Roadmap to nowhere | Kristy Debono

Budget 2016 seems to offer little foothold for an Opposition keen to rebuild itself as a serious alternative government. But Kristy Debono – Nationalist MP and economist – argues that Labour is only reaping the fruits of the former government’s successes

raphael_vassallo
Raphael Vassallo
18 October 2015, 10:00am
Last updated on 19 October 2015, 8:31am
PN MP Kristy Debono
PN MP Kristy Debono
At 34 years of age, Kristy Debono is one of a number of ‘new’ Nationalist MPs who consider themselves (as she soon tells me) to be the party’s future. 

At present, however, this ‘future’ remains uncertain. Still reeling from the effects of an unprecedented voter haemorrhage in 2013, the Nationalist Party knows it has to claw back some 18,000 lost votes to have a fighting chance by 2018. At the risk of oversimplifying matters, that chance also depends in part on a poor performance by the present government.

Yet all seem to concur that the government’s economic performance has been anything but poor. Broadly speaking, Budget 2016 was well received by most of the players on Malta’s financial/economic circuit. The Chamber of Commerce, the Small Business Chamber (GRTU), the Malta Employers’ Associations and various trade unions. 

Does this also mean that the tide of popular opinion is turning against the PN, on the one area – economic management – that it has always considered itself on top of the game? 

Kristy Debono certainly doesn’t seem to think so. 

“No not at all,” the economist from San Gwann assertively replies. “As a party, we definitely acknowledge that economic growth is still going strong. But we also acknowledge that there are three factors behind this success. The first is that the foundations for all the major economic sectors were all established by the previous government. So yes, the Labour government today is reaping the rewards of economic foundations laid by the previous government: such as the gaming industry, the IT industry, financial services, the maritime sector, aviation… all these sectors are doing well, but we have to acknowledge that this was the vision of the Nationalist Party that brought them about in the first place.” 

Another factor – which Debono argues the Labour administration studiously avoids acknowledging – is the lack of external pressures of the kind that plagued the last years of the Gonzi government.

“This current administration is not facing any external obstacles like the ones faced by the previous government: the international financial crisis, the instability in Northern Africa. So when we weigh all the factors, it emerges that everything is working in the government’s favour in terms of global economic conditions… things are working well for this government, and also for the country as a whole.”

But this, she quickly adds, also robs the present government of any excuses not to deliver even more.

“Given this current positive economic climate, we expect much better from the government when it comes to the economy. This government does not have to worry about sky-high price of oil in the energy sector, for instance. On the contrary, the price of oil is currently at an all-time low…”

And yet the global situation may not be as rosy as Debono makes out. She seems to be suggesting that there is no longer any political instability in North Africa. But this does not stand up to scrutiny. The situation in Libya is arguably much more unstable today than it was even during the mass evacuations, in which Malta played a major role. Politically, Libya is divided among two rival governments: much of the country is lawless, and in the hands of extremist rebel groups…

Debono raises her hand to clarify her earlier point. “What I meant by stability was that developments in North Africa and elsewhere sometimes have repercussions that affect us directly…”

Is that a reference to large numbers of asylum seekers?

“Not only. International events can trigger an immediate shortage of oil supply. So the price of oil shoots up, as it did in the last years of the former government. This is not happening at the moment.”

This brings us to an argument that the PN has repeatedly raised in recent months: i.e., that local prices of fuel should be lowered to reflect the current international price of oil. 

At the same time, however, the international price of oil is notoriously volatile and subject to sudden, mammoth fluctuations… as Debono herself acknowledges, with her reference to the previous price hikes under Gonzi. 

What would happen, therefore, if government lowers the fuel prices, as demanded by the PN… only for the price of oil to suddenly shoot up again for unforeseen reasons?  Would the local fuel prices have to be jacked up again to reflect the international price? And if so, wouldn’t that inject a dangerous dose of instability to the local economy?

“First of all, we need much more transparency in the way government is hedging. At the moment, government seems to be totally non-transparent when it comes to certain contracts, to the issue of good governance even in oil trading. This is why we ask to see the contracts. Show us the contract of Shanghai Electric.” 

