A good budget, well received. And Labour plans backdated chaos.
So Joseph Muscat and his party of quacks plan to vote against the budget regardless, because you know, it’s traditional and who gives a flying monkey’s cuss if this means that people don’t get the benefits as long as they get the power even sooner.
Muscat knew up beforehand that it would be a good budget and that voting against it would make his people look bad and selfish, so he came up with another of his Cunning Plans: tell the electorate that the Opposition will vote against the budget but then use the good things in it when they are the Government.
Ah, so that’s all right then. Well, if you have a mind like addled cheese, that might convince (and yes, there are plenty with minds like addled cheese and who will believe anything that shores up their decision to vote Labour).
That’s not how these things work.
I never cease to wonder at the way the Labour Party, time and again, with leader after different leader, speaks, acts and theorises as though the economy is something static, locked in a cupboard, or a textbook case which begins with ‘all things being equal’ in one of their A-level economics classes.
If this budget fails, the current fiscal rules will stay in play not until the next election, but until the next government works on its own new budget, presents it to parliament and has it approved. This will likely be as late as April.
This means – how can Muscat and his brilliant toy-shop owner Labour Business Forum chief Marlene Mizzi not know this, is it possible? – that nobody will buy real estate, cars or any of the other things mentioned in the budget before then. They won’t because they have been promised some excellent advantages in this budget, won’t be getting them because Labour plans to vote against, and will then wait to see what the new budget will be like in late spring.
Worse than this, Muscat said that he will ‘backdate the changes’ in his April budget, so that people don’t lose out. The insanity of this, its detachment from how business works, is almost beyond belief had we not known that this is the part of CET and the nightmares of import substitution.
Muscat has said repeatedly that he plans to be safe for business, and here in his first major move he has done the exact opposite: taken strategic action to ensure that key elements of the economy dry up for several months, with a knock-on effect throughout, and then trying to patch that up by making it worse with ‘backdated changes’.
How does he imagine that businesses will administer these backdated changes? And why should they, anyway? More to the point, does he really believe that people will carry on selling their houses (and buying them) and paying more tax until April, saying merrily that it’s OK because Joseph will give them their tax back?
No, obviously they won’t. They’ll just wait and see what happens in April and not take any risks. And that’s just the real estate.
This morning, I received the following email from somebody I know, with the subject-line: L-ewwel patata tal-Labour fil-gvern, u ghadhom lanqas biss bdew
To further compound the uncertainty, Muscat stated that he will retain the ‘good points’ of the budget – that is, COLA, wage and allowance increases, tax cuts, reduction in vehicle registration charges etc when [if] he gets into government, which should be end February at the earliest, and then work out a new budget, present it to parliament, have it debated and approved – which should take us to end April, and that he will backdate the changes to the 1st January.
Alarming news for employers in the private sector, for property buyers and sellers, buyers of motor vehicles, as also for the various authorities and government departments which would still have to continue doing things and paying and charging as they do now, then work out and settle the extra back-pay and refunds back-dated to 1st January from the eventual PL budget approval date.
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And then in April/May next year, we will have the Alfred Sant re-run “Malta, Sibna Hofra” (on the lines of Houston, we have a problem) and we cannot implement Budget measures ; strongly suggest belt-tightening.
Issa naraw bil-budget b’kollox ta’ Tonio Fenech, il-lejla jinghatax vot ta’ sfiducja mill-Kunsillieri ta’ GonziPN ! jekk Simon jirbah, mhux biss dan ikun vot ta’ sfiducja f’Tonio Fenech, izda wkoll fil-ministri KOLLHA hlief wiehed, li KOLLHA bbakkjaw lil Tonio Fenech !
All true except for the fact that the budget will not pass only if someone from the government’s side or the independent MP votes against it.
They don’t necessarily have to vote against it for the budget not to pass.
If one or both vote against it, the budget does not pass.
If one abstains and the other votes against, it will not pass.
If one abstains and the other votes in favour, the budget passes with the vote of the speaker.
If both abstain, the budget will not pass as even with the speaker’s vote, it won’t have a majority.
Many scenarios, and we’re dealing with MPs with a grudge and a personal agenda, so anything’s possible.
Labour has been put in this unusual (to say the least) position by none other than Franco Debono, and perhaps Pullicino Orlando.
If these two vote in favour of the Budget, Labour can vote against it to their hearts’ content without having to face the resulting confusion in April.
Well said, Daphne.
As if I’m going to risk my capital taking into account the new incentives as a given (loved the new regime for vintage machines, nice one Tonio) and trusting Joseph with the design philosophy.
Funny how the discussion has settled onto Joseph’s methods.
Or better, how GonziPN does he intend to be? This is mad.
Spot on!
Only in Malta do we accept such economic ‘reasoning’. Stand up comedians abroad would have a wealth of jokes for months on end.
Remarkable. Little Joey has begun to screw up the economy even before being elected. Now that’s talent.
if the budget is that important (which it is), and everybody was aware of Franco’s reasoning the responsible way to go about it was to dissolve Parliament in say September / October and this budget would have been presented by the party in government with no problem at all.
Malti, the budget process starts around March and continues to develop in summer while you’re sunbathing on the beach.
How trivial can we get?
In the golden years there was no consultation process, no MCSD, no COLA and the budget was decided in a matter of weeks by the one and only; cabinet was not even consulted, cabinet meetings were rare.
The closest you can get to a Labour Budget is the 1998 Budget presented by a half baked banking employee, where property tax was introduced and high water and electricity bills were thrown on everyone without helping “il-batut”, and were fees had to be paid for “free medicines”.
The only Maltese Prime Minister to work under the scrutiny of the EU is Lawrence Gonzi , he’s the only one who is dealing with the EU to get more EU funding, he is politely asking for more.
I’m sure Joseph would use the veto to get his “more”, he’s in the class of Franco.Joseph doesn’t know how to go about it, so threats will get him what he wants.
Just an other reminder , Joseph was the one who suggested the use of the veto on the illegal emigrants’ problem we had some years ago.
We have yet to see how the Labour Party will ‘work’ in the EU context. I am stating this just to remind you that they never worked under the scrutiny of the EU (read: “Il-barrani”).
Yes, he’s all loving, Harry,
I have a contract coming up in January. The measure to do with 12% final witholding tax or 35% on the capital gain means I will save €2,500 with the new budget – what’s it going to be, Joseph?
Will you backdate the capital gains tax initiative or remove it? Or what?
This is what you get from a simple mind. It reminds me of Lou Bondi’s article many years ago, ‘Portmoni economics’ or something like that. Joseph Muscat – A village mentality from a village idiot.
Right now you have the option to choose between the 12% FWT and the 35% on profits for a seven year period.
This budget is going to extend this to a 12 year period.
If you left the contract for the 7th year and 1 month its not Joseph’s fault but actually your QahbuMalti.
If this scenario you are saying is true you didn’t do your homework right!!!!!!
And in the meantime:
http://www.timesofmalta.com/articles/view/20121129/budget-2013/pl-considering-options-for-minimum-wage-earners-not-to-be-taxed.447426
No wonder the PL is a party which appeals the the most short-sighted people in the country.
Stop press. Joseph Muscat will implement budget measures retrospectively. With interest. Personal interest.
Valid points.
The Labour Party is just unbelievable. Not being able to write a decent electoral programme (not even in draft format), they have come up with a Cunning Plan V2.
They do not need to bother to prepare a budget after they mob Castille. They will take Tonio Fenech’s work and just implement it. Or so they say/think.
They have no idea that the revenue side in the budget equation will not add up as the main ingredient will vanish – people’s trust and hard work to keep taxes flowing.