all arguments that a large section of civil society had almost shouted itself hoarse trying to bring through to the Prime Minister Gonzi's attention at the time. But to no avail. He wouldn't listen back then, when he still had the chance to actually halt all this madness. He only wants to listen now... when the damage is already done, and the fat crackling merrily away in the fire.

But hey! Let's not end this little blog on such a pessimistic note. Let's look at the bright side of things for a change: Gonzi did after all acknowledge that he himself was wrong and all his critics right. And it only took him four measly years, too!

Ganni Borg
Well said, however, rather than attacking individual capabilities, the issue in Malta is that every Minister ends up being a puppet in the hands of the government. Puppets are only tools in the hands of their masters!
eddy privitera
Prosit Raphael ! Tonio Fenech kompla kkonferma kemm huwa veru meta ivvintaw il-frazi: " FLIMKIEN KOLLOX POSSIBBLI " ! lesti li anki jirridikolaw lilhom infushom, jekk hemm bzonn, biex forsi jakkwistaw xi ftit voti ta' xi " CWIEC MALTIN " !!!!!!!! Eddy Privitera
Andrew Spiteri
A brilliant analysis which can be synthesised into 4 words : MINESTERIAL INCOMPETENCE and ARROGANCE. This is the man , a junior accountant ( with very little experience of big accounts, which used to be handled by the partners in the firm he used to work for, not Tonio Fenech -) whose incompetence and lack of experience at manageing really big jobs- like the country's finances and corporations - is coming through like a beam in deep darkness - at our expense I must say! Fenech is turning out to be a prime example of a ' cuc malti ' !! How very ironic.
Gecko
Realising a mistake and going full circle may be all well and good in the general scheme of things. But the fact remains that so much time is lost in the process - and with time of course - money. If this had happened once one might overlook it but there have been so many somersaults in this administration that one is hard put to even start counting them. Millions have been lost because of obtuse decisions and hard headedness which come from lack of prior consultation. Somebody has to carry the political responsibility for all this. In my view, that somebody is the whole administration. Nothing and no one could possibly be worse than this!