Malta Today’s screaming headline that the government’s own estimates were not showing the much vaunted surplus the government was promoting caused some head scratching.
After clarifying the matter with the Finance Ministry, Malta Today explained that government will be able to report a surplus in their general accounts once they can report revenue from the sale of passports. That scheme alone is balancing our books.
That Malta’s books are balanced is in and of itself a desirable fact. It is not the only measure of success of a government and its administration of public finances. If it was, or if it was even rated as the most important indicator of success, we would go down the neocon dogma of ever smaller government.
There are obvious ideological objections to this idea but to stop at the logical exaggeration for the purpose of illustration, government would report an even better surplus if they were to tax people to penury or shut down schools and hospitals. That is where the other measures of a government’s success come into the picture.
You would need to look at the return on the money that is actually spent. How efficient is public expenditure? Is there waste that could reduce costs and therefore reduce the need for the extent of revenue being chased?
Is the collection of revenue equitable, progressive and efficient? Is everyone who should be paying taxes, doing so and is the burden distributed fairly?
Are the government fulfilling all their obligations? Do we have sufficient expenditure on front line public services? Are the civil servants who matter most – teachers, nurses, police officers – being paid enough to be motivate, rewarded and new people attracted to replenish their ranks?
Are we providing future generations of workers the right skills and resources to find employment in the future economy?
Is enough invested in our infrastructure to meet the increasing pressures of a growing population and a growing economy? Can people move around the country easily and at a reasonable cost? Is our energy supply secure and is its cost competitive with economies we compete with? Will water supply be consistently sufficient and of acceptable quality even as pressures of demand increase? Can our harbours and airport handle all that will be asked of them in the years ahead?
Are state incentives focused on streams of economic growth that will create employment in the years ahead? Are there antiquated subsidies for inefficient streams of the economy that are weighing down our development and growth?
Is our revenue base sustainable in the years ahead? How will our revenue from fiscal exemptions from the basic standards expected of a white-listed Western open economy change as we gradually comply with the standards expected of us?
Are we ensuring an equitable distribution of wealth or is the gap between rich and poor getting wider? Is proper provision made for the vulnerable in our society and are we ensuring the inclusion of all?
Is the ecological and wider environmental cost of our economic activities factored in the cost side of our national balance? Are we providing for the recovery of the losses caused by our carbon footprint and by the pollutants we generate?
We need surpluses in these considerations as well if we are to consider ourselves truly successful. Scratching beneath the surface we are reminded of the realities we should be confronting.
We still have a public sector with tires of fat piled up in the wrong places and particularly fattened by 5 years of a Labour government that reversed the strict austerity in public recruitment of the previous PN administrations and employed thousands to do the work that dozens did before.
We accept as a matter of course huge chunks of economic activity informally and illegally exempt of VAT, which by extension is automatically a platform for the avoidance of income tax. We also have a tax regime that refunds most corporate tax paid by companies to overseas shareholders creating loopholes for overseas vehicles covering for local beneficial owners. Our income tax collection remains disproportionately efficient in deducting from regular salaries but weak in the face of autonomous declarations of income.
Front line public services are underfunded, particularly education and policing. Front line civil servants are grossly underpaid and consequently our teaching and nursing corps are under-staffed, under-trained, under-resourced and unmotivated. This has a direct impact on the quality of life of the community and is a dark omen on future prospects as unaddressed problems are aggravated by neglect and indifference.
Public schooling is a slow leviathan, a sentient, oppressive counterweight to the genuine willingness of its components to innovate and drive education to relevance for our economic and cultural needs. New generations are forgetting the English language and cannot spell Maltese to save their lives. Their appreciation of technology is intuitive but superficial and ill-equipped for the depths needed by a technology-driven economy. Their work ethic is inconsistent and often short-sighted and self-centred.
We are nowhere near a solution for our internal mobility. Our goods take longer to move around, not to mention people. We solve our transport problem by widening roads a few metres a year; a bit like I solve my weight problem by buying bigger trousers every year. We refuse to confront the real issue we have which is that we have too many cars and that a freeze on growth (an unlikely thing in itself) will not be enough to start achieving normality. Ignoring reality has been official government policy since 2013. They froze increases in congestion charging sticking to 10-year-old rates which have become a nuisance rather than a deterrent. They froze managed-parking schemes allowing a free for all: the freedom to cry in despair and desolation for hours in one’s own car.
Even as we speak about a “major infrastructural program” imagination is limited to resurfacing roads so that we can be stuck in traffic jams on smoother surfaces.
There are no indications of any urban regeneration initiatives, and improvements to our ports, any increase in our trans-shipment capacity, any improvement in our international data connectivity, a completed fibre to every home program, a metred underground gas supply to households, a rehabilitation of rural roads and passages, afforestation and greening of public urban spaces: any infrastructural project of significance anywhere.
Our incentives to new businesses are often granted ad hominem prominently to businesses represented by the prime minister’s chief of staff. There is no discernible strategy of building new business sectors that have not already been started before 2013. Beyond the sale of passports there are no specific schemes to spin off new activities combining incentives with proper resource training in schools and technical colleges and infrastructural preparation for these activities.
In simple terms there is nothing analogous to the building of aircraft hangers, the enactment of attractive legislation and the training of aviation engineers that complimented the incentives that attracted major airplane repair industries here. As older business streams die out, there is nothing new to replace them.
There has not been a re-assessment of the operations of the state for some time. With the pressure from outside distracted by the revenue from passport sales our ongoing expenditure in certain areas has continued to grow without scrutiny. Spending on public transport has trebled but passenger numbers and customer satisfaction have not had the same return. The outsourcing of smaller hospitals comes with a massive bill but we do not see any evidence of any capacity to improve on the services provided. The list is obviously not exhaustive.
Sixteen percent of our households are exposed to poverty and yet their hardship is drowned in the celebrations of economic numbers that have no relationship to their lives. In place of a surplus, they experience a grotesque deficit where the basic need of a roof over their head is fast becoming unaffordable. The social housing program was frozen for 5 years by a government that consider problems when they reach a point of criticality with no foresight and no anticipation of future needs.
In their minds, the government have resolved the problem of poverty by redefining statistics and striking off thousands of families from a definition of vulnerability in spite of the fact that these redefined “middle class” families had less money on their table and higher bills to pay.
We consume fuel and electricity and generate waste without regard to consequence. Five years of a complete freeze on environmental policy means we are back to the point where we do not know how to deal with an overwhelming mountain of rubbish.
Climate change has left our political discourse quicker than it had entered it. Conservation of urban centres, preservation of historical heritage, reduction of pollution, protection of nature have been pushed down in a national political program that is indifferent to anything which does not yield a quick cash return.
This is a short list of the deficit of our public administration plastered over by the sale of our own citizenship to anyone willing to pay, exchanging our neglect, our lack of foresight, and our irresponsibilities for hard money. We anonymise our new fellow conationals because we all understand that in buying our citizenship, these people are betraying their obligations to their own countrymen, avoiding taxes and duties they owe to their own communities. We confound our sins with theirs and justify the duplicate immorality with the cash that changes hands.
The government dish out cheques in uneconomic schemes that spread the opiate addiction to the comfortable glory of the now. Instead of working on building a sustainable economy and a green country for future generations, the government focus on spreading enough cash around to purchase their re-election and unassailable confirmation in power.
This is the surplus we celebrate. We celebrate the deficit of our collective political soul.