Great expectations

There Is No such thing as betting on a sure thing in a general election. The next one due in Malta is still some 30 months distant. That is 140 times longer than Harold Wilson's declaration that a week is a long time in politics, ample time for what another British PM - Harold Macmillan - feared most: "Events, dear boy, events," he had replied laconically but with deep wisdom to a question by a young journalist what can most easily steer a government off course.

Nevertheless, there is a widespread feeling that, as in 1996, the election will be there for the Labour Party's taking. In terms of probability many suggest that the 2008 general election will be for Labour to lose.

The Nationalists would not agree. They gave themselves the advantage of change at the top. In Lawrence Gonzi they have a new leader who, in a switch of circumstances for the latter, is younger than Alfred Sant, his rival in the electoral stakes, is engaging and very determined to be his own man and to do well as Prime Minister.

Yet in 2008 the Nationalists will have been in office for 21 years, interrupted for a mere 22 months of Labour government (from October, 1996). They continue to play for all they are worth the scare card of the 1971-87 Labour years, as dolled up by PN spinners in a generally free run granted to them by the Labour side.

By the next election, the Nationalists' rise from the ashes in September 1998 will be almost a decade old. They will be dogged by the tune Dr Gonzi's predecessor as leader and PM used to plug in the 1981-87 period. It was natural for governments to change every ten years, Dr Eddie Fenech Adami argued.

PN spinners will strive to plug more insistently an alternative tune: that one should reckon the Nationalist government's life from 1998, not from 1987, and that Dr Gonzi only took over in 2004.

That will not alter the fact that, come the next general election, Lawrence Gonzi will have had a straight run of five years as deputy prime minister followed by another five as Prime Minister. He will still be young and hardly beyond his sell-by date. In terms of the burden of political responsibility, though, his actual and perceived baggage will be heavy.

To counter such threats the Nationalists will hope for a good economic run over the next two-and-a-half years. They will also play with abandon their second scare card, in the figure of the Labour leader and his brief premiership, at least as they depict Dr Sant and Labour's 22 months in office.

For all that, while not a few do hold that the MLP could be more certain of its chances in 2008 if it had a new leader, even if he were indeed some individual from the other side of the moon, the odds should be on it winning the next election.

Dr Sant, though careful not to take anything for granted, is certainly projecting that probability. He talks and acts as the prime minister-in-waiting, combining the role of an Opposition Leader who can outperform the Nationalists when they were in Opposition in relentlessly rubbishing whatever the government does or fails to do, with a projection of himself as the next PM.

That is all in accordance with the way the political game is played. It follows a clear strategy which, it is easy to tell, Dr Sant mapped out once he changed his mind after the crush of the loss of 2003, and re-contested and won the Labour leadership.

The Strategy began with absorbing the anticipated ridicule fired at him early on; then gradually slipping into a careful spin to light the future by dimming the past, suggesting the Nationalists would not last the course and call an early election; subsequently shifting gears into the current mode of government-in-waiting.

That mode runs a basic danger known to all strategists - peaking too soon. That danger should not be too strong when one is fighting opponents who have been long in office, with a Cabinet not even infused with new blood.

A major Opposition benefiting from circumstances such as those prevailing in Malta need not flirt with the premature-peaking risk. On the other hand it cannot just wait passively, waiting for the government to grow longer in the tooth, lose whatever energy it may still have, become more prone to error, to fumble and stumble.

Dr Sant would be the last man to adopt a passive attitude. Along 14 years as MLP leader, over 12 of which have been in Opposition, he has perfected the technique of shooting off with endless criticism and some proposals. In the style of today's media-suffused politics he does so to keep himself and the Opposition party in the public eye, and grab as much media space as can be from party and government opponents with a voracious appetite for it.

That Has Led to the (present) third phase of the Labour leader's strategy: to project the image of a government-in-waiting. That is being based on drawing up drafts of policies which would, in the months before the general election, be strung together into the MLP's electoral programme.

Whereas, in the context of the time he has now been at the helm, and two successive massive electoral defeats following the memorable Labour victory of 1996 action hot-words like 'new' and 'modern' have been quietly discarded, a different presentation is being made.

Policy drafts are now called plans, as evidenced by those for the environment and tourism adopted by the party general conference last weekend. Moreover, Dr Sant has taken it upon himself to set timeframes for a Labour government. They are not for actually implementing proposals and policies being emphasised now, but to come with definite policies for Labour to implement if/once returned to office in the next general election.

Underpinning this phase of the strategy is a projection of inclusiveness in policy formulation. Plan-formulation in Opposition, the MLP leader and MPs involved in the process stress, is being done in consultation with interested bodies and sectors.

