Labour’s blast from the past | Karmenu Vella

He’s been branded a left-over from the ‘bad old days’ of Labour, but former tourism minister Karmenu Vella prefers talking about today’s bad times instead

He’s been labelled a dinosaur in the Labour camp, and accused by his opponents as burdened with a questionable political heritage from the Dom Mintoff era. 

An architect and civil engineer by profession, Karmenu Vella insists that his 35-year political career is far from over, and argues that both his political and entrepreneurial experience has made of him a “man with a lot to contribute” both to the Labour Party, and to the country.

Hours after Joseph Muscat announced that Karmenu Vella was to be the man who is to draw Labour’s political manifesto, he was bludgeoned by the Nationalist Party media.

While seemingly unfazed by the media onslaught, Karmenu Vella however expresses his disappointment at a number of government MPs who, “ought to know me better, rather than appear on TV and slander me as some kind of political hooligan.

“If anybody wants to criticise me let him do so, but let it be honest criticism, as it seems to be convenient for some to forget that I was also a minister between 1996 and 1998. Besides my track record in the tourism sector, can anybody accuse me of being some kind of political thug during that time I held office?” he asks.

His frustration vented, Karmenu Vella accepts to move on and focus on the issues at the core of local politics right now.

On divorce, Vella rejects the PN’s accusation that Labour is simply playing to the gallery.

“Joseph Muscat’s position on divorce is very clear and consistent. It’s not the party’s position. In fact there will be no party position, as everybody within the Labour Party – be they MPs, delegates, members or voters – are free to express their opinion and vote in a referendum according to their conscience without being pressured by a party position or decision,” Vella said.

Stopping short of declaring himself in favour of the introduction of divorce, Karmenu Vella argues that although he doesn’t wish to go through a divorce himself, he cannot exclude that a minority may need it.

“I feel that I cannot take the ‘I’m alright, thank you Jack’ attitude on this,” adding that “divorce should not be a luxury, but perhaps a medicine that could help an otherwise irreversible problem.”

He counters the religious side to the argument by asking if Catholics should dictate for non-Catholics and assume that everyone in Maltamust belong to the Christian faith.

“If I am a true Catholic, why should I be afraid of divorce? Because if I was a true Catholic and my marriage failed, then I assume that I would not resort to divorce, even if it would be available.”

On the political front, Vella criticises the PN’s approach to the issue after the party was sent into disarray by a private members’ bill presented by a government MP.

“The PN seems to have unilaterally decided that if the majority of parliamentarians are in favour of its official stand, then citizens should not be consulted for their opinion, but if the majority of parliamentarians are against the PN’s stand, it then wants to seek the people’s opinion, hoping that it overturns the parliamentarians’ decision.

“As I see it, it’s a clear case of ‘Heads I win; tails… we toss the coin again,” Vella said.

But could divorce become a political matter for Labour to weigh when preparing its manifesto for the next general election, should the bill fail to be approved in parliament?

Karmenu Vella takes a slight pause and replies that it’s not as easy as one may think, warning that he doesn’t believe that divorce should become a crucial electoral issue.

So what will Labour fight on during the next election?

“Labour will stand its ground on good governance, and ensure the people get value for money for the taxes they pay in every sector,” he says.

So what are you promising the electorate?

“Labour must not promise anything to the electorate, except making it clear that its main direction would be that of ensuring good governance across the board.”

Could you explain better?

“One of the first tasks of a new Labour government would inevitably have to be a thorough assessment of the true state of public finances,” Vella says, adding that  “Labour’s strategy to address the structural fiscal deficit and consequent rise in debt is based on two pillars – ensuring that economic growth is reflected in government revenue flows, particularly by implementing measures that encourage tax compliance, and secondly by reducing expenditure requirements by enhancing efficiency in the public sector, increasing the effectiveness of public funds, and cutting down on such things as excessive bureaucracy and wastages.”

He insists that Labour in government must be more efficient and more effective in the public sector.

