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From union to Labour | Manuel Micallef

Former union man Manuel Micallef believes the key to the success of a future Labour government is its ability to kick-start economic growth. The question is: how?

james
James Debono
8 January 2013, 12:00am
Manuel Micallef finds a 'new' home inside Labour - photo: Ray Attard/Mediatoday
Manuel Micallef finds a 'new' home inside Labour - photo: Ray Attard/Mediatoday


The self-styled "moderate" Manwel Micallef openly clashed with the "militant" faction of the General Workers Union when he unsuccessfully challenged Tony Zarb in 2005 for the post of secretary-general. Today, he feels perfectly at home in Joseph Muscat's Labour Party.

Perhaps Micallef always cut a figure apart from his mates inside the GWU. With looks not weathered by the ravages of manual work, a stylish demeanour made more conspicuous by his coloured spectacle rims, Micallef's image was miles apart from the surly figure that Tony Zarb cut, with his rasping shrieks beckoning workers to stand up to government. His fall-out with Zarb seemed to have cemented the direction chosen by the union: none of the cosmetic diplomacy of modern politics, but salt-of-the-earth militancy to keep government on its toes.

Reflecting on the events of seven years ago when he was "attacked" by the so called 'militants' of the union for being a moderate alternative for the position of security-general, it is now Labour which fashions itself as a moderate, yet progressive, outfit. But Micallef thinks that although the GWU has changed in a positive way in the past few years, the change is not as radical as that of the Labour Party.

"If I were to compare the pace of change in the General Workers Union with that in that in the Labour Party, I would say that the Labour Party has changed at a faster pace than the union. The Labour Party is no longer what it used to be. Under Joseph Muscat, the party has changed radically by changing the 'mentality' of its supporters, making it more inclusive.  When Joseph Muscat was elected many ridiculed him for saying that he would bring about an earthquake in the party. But this is exactly what happened in the past years."

But hasn't this transformation of Labour into a mere copy of the slick PN machine, albeit a more palatable option than the Labour of yesteryear?

Micallef admits that both parties have today become "centrist" and that "ideology" is no longer a key factor, replaced as it is by "pragmatism". But Micallef still sees key differences between Labour and the PN.

"The PL believes a lot in the welfare state. But we no longer subscribe to the view that this should come at the cost of those who are already well off... Our priority to lift those at the bottom upwards remains there, but not by bringing others down." 

When Micallef was deputy secretary-general, the General Workers Union was the only trade union and social partner to oppose EU membership in 2003. Was he then comfortable with this stand?

"The GWU was not in principle against EU membership. But it had pointed out that in the circumstances of that particular moment in time, the disadvantages outweighed the advantages."

But was Manwel Micallef's personal opinion in 2003?

"I used to see both the disadvantages and the advantages... when I spoke in the general conference on this subject I called for a serious analysis and avoided taking a stance completely in favour or against."

But when further pressed to state whether he was for or against membership, Micallef does not give a decisive reply, simply saying that what counts is the present and not the past.

"I am in favour of Europe and am happy that Malta is part of the European Union... this is all water over the bridge. We should now focus on being the best in Europe."

His fallout with the "militant" faction in the union prompted the widespread perception that Micallef had changed his political allegiance and became a Nationalist. There then followed Micallef's foray in the TV world with numerous talk shows and then as head of news at Favourite Channel, softening the image of the union man that would later become the Labour candidate of Muscat's new generation of politicians. "I was never a Nationalist but am known to be a very tolerant person. That is my character and I was always willing to give my contribution whenever there was an opening."

His centrist conversion to Labour still evokes a rift between the traditional core of left-wing union beliefs, with the more business-friendly outlook of the new Labour he is joining. One recent controversy which underlined the growing consensus between the two major parties, was the opposition to increasing the minimum wage over and above the cost-of-living-adjustment as recommended by Caritas.  

Micallef justifies this reluctance to touch the minimum wage due to the "ripple effect" this would have on social benefits and other wages. "What Joseph Muscat said is that we need stability... we should not rock the boat and create waves which put this stability at risk."

But would this simply mean that the aim of the next Labour government would be that of retaining the status quo? Micallef insists that this is not the case. 

"We should first increase wealth in the country through economic growth and then we would be able to increase social benefits and the minimum wage. In this way Muscat is being responsible. Everyone agrees that the basic wage level should increase but we have to do this at the right time, without undermining economic growth."

But would not increasing the minimum wage put more money in the pockets of those on the lower end and at risk of poverty, and increase their spending power in a way that this would have a positive impact on the economy?

