During the past weeks, in this country we have wasted a great deal of effort and time discussing the VAT charged by government on the registration tax of imported vehicles, the water and electricity charges and immigrants. It bodes well for the Labour Party as these are three items which it has taken on as part of its agenda.

However, we have done this while the world out there is going through an economic recession, which many commentators have described as unprecedented in terms of its depth and its duration. This economic recession comes on top of the crisis in the financial markets which has destroyed all confidence, both at the consumer level and at the business level.

This does remind me a bit of Emperor Nero singing and playing his lute while Rome was burning. Admittedly the international recession is not yet having its full impact on Malta, but there are segments which have started to suffer. Tourism is one of them. The drop in tourism arrivals, which reflects the general market trend, is a direct consequence of the economic recession.

So is the drop in profitability experienced by a number of manufacturing forms that have resulted in shorter working weeks or the adoption of severe cost cutting measures. I would also add to these two factors the drop in government revenue, which in my opinion is a reflection of the international situation.

However, what if we did consider in an objective manner the three local issues mentioned in the first paragraph? By this I mean we should not consider them from a subjective point of view and certainly not from a parochial perspective polluted with a great deal of self interest. Let us consider them from a national economic viewpoint, which at times may be too crude for people's liking.

Let us start with the immigrants - be they legal or illegal. Everyone seems to have his or her own solution. I do not have one and what I have to say about the issue may sound offensive and callous. I do apologise for any offence caused. There are those who claim that we should send illegal immigrants away and not let any more come in. I believe that we need to understand that just as much as they are coming by the thousands on an annual basis, they are equally leaving by the thousands - either because they are sent back or because they find a way of moving on to another EU country.

Looking at it from an economic perspective, if we do send the immigrants away, can someone tell me who will do the low level menial jobs that most of them do? Do we appreciate that they are doing jobs that Maltese generally do not wish to do? Do we appreciate that they are doing jobs which would otherwise be economically not feasible if one were to pay so called Maltese wages? This might raise the point that we are exploiting immigrants from an economic point of view. We may be, and although there could be some problems to address from a social perspective, I believe that immigrants working here have not been bad for our economy because they are doing jobs that nobody else wants to do or doing jobs at a wage (if you can call it so) that is economically feasible.

We could turn to the issue of the VAT charged by government on the registration tax on imported second hand cars. The history ever since VAT was first introduced, shows us that the Maltese generally do not like to pay taxes on what they consume or purchase. This is because such a tax cannot be avoided. We seem to be happier paying income tax as that is much easier to evade. It is arguable whether one can charge VAT on a registration tax; but this places the matter on a legal platform. From an economic perspective, what if we do accept that no such VAT is charged?

If we do have to accept that no such VAT were charged, the government would need to raise revenue from other sources. This tax was easily identifiable and easily collected. Those that import second hand cars knew it was there and it was part of their cost. I do not want any of the tax that I pay to go into some form of subsidy of someone who imports a second hand car. It is unethical and immoral and highly inefficient from an economic point of view. In any case, it is not as if these importers have been very correct in their behaviour, given the number of imported cars that ADT impounded because their owners did not act according to law.

There is a similar principle when it comes to the water and electricity charges. The truth is that we were paying water and electricity charges that are below their real economic cost. One may go into the argument as to whether in those charges, there was also the cost of inefficiencies that may exist within the two service providers; however, I believe that such a trend of thought would take us nowhere. The claim for a discount on those tariffs by the 11 unions is counterproductive from an economic perspective, apart from leading to a gross injustice.

We should pay according to our consumption and, therefore, in terms of water and electricity charges we should pay for what we burn. What if we were not to accept this principle? The answer is fairly simple - the shortfall in revenue to provide water and electricity to our homes and business would have to be paid out of taxpayers' money. This would mean that we would pay according to what we earn, irrespective of how much one wastes.

I strongly believe that we need to accept as a country that there is an economic cost to be paid by the community as a whole every time someone puts in a claim like we have on the VAT on the registration of imported second hand cars and like the one on water and electricity charges.

What if the government were to accept these claims? It would have less money to spend to safeguard existing jobs (like it has been doing with a number of manufacturing firms) and generate new ones.

There is a trade off which we cannot run away from; like there is a trade off on the issue of the immigrants.

Moreover, is it economically correct that we have to subsidise someone else's swimming pool and air conditioning system and expensive car? Put like this, there is a trade-off as well, and in such trade-offs the question "What if?" becomes very pertinent and relevant.