This newspaper has in fact repeatedly made the same request editorially, but to no avail. Yet this only underscores an irony in the PN’s position. We had also asked to see hedging contracts at the time (and even before) of the oil corruption scandal in 2013… only for the ministry to refuse, citing ‘confidentiality clauses’. I get the impression sometimes that the PN is quick to criticise others, over issues where it had been equally guilty in this day…  

“I disagree. Even when it comes to public contracts, the Nationalist government was much more transparent.”

Even if everyone agreed on that – and many would disagree – there’s also the question of simple pragmatism. Isn’t it slightly irresponsible to be urging the government to amend the price of fuel with each international fluctuation… given how frequent (and often drastic) such changes tend to be? 

“When it comes to price fluctuations, we’re not saying that we expect energy prices to drop by 60%... because that’s how much the international prices fell by. We’re not saying that at all. But we are supporting proposals made by the GRTU, the Chamber, the MEA – but especially the GRTU – that the price of energy for businesses should at least drop by 30%...”

Over and above the 25% they have already fallen by? If so, that’s a drop of 55%... which is not too far off the 60% mark.

Debono however suggests that this line of questioning is missing the point. “What I would like to stress is that, at the moment, the international price of oil is the same for all countries. Yet when it comes to the local price of diesel and petrol: our price of petrol is the 21st highest in the EU. There are 20 other European countries where diesel is cheaper than Malta. In the case of diesel, there are 18 EU countries where it is cheaper. This doesn’t make sense. We are exposed to the same external factors as all other countries, yet we are paying a higher price… just for the sake of paying a higher price. Is it an incentive by the government so that we will be enticed to use public transport because we can’t afford to use our cars?”

That’s an interesting point, especially considering that the Nationalist Party also criticises government’s handling of the traffic issue. Let us assume, for argument’s sake, that the real reason for government’s refusal to lower petrol prices is to create a disincentive for private car use in a bid to reduce traffic.

“That is in fact what Edward Scicluna said this week…”

Precisely. Does the PN disagree with the idea of disincentives for private car use? The reason I ask is because the PN also argues that the present government has no plan to reduce traffic… yet at the same time, it seems to be urging a measure – cheaper petrol – that would translate into more cars on the road, and therefore more traffic. Is that what the PN wants? 

“Not at all, especially when the reality is that the public transport service is a complete disaster, which in turn means that we really have no choice but to use our cars. If you asked me: would you rather if the government, instead of giving a bigger subsidy to private transport operators Autobus de Leon, subsidised the bus fares? It could be a pilot project: something I have been mentioning for over a year. Instead of subsidising the operators so heavily, why not invest in your own people? For the first year, or six months, people could use the public transport for free, so that we’d instil a positive cultural change…”

The finance minister, she adds, is now toying with the idea of free bus fares during rush hour. “I’ve been mentioning this for over a year. However, I could never agree with a situation where public transport is in a total shambles, traffic is unbearable… and yet, we increase the price of fuel so that people have no choice. It’s like choking people financially. It doesn’t make sense.”

While we’re on the subject of traffic: earlier, Debono opined that the successes of the present government could all be attributed to policies enacted by the PN. But couldn’t the same also be said for the present government’s failures? Traffic is a very good example. This problem did not just materialise out of nowhere in the last three years. I remember a time when former Prime Minister Eddie Fenech Adami used to regularly cite car ownership as a gauge by which Malta’s economic development could be measured. That was back in the early 1990s. 

It could be argued, then, that past PN governments enacted a policy to encourage more car ownership, directly contributing to today’s traffic levels. So wouldn’t it be fair to say that the present government is facing a problem that was actually created by PN?

“First of all, I don’t believe owning a car is a problem. It is a commodity designed to make life simpler. And I don’t think it was ever a matter of policy to increase cars on the road under the Nationalists.”