"I understand that this argument has a certain validity, for example, by injecting money in the economy and leaving more money in people's pockets, which is also the logic behind the tax cuts announced in the budget. But the government had promised to enact these tax cuts in 2009 and even the tax cuts envisioned in the budget fall short of the promise made before the 2008 election."

So is it socially fair to decrease taxes in a way which would mostly benefit high-income earners, as happened in the last budget which Labour also intends to retain?

"I don't think that it was fair to think solely of this category of taxpayers... what we should eventually consider is to revise the tax bands in their entirety."

But Labour seems to have accepted the tax cuts promised in the budget when it committed itself to keep the framework of the present budget if elected to power.

"I understand this... but it is positive that we depart from the mentality that we should demolish whatever has been erected by the previous government. While retaining the framework of the budget, Labour will remove injustices like the imposition of income tax on single people earning a minimum wage.

"Eventually, it will be in a position to revise the tax bands but only after kick-starting economic growth."

But how exactly can Labour kick-start economic growth? According to Micallef this is the reason why Muscat is so business-friendly.

"Joseph Muscat is often criticised for giving a lot of importance to businesses and entrepreneurs... in reality he is stating the obvious because it is entrepreneurs who risk their capital to create jobs. One cannot ignore these key players simply because they have capital and money, just to favour workers. We need to help them diversify and to create more jobs."

Micallef instead blames "bureaucracy" for hindering both local and foreign investment.

"We are not re-inventing the wheel. We have already done this in the financial and gaming sectors. What we are saying is to facilitate growth in other sectors."

But concretely what kind of "bureaucracy" would Labour remove?

The first example that comes to Manwel Micallef's mind, is the Malta Environment and Planning Authority.

"Instead of reforming MEPA we have created a monster which is criticised by developers, architects and environmentalists alike."

He lambasts MEPA over its double standards claiming for taking 14 years to process an application for a shopping complex in Hamrun, and only a few months to process a similar development in Qormi - referring to PN donor Nazzareno Vassallo's new supermarket endeavour.

But is there a risk that Labour's rhetoric against bureaucracy masks an intention to disregard environmental standards in its bid to kick-start economic growth?

Micallef insists that this is not a question of standards but a question of efficiency. "What I mean is that planning applications should be processed in an acceptable time-frame while standards are strictly adhered to."

Next week Labour will finally present its plan to reduce utility bills. But Micallef insists that it would be "a mistake" for Labour to make turn this issue in to "its sole electoral battlecry".

"Our roadmap includes a number of proposals which are equally as important."

As regards the utility bills issue, Micallef firmly believes that concrete measures already proposed by the social partners and constituted bodies years ago can be taken to alleviate the burden on business and families.

"One of the proposals made by the social partners was to spread out the impact of inefficiencies on the bills over a longer period of time. For example, there is the impact of higher bills on tourist operators. Despite the record number of tourists, they are still not reaping the returns they would expect in such circumstances."

But is there a risk of a shift of the burden from bills paid by the consumer, to a greater deficit which is ultimately paid by the taxpayer?

Micallef points out that there are clear safeguards against this, due to increased EU scrutiny on the country's budget. "Ultimately one has to find a balance."

So how can the country afford to reduce utility bills over and above the commitment to retain the tax cuts announced in the budget?

"This would be possible if we have economic growth... this is the key to everything."

What will be the major challenge of a Labour government?

"Joseph Muscat says that Malta should be the best in Europe. This is not a cliché. He wants quality of life in Malta to be coveted by other Europeans.... To reach this aim we need a solid and dynamic economy in a fast-changing world which does not allow us to depend on one particular sector."

But does not the present government have a merit in weathering the international economic crisis and sparing Malta from the fate of other countries like Greece and Spain?

Micallef questions the validity of such a comparison, pointing out that Malta's financial institutions and banks followed a completely different philosophy than that in these countries. "Even our way of doing business is different. It is the inner strength of our businesses and institutions, which has cushioned us from the impact of the crisis. What the government has positively done was to encourage and consolidate these strengths."
james
James Debono is MaltaToday's chief reporter on environment, planning and land use issues, ...
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Carl Matthew Camilleri
Kullhadd xortih hu Manwel. Ghax ma tghidilnix xi haga fuq il Malta Shipbuilding fejn int kont tahdem. Bhal per ezempju x'kienet ir reazzjoni tieghek meta harget l-iskema taht il gvern nazzjonalista.