Dr Sant undertakes that a Labour government would set up task forces together with the private sector, including three in the context of the MLP's tourism plan.

One Wonders whether vagueness is being combined with giving hostages to fortune. For instance, the first tourism task force, Dr Sant said, would examine, within Labour's three months in office, "the taxes burdening tourism". The Labour leader promised that within six months of taking over the Labour government would ease this burden and improve Malta's competitiveness. (The Times, January 30)

In recent months it appeared that the Opposition had identified why and where the tourism industry was burdened with taxes beyond what it has to carry. One puts it that way because taxes, by their very nature, are a burden on those who pay them. Finance ministers do not impose taxes because they are fiscal sadists. They raise revenue to finance public expenditure, albeit their governments do not always go on to spend wisely and properly.

Within its tax burden the tourism industry already benefits from a reduced VAT of five per cent in key areas, such as hotel accommodation and board. On the other hand restaurants, also part of the industry, have to charge their patrons the full 18 per cent VAT rate, including those in hotels when serving fare not in the full or half-board content. The MLP draft plan for tourism had suggested that top VAT rate is too high. A task force that includes restaurateurs will definitely say so, as their counterparts have been saying in France. Whether it would be possible, under EU legislation, to reduce the rate is another matter.

It is something else again whether it makes sense to cut taxes on discretionary spending - those who eat out do so out of choice. If a government can forego tax income the lower-taxable-income groups might feel they have a stronger claim for their burden to be lightened. Social justice might also suggest that a government, rather than cutting taxes, should use more of the tax take to ease the plight of those who live at or outside the margin of our society.

One would also wonder whether reduced taxes are passed on to the consumer in the form of reduced prices, thus impacting favourably on the cost of eating out. The example of imported wine suggests otherwise.

The Emphasis On raising competitiveness by reducing taxes gives the impression that reducing tax on profits is another area an eventual task force would examine. Hoteliers and restaurateurs would in the first instance hope they can achieve a profit, then that it would be taxed no less favourably than in the case of other sectors.

Were tourist industry profits to be taxed at lower levels relative to other sectors that would raise the question of horizontal equity and preferential treatment. One should always listen to the views of the stakeholders in a particular sector. They would, however, be interlaced with vested-interest considerations.

At the start and the end of the day it has to be the government that gets to the heart of any given situation, grasp the nettle, and act. Should it act in a manner that places marginal liri/euros into the pockets of a sector it would step into a field full of hornets' nests.

There would be multiple social and economic reactions.

I rather think that the stress on the burden of taxation in the tourism sector raises expectations of cuts in VAT and income tax which cannot really be satisfied. That can hardly be the considered intention of anyone who thinks things through within a serious economic and social context.

As likely as not, the intention underlying the Labour stress emanates from a widespread perception and complaints by economic activists that government-induced costs are (too) high.

In that case feedback from the tourist trade in the consultations carried out before the draft tourism plan was put up for general conference approval should have indicated which costs are felt to be too high. Specific examples could have been listed.

On the other hand to do so would let loose two birds of expectation with one throw. One would twitter within the tourist trade, expecting early meaningful slashes in tariffs, licence fees, and such like. The other would snarl harshly, for it would come from economic operators in every sector, whether export or internal oriented.

The fact that, by definition, all taxation - anything whereby the government takes money out of people's pockets to raise revenue, not in payment of some good or service - is a burden, means that if a government eases the burden for Messrs Tourism, Messrs Industry, Shopkeeper, and whoever else would demand the same treatment.

No task force can screen a government from such implications and repercussions.

Hammering Out policies and promising to be brisk about implementing them is what a major Opposition party, by definition the alternative government, and by self or/and popular assessment the government-in-waiting should be doing. Carefully, at the right time.

Timeliness is important, because policies to reduce revenue, to spend more, or both together have to be properly costed, if they are to convince. Once the financial implications of policy proposals are reasonably estimated, a party proposing to cut or raise revenue has to see to what extent this is feasible in the context of the economic and financial situation that it inherits.

It is one thing for a party to assert with confidence that it would manage the country better than its opponent, and quite another to give the impression that money will be left in economic operators' pockets, to induce them to do better.

Political positioning and strategy cannot be without risk. Measurement of such risk is what the plot is all about. Many will hope that the MLP is measuring well. Both in the garb of alternative government, to keep the government on its toes and shove it democratically when it is appropriate to do so. As well as a self- or popularly perceived government-in-waiting.

As much as Labour cannot afford to lose a third general election on the trot, it cannot risk winning but move into the grim reality of government carrying a self-imposed heavy burden. If a party creates misplaced expectations in Opposition, it could find it has sown the wind, only to reap the whirlwind in government.