My thoughts exactly

The Times, Wednesday, 12th November 2008
Editorial
Muscat chooses to play to the gallery

Opposition leader Joseph Muscat and Finance Minister Tonio Fenech had one thing in common on Monday – they both wore a blue tie. For obvious reasons, this must have hardly gone unnoticed among diehard political enthusiasts, but the blue tie was just about the only thing they did share. Most of what Dr Muscat said in his marathon reply to the budget speech ran diametrically opposite to the views held by the Finance Minister and his government, and indeed Mr Fenech lost no time in demolishing key arguments made by Dr Muscat when he gave his reaction to them shortly afterwards.

Dr Muscat was evidently keen to appear as politically objective as possible, repeating what has now become one of his favourite mantras, that he was tired of the senseless pique and that he was eager to steer a new course in politics. Well, judging by the way he tackled his reply, his urge to steer this course, shared, it must be said, by thousands of uncommitted voters, does not seem to be all that consistent. Indeed, to all intents and purposes, the body and tone of much of the reply were mostly political, as was the manifestation his party held in Valletta on Sunday. Wisely, the social partners, strongly at odds with the government over the rise in the water and energy tariffs, immediately saw through Labour’s move and turned down its invitation to take part, with the exception of the GWU. The trade unions now plan to hold their own demonstration on Friday.

As expected, the Leader of the Opposition focused on the energy tariffs and made what he considered as proposals aimed at tackling the issue. The social partners in the Malta Council for Economic and Social Development had urged the government to postpone the effective date of the rise to April next year, but Dr Muscat went even further than this. He called for the withdrawal of the tariffs, arguing that since oil prices were back to 2007 levels, the hefty increases were not needed. The Finance Minister has been explaining all along that the corporation bought refined oil, not crude, and that its price was still high. In any case, in view of the difficulties which the recession abroad was expected to bring about, the government preferred removing the subsidy and investing in the economy to save jobs. Some governments abroad have opted for a stimulus of this nature rather than giving tax cuts.

Dr Muscat made some good suggestions which could perhaps be taken up, if this has not been done already. For example, it is quite obvious that all efforts should be made to reduce inefficiencies at the energy corporation. However, other proposals he made in his speech can hardly be tackled overnight and could not therefore be given as a solution to the problem the government is facing today. Dr Muscat does not appear to have taken the wider angle of the economic situation well enough in his assessment of the situation, and the references he made to the ill wind blowing from abroad were far too brief and superficial. True, in view of such ill wind, the sharp rise in tariffs has come at a critical moment but, as already pointed out, the government has preferred to give the economy an investment stimulus than opt for a tax cut higher than that announced in the budget.

Finally, it takes a great deal of political courage for the leader of a party that has resisted change over vital matters to the island to say, just eight months after losing the third consecutive general election, that the people want a new direction. In his first real political test, Dr Muscat appeared far more interested in playing to the gallery than in giving an objective assessment.