They make it sound like a country’s economy works in the same way as a household economy

Published: July 7, 2017 at 2:29pm

What a shame economics is not a mandatory part of the school curriculum. Then everybody would know that the economy of a country is not like the economy of a household.

In other words, there is no ‘up and up and up and up’. There is only a cycle of boom and bust, with the seeds of the bust inevitably sown at the start of the boom. Sometimes we are lucky and the bust is just a mild recession confined to one country. And sometimes we are unlucky and the bust is a crisis which triggers full-blown recession which spreads across continents – though, of course, not from Malta.

When Malta’s economy goes bust, or slows into recession – which is a matter of when and not if, because it’s not called ‘the economic cycle’ for nothing – we will suffer alone on our two small pieces of rock.

So now the National Statistics Office has been turned into another branch of the government’s Department of Information, issuing government propaganda in partisan language.

No wonder they forcibly removed Michael Pace Ross, the National Statistics Office chief, just 20 months into their stint at world domination, back in late 2014. He wouldn’t play ball.

Mr Pace Ross certainly would not have played ball on this matter. It’s a shame the press isn’t doing its job properly instead of just reproducing state propaganda verbatim. The National Statistics Office press release, which has been reproduced by the newspapers, was published earlier today on its web portal. And if you go to that source you will see that rather than covering the ‘first quarter’ of the year, as suggested, it covers the period 1 January to 31 May, and the statement’s tagline is actually: “In January-May 2017, Government’s Consolidated Fund registered a deficit of €2.6 million”.

But – and here is where the press should be doing its job – if you go back to April you will find that the ‘first quarter’ statistics had already been published by the NSO back then, but they showed a deficit and not a surplus. and now in order to achieve ESA 2010 compliance they have been reworked and show a surplus.

The Introduction of the European system of national and regional accounts (ESA 2010) changed the way EU member states are obliged to treat their accounts. So you have to wonder what exactly is going on here.

If Frank Lucas ran Malta, we’d have a surplus too. And something tells me that the main reason this government doesn’t change the law and enter the heroin trade has nothing to do with morality and everything to do with the backlash in Europe and the collapse of its support base back home.

6 Comments Comment

  1. Stephen Forster says:

    I give up, honestly. The rank incompetence of newspapers to challenge bullshit from the regime is nothing short of criminal itself.

  2. Godfrey Leone Ganado says:

    A month ago, Profs Scicluna said that growth in the first three months of this year was the lowest in 13 quarters (3.25 years) and that GDP growth slowed to 4.2% from just over 6% in 2014 and 2015.

    As you rightly say, the economy never keeps going up and we already started going down the slope after the economic success launched by PN governments.

    In normal circumstances, the rate of decline is slowed down by new sustainable initiatives coming on stream. However, the PL government has created nothing of sustainable substance over the last four years.

    The results that have been published by the NSO point clearly to factoring in of ESA 2010 which is dealt with in another comment and which turned a deficit into the much boasted about surplus.

    What I wish to highlight is that Compensation of Government employees has increased by Euro 18.3 million in the first 3 months of this year. If we annualise this number, it will equate to Euro 73 million and this does not include the jobs for votes scheme which, at an estimated 2,000 would cost the taxpayer an additional Euro 24 million.

    One must also highlight that additional spending on Government employees contributes to GDP growth and therefore the employment of unnecessary Labour distorts the GDP besides boosting employment and unemployment statistics.
    Let’s not forget that Government’s boasting of unemployment going below 4% was the result of creating a scheme by which employment went artificially down by 600.
    This is typical of the Mintoff Labour corps and KMB’s 8000 jobs for votes.

    One other key statistic which government boasts about in percentage terms, is the debt ratio. The reality about this is that in four years Government debt has gone up by just over Euro 1 billion and there are no solid projects/investments to back up this amount.

    Also, government guaranteed debts have increased by Euro 950 million over the last four years. Part of this is the guarantee of around Euro 360 million for Electrogas, the power station company which has a capital of just Euro 10,000 and which Government has an option to buy back at Euro 450 million.

    • Major Tom says:

      The Labour party has been deliberately using the words ‘deficit’ and ‘debt’ for years as if they mean the same thing.

      That creates a basis for spin. Unfortunately, the Nationalist Party never really embarked on an educational strategy to ensure that most people understand the words being used.

  3. Major Tom says:

    Excellent article. I am not that sure that the first sentence would imply the second.

    On the other hand, some economics, accounts and media studies should be mandatory. Those who wish to understand but had gaps in their formal education, just like myself, should make an effort to learn the basics that allow one to listen, read and watch actively.

  4. callixtus says:

    I wouldn’t bet on the collapse of its support back home. Given the results of the last two elections, I’m convinced that most Maltese would be more than happy to enter the heroin trade if they knew they could get away with it. And morals be damned.

    • You’re probably right. In fact, one of the issues I have with the legalisation of drugs is that the Maltese would enter the market with vicious enthusiasm, competing to ‘grow’ their market share.

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