“Raising productivity is not only an objective restricted to the private sector, but equally applies to the public sector. To achieve this we need to have clear targets and clear performance measurements where success is measured against targets and not simply against the previous year’s results or worse still in terms of expenditure as is the philosophy of the current government.

“We see a great possibility of reducing public expenditure through better cost control on projects rather than through the reduction or elimination of projects themselves. We need to be results-oriented and not simply boast about how much funds were spent in particular areas. A case in point is the government’s expenditure on health and education where despite significant expenditure, even in excess of most EU countries, the results achieved were among the poorest.

“Public spending needs to be shifted from non-productive into productive areas that can give a better return to our economy,” Vella argues.

So how does Labour plan to reduce public spending?

“Most of the government’s public spending is coming from taxpayers’ contributions. We therefore have to ensure that the taxpayer is getting good value for his money. We aim to achieve such efficiencies in public spending also by means of a more accountable and transparent Public Procurement Process.

“Enhancing the Public Procurement Regulations is a high priority. Under Legal Notice 296/10 and its Schedule 3, a number of Government Corporations are avoiding their tender publication and also avoiding the award process from going through the Department of Contracts.  Such practices leave much to be desired, particularly since such public contracts are awarded and managed without any scrutiny whatsoever.”

In May last year, Labour proposed a parliamentary motion to discuss the way forward and  strengthen the role and responsibilities of the Department of Contracts on the basis of what was recommended by the Auditor General in the investigation undertaken on the Delimara Power Station controversy.

“To date Parliament has not yet found the time to discuss such a motion, which would truly help to instil better procurement controls in the Public Sector. This clearly shows a lack of priority for government in putting transparency and accountability into public procurement, which is so crucial for cost control and effectiveness in public spending.”

Karmenu Vella is adamant in his view that government inefficiency and incompetency are two major liabilities, and asks if it is in the taxpayer’s interest that government still hasn’t paid some €33 million in tax refund claims over which a high rate of interest is being paid.

Talking about taxation, how does Labour plan to reduce taxes?

“Tax adjustments should be carefully considered and could act as a very useful tool to encourage people to work more and businesses to invest, which in turn stimulates economic activity and hence contributes to achieve higher revenue flows. From an economic point of view, I really believe that a series of well-planned tax adjustment measures could have a real positive effect on economic growth.

“Initial revenue decreases through such measures could be ploughed back as a result of the ensuing increased economic activity, thus creating avirtuous circle. Furthermore, an increase in total tax revenues could be further achieved through business-friendly tax adjustment measures aimed at enticing more investment and discouraging non-compliance. This will generate positive spill-over effects from: higher indirect tax revenues, such as VAT and excise duties, as a result of higher consumption; higher corporate tax revenue from a larger number of enterprises; higher revenue from personal income tax resulting from favourable effects on labour market conditions as a result of stronger economic activity.”

He goes on to insist on Labour’s “belief” that what is important is to have clear objectives and priorities.

“Tax amnesty schemes may raise revenue in the short-term, but ultimately undermines revenue in the medium term because of moral risk, while poor governance is also another important factor that needs to be tackled to stem revenue losses.”

Apart from economic and revenue considerations, Karmenu Vella believes that a decrease in taxation could be more viable if more attention is given to alternative sources of revenue.

He says that government could have better managed the nation’s land resources.

“When Fort Cambridge was offered through a public tender, government managed to get some €27 million, but then it gave away 200 tumoli of land at White Rocks without a public tender, which remains one of this government’s major scandals. Similarly, a tract of land worth €25 million was somehow forgotten and granted to Telemalta’s new shareholders as a result of an oversight or a misunderstanding in the contract!”

And how does Labour plan to have enough revenue to sustain welfare state?

“I believe that what I have said earlier fits like a glove into this issue, because economic growth and financial efficiency ensure that all segments of our economy can contribute as best as they can towards the development of our social welfare state.

“The objectives and measures I highlighted earlier would contribute to restore health in public finances, which is necessary to sustain welfare programmes, and we firmly believe that economic and financial stability go hand in hand with a sustainable social development. If we want to maximise our economic growth potential, we also need to ensure that the creation of wealth is well distributed and enjoyed by as much as possible a wide segment of our society.”

