Facing the stark truth

Government’s decision to absorb all the energy increases and retain price stability on fuels by reducing government expenditure elsewhere, is perhaps best described as living in denial

Fuel (File photo)
Fuel (File photo)

The government’s decision to absorb all the energy increases and retain price stability on fuels by reducing government expenditure elsewhere, is perhaps best described as living in denial. It is simply a mistake.

There is nothing wrong about being sensible on spending money. But reducing budgets is another matter altogether, more so when everyone knows that a small price hike is more than justifiable in the face of what is happening in the world – the war in Ukraine is no forgotten episode.

And everyone knows that Europe is bracing itself for a hard winter with spiralling electricity and gas prices. This will have an effect on lifestyle and spending power. Travelling to the Mediterranean for example, will be more expensive or less attainable for starters.

The price of fuel for cars in some cases is double that of Malta in Europe. Which is why it makes no sense to continue subsidising the price of energy – surely passing on 15% of the price increase to the consumer will not lead to a breakdown in the social fabric of our communities, and one can always exclude the vulnerable from these price changes through some form of voucher system.

These decisions must be tackled by Robert Abela and his finance minister Clyde Caruana. They need to think strategically, and not electorally.

Things are not going to get better, and when recession will hit, it will strike at the lower income earners and work its way up.

The failure of Abela and Caruana to transfer some of the pain of energy prices to the consumer will only put more pressure on the government’s coffers and budgets.

Government’s economic activity and willingness to sponsor initiatives is a key component to driving the economy. A diminished presence of government in the economy will lead to a depressed feeling, something that all business people know very well is key to their success or failure.

*  *  *

Every family gathering or dinner party or get-together turns to two subjects. No one talks of the Nationalist Party to start with; most would robotically lift their shoulders up and down and roll their eyes and say – ‘What Nationalist Party?”

That would come as no shock to Bernard Grech, who is still in his caravan somewhere in Europe. But that does not mean that they are happy with this government.

There is a general consensus that Malta has lost the plot on construction, its cars and roads frenzy, and its treatment of foreign workers as either simple tenants or delivery-men. The absence of decent wages for Maltese workers, means we have created an economy to suit a uniquely greedy mindset: keep reaping in the profits, as long as wage costs are driven down. Enter the ‘third country national’. I don’t mean this as a xenophobic rant. I don’t believe that foreigners “take jobs” away from Maltese – they don’t.

But we placed an economy on steroids that needs a constant supply of cheap labour. And that can come at a cost too – on the housing market, the infrastructural services, and of course, some cultural hiccups, like... untrained servers inside restaurants, and other workers who struggle to speak English (let alone Maltese...).

So we are operating on full throttle and in the meantime we have created a scenario where all unskilled or partly-skilled jobs are being taken up foreigners – construction, waiters, health workers, cleaners, bus drivers, fishermen, and agricultural workers; while the other itinerant multinationals that bring over their finance and gaming companies, employ their own crop of foreign, highly-skilled workers.

It is a vicious circle. Where do we fit in? Are we just responding to this influx by keeping our pedal on the metal and feeding the construction business, or just raising rents to heat up the market even more? Not to mention the environmental degradation we are precipitating.

This economic vision was created by Joseph Muscat, welcomed by many, myself included, because it seemed to invite success and wealth to society. It has turned out to be quite short-sighted. There was much to be fixed in 2012, especially for business. But now there is a lot of frustration, and desperation to get out of this country landlocked by its own ugliness. It is a virus that is threatening Gozo too.

And with unattainable property prices, low-income workers face a steep ladder to obtain this kind of peace of mind. Some economic thinking, which I feel is severely lacking, is needed now, by the best minds, not some interested party, to map out a new future, fast.

*  *  *

The Steward hospitals deal has gone on for too long. There is hardly any justification in keeping them on board anymore. Their contribution has been underscored by the mammoth contribution of taxpayers’ money to operate something we could do better and far cheaper.

Apart from the fact that the company before them, Vitals, swindled the Maltese taxpayer of millions thanks to the one-sided deal conjured by the Muscat administration; a pure con act in which a group of nobodies presented themselves as health gurus.

Today everyone in government conveniently blames Konrad Mizzi... collective Cabinet responsibility seems to have flown out of the window. Especially now. But if there is a fuck-up with the Steward deal, which includes some of the old Vitals management, it is this government’s fault that we are where we are. They have to fix it.

Abela and Chris Fearne must take the difficult decision to terminate the Steward deal now, and fight a battle in the courts. Steward has not respected its side of the bargain; nor was the deal with them made in good faith.

The Vitals swindle is perhaps far bigger than any scam to have hit this country. And yet the people who masterminded the finer details of this embezzlement get greeted like kings and keep raking in thousands by offering exclusive financial advice.

They need to come clean on this once and forever. The Steward deal gives this country nothing.