And yet that is what happened, whether it was an official policy or not…

“But still: even if the problem of traffic did not suddenly start in the last three years… no one can deny the fact that it has never been this bad before. Anybody who has lived in Malta for the past 15 years will agree that it’s never been as bad as it is today. Even Edward Scicluna, even the Prime Minister, now agree that traffic has become a major economic obstacle. I don’t recall anyone saying that in the previous administration.

Well, it depends on one’s memory. I also remember when former Public Transport Association chief Victor Spiteri claimed on Xarabank – around 10 years ago – that there were studies showing that traffic, “would reach gridlock in 10 years’ time” (i.e., today). He has been proved right in this prediction. 

So isn’t it the case that the former Nationalist government ignored this problem until it reached crisis proportions, and that the Labour government now has to clean up the resulting mess?

Debono however counters that the traffic problem is not solely about the number of cars on the road… but also about government vision and planning.

“I think the fact that the road management and infrastructure was so much better before than it is today… I believe it was, yes.” [Here she is reacting to a quizzical look on my face]. “In this legislature, all the government has managed so far is work on the Coast Road, which the PN had not finalised. In a whole legislature, I don’t expect that the government would only manage to complete one project – the Coast Road – and maybe, if we’re lucky, the Kappara junction. Even when it comes to planning and investment in infrastructure, I believe we are on a downward spiral. The situation is deteriorating at a very fast rate.”

Prognostics for the near future also suggest that government work on road infrastructure is likely to fall behind further.

“According to the budget, Kappara junction will begin at some point next year. It could be January 2016, it could be December 2016… we don’t know. It will also take 24 months to be completed. That, at least, is what government is proposing. There is a big difference between proposals, and reality… just bear in mind that the power station was supposed to be ready in two years, and works haven’t even begun yet. Meanwhile, in the budget, Minister Scicluna said that there won’t be two projects carried out at the same time. One can ask, then: will works on the Marsa junction start within this legislature? I doubt it, because if the Kappara junction will take two years minimum… assuming it starts next January, even though government hasn’t committed itself to a date… most probably the Marsa junction will have to wait until the next term. So yes, I am convinced – and say it with a clear conscience – that the previous government was far superior when it came to road infrastructure and management.”

Debono here reminds me that success in this area was also one of the key promises that won the Labour Party the March 2013 election.

“Let us not also forget that, when the Labour Party was still in Opposition, its two major promises were a ‘roadmap’, in particular about public transport and infrastructure, and the completion of a new power station in two years. So government actually placed all its eggs in that one basket, and so far they have failed miserably.”

That may well be true, but it doesn’t reassure us that the PN would be any more successful. Debono mentioned one example herself: public transport, which she describes as a ‘complete disaster’.

The description is apt, as even I can confirm from my attempts to use the service. But the PN had also tried to reform public transport, and the results were hardly any better. How would she react if I put it to her that, given its own disastrous record in the same department, public transport is one area where the PN is certainly not in a position to criticise?

“I am definitely not going to defend the public transport reform under the previous administration. It left much to be desired. However, when it comes to pounds, shillings and pence… under this government the taxpayer is paying three times as much in subsidies, which have now reached €30 million. One would expect, then, that the service should be three times better than it was before. And definitely, it is not…”

Perhaps. But at the same time, the implications of Debono’s assertion are also a little bleak. It would appear that traffic – and public transport in particular – is a problem that is simply beyond the capabilities of either party to solve… even if both parties consistently project themselves as the ‘solution’ to all Malta’s problems.

So why should today’s electorate trust the PN more with regard to this issue… when it was just as incompetent in its past efforts as Labour is today?

“I wouldn’t say it is ‘beyond’ the capabilities of the Nationalist party. However, I would personally much rather if this issue had never, ever, ever been politicised. I acknowledge the government’s successes in certain sectors – for instance, financial services – because there was always political consensus. However, let us not forget the major electoral pledge by Joseph Muscat, when in opposition, that he had a ‘roadmap’ for public transport. People voted for that pledge; they believed in that promise. People hoped that there was this vision. But evidently, there is no vision in place today. That is why the Opposition feels the people have been deceived. There is a big deceit in all this. They literally tried to make us all believe that they had this magic roadmap, when they very clearly didn’t.”