Vella states that if a Labour government works hard enough towards achieving its targets and  eliminating wastage, cutting down bureaucracy, avoiding overruns, meeting timeframes and evading costly delays; introducing more transparent and fair tendering processes; sustaining balanced economic growth; increasing revenues through a more favourable taxation setup; reducing unnecessary government expenditure and increasing its effectiveness; stimulating both local and  foreign investment; then a more sustainable welfare state will be possible.”

Labour has been quite vociferous on the burdens sustained by families following the increases in water and electricity tariffs and petrol. Would Labour bring them down?

“We could, and we can,” is Karmenu Vella’s prompt reply, stressing thatalthough rising prices of crude oil on the international market have become a serious threat to our economy, which is heavily dependent on this commodity and its by-products, a higher cost of energy and fuel products is badly affecting the country both economically and socially.

He adds however that government cannot keep blaming the international price increase.

“The difficult situation we are in is not entirely the effect of external price of crude oil, but partly also a result of bad governance and wrong policy decisions taken over the years by various PN administrations.

“In 1996, we had employed hedging instruments to purchase oil, but a PN led government decided otherwise, saying that hedging was equivalent to gambling, and this decision has cost us millions, and now government has started to hedge again for the purchase of power station fuel oil for energy conversion and not against the purchase of other petroleum products such as petrol and diesel as the IMF recommended.

But when it comes to giving examples as to where a Labour government could bring energy prices down, Karmenu Vella explains that one litre of unleaded petrol currently sells at €1.31. This price includes a cost of 43.5c crude oil; a cost of 16.5c to refine, store, transport and distribute; and 71c local government charges, 4c of which were raised in the last budget.

“If we address the government induced charges (71c) then yes, we can reduce the burdens on our families,” Vella says, adding that the same could be done on water and electricity, where Enemalta’s cost calculation includes another local charge which covers the amortisation of all the plant and equipment of the power station which has to be recovered from the consumer and not regarded as an infrastructural investment by the government.

He insists that consumers will benefit from a clear energy policy, particularly an alternative energy policy which has been inexistent for years by the current government.

If this is a taste of Labour’s forecasted political targets in government, does Karmenu Vella see Joseph Muscat’s ‘progressive movement’ a continuation with Mintoff’s times, given his own presence in the team?

“No, I do not see any continuity whatsoever. I think that Malta’s past 50 years has seen a number of different leaders, different parties, with different ideas and different policies in different times, local conditions and different international scenarios.

“All these moments achieved different results and set different milestones. I cannot see any continuity between Borg Olivier, Fenech Adami and Gonzi, and likewise I cannot see any continuity between Mintoff, Mifsud Bonnici, Sant or Muscat.

“I dare say that anyone who tries to compare what any present leader or party would have done in yesterday’s scenario will, in my humble opinion, be comparing oranges to apples.

“I might be a bit biased on this, but how many Maltese would be prepared to consider Lawrence Gonzi to be a better leader than Dom Mintoff or Eddie Fenech Adami?”

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Exactly what is Karmenu supposed to have done wrong when being an MP or a Minister. May the PN spell it out and may they do so away from parliament, the cowards' castle? Mintoff and Vella may not have been perfect (who is?) but no one would dare accuse the Mintoff administration as lacking in initiative, courage and imagination. I imagine Malta's political history under Fenech-Adami and the even less charismatic Gonzi will merit little more than a footnote. The major 'crime' of Mintoff when PM was his success in telling the country's elite where to go. Malta needs another down-to-earth leader with the guts to take on the country's power-brokers.
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Every good Politician will have mud and shit slung at him. Its the weak and sneaky one that escapes such personal vandalism.
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Luke Camilleri
Kollha GHIRA! Kemm jixtiequ ghandhom imqar wiehed bi stoffa u kapacitajiet bhal Karmenu ta' Gonzipn! Prosit Karmenu, keep up the good work and looking forward to more feathers inyour cap! : )