After serving for 16 years as the permanent secretary in the finance ministry, Alfred Camilleri has decided to call it a day and retire. He will be replaced by Paul Zahra, another senior civil servant with vast experience navigating the corridors of power.
Those who have worked closely with Camilleri in the last few months were not surprised about his decision to retire. They argue that his dedication to his onerous duties meant long hours of intensive work to ensure that public finance was managed appropriately.
The fact that different administrations trusted him to lead the finance function is testimony of his professionalism.
In a country where many seem to wear politically tinted glasses to express opinions on almost every subject, it is not surprising that some partly blame Camilleri for the excesses of expenditure in public projects launched in the last nine years.
The role of a senior civil servant is not to define policy. It is to advise on policy before politicians approve it and then implement it loyally whether one agrees with it or not.
If this principle is accepted, then Camilleri’s performance at the helm of the finance ministry must be judged as successful. The failures of good governance in the last two labour administrations must be pinned on the Labour administration that approved policies that lacked transparency, accountability and the duty of care to defend taxpayers’ interests.
Upright civil servants know the limits of their authority. The electorate hands political authority to administer the country to the party elected to govern. Civil servants then must implement political decisions. Camilleri and his successor, Zahra understand well this underlying principle of public administration. Their strength is their ability to work with politicians effectively by advising on and then loyally implementing political decisions.
Zahra enters the scene at a difficult time. The main short-term challenges are inflation threats and sluggish growth due to the recent medical and geopolitical emergencies that have hit the global economy.
Over the next several months, the government will have to start focusing on slowly withdrawing the support given to the business community and households in the last 30 months. The state of public finances may be still at acceptable levels. Still, no government can keep using taxpayers’ money for much longer to protect the community from the adverse effects of negative economic developments.
The longer-term challenges relate to the needed reforms in the country’s tax policies as a result of developments in how large countries view tax-friendly jurisdictions that promote tax avoidance. The closure of the greylisting incident is not the end of the reputational challenges the country faces.
Zahra also needs to convince political and business leaders that the sooner Malta opts to find new competitive advantages to attract investment, the more that public finance will be sustainable.
Another major challenge for Zahra is to show determination in promoting tax compliance and enforcement. This task will be made easier by the fact that his boss, Finance Minister Clyde Caruana, has already indicated his commitment not to treat tax defaulters with kid gloves.
Changing the guards at the finance ministry comes at the right time to stimulate a rethink of the country’s economic model.
The global economic and geopolitical environment demands a new mindset from both the political policymakers and those who advise and then implement their policies.