Prosy points (26)

When VAT was being introduced, I was pilloried from right and left for saying the tax would cause more problems than it would solve. No, I was told, VAT is the most efficient system by which to tax services and to control tax evasion.

Yet, evidence from abroad showed how high VAT evasion was and is. Last month the government increased VAT rates by a fifth, from 15 per cent to 18 per cent.

The prime minister laments the huge amount of VAT evasion. Most people know about it from their own experience.

The latest report from the state auditor informed us that even government departments fail to report their transactions for VAT purposes. Raising VAT rates will fuel more evasion, which will increase pressures to raise VAT further.

A tenuous concept

When problems arise about the construction of roads around the Tal-Qroqq hospital - an integral part of the project - an ad hoc mediation committee chaired by Georg Sapiano considers the matter. Contractors are represented by a partner in Dr Sapiano's firm. He sees no problem with this arrangement.

The Foundation for Medical Services, charged with the overall Tal-Qroqq project, insists it has no mediation committee other than that laid out by its contract with Skanska and partners.

In a system where the rule prevails: you scratch my back while I scratch yours, conflict of interest becomes a very tenuous concept.

Gozo inertia

Over the past year in Gozo, the loss of productive jobs - in manufacturing and tourism - has been very worrying. The puzzle is that there has been little public concern. The vision of considering Gozo as a specific region, to be dealt with according to its specific characteristics in order to promote development, has been sidelined. Inertia is the order of the day.

Shortfall

Some three weeks ago, in this column, I sketched the financial framework for Malta's relations with the EU this year. This was not meant to try and "undermine" our membership status: a recent The Times editorial stated such status must be an article of faith. However, what will our financial exposure be during the first year of EU membership, since the government claims that the public deficit is basically being caused by social welfare?

On the basis of official figures for 2004, there will be a cash shortfall with the EU, to the detriment of the public budget, running close to Lm20 million. There was no rebuttal of this estimate. One must assume that it is correct.

Assignment of workers

The way by which Drydocks and Malta Shipyard workers were assigned to government departments and local councils is shameful.

People have been treated as if they were blocks of wood to be shoved from here to there without prior warning or preparation. Overnight, local councils were asked to absorb manpower for which they had no time to work out action programmes.

Total confusion prevailed regarding what jobs workers seconded to here and there could be given. The most important thing in the exercise was to enable the minister concerned to boast about how effective he is in carrying out government "policy".

Plan

Unless a plan is drawn up to regenerate the economy, more and more jobs will be lost. It is the government's duty to come to grips with a depressed economic situation for which it is largely responsible.

We are caught in a vicious triangle of unemployment, taxes and rising debt, about which the Fenech Adami administration, obsessively concerned with EU membership, remained indifferent.

Now that it has secured what it wanted, there can be no more valid excuses for ignoring the priority of urgent action to get the economy moving again.

The wall

The story about the Roman wall uncovered in Gozo's cathedral is curious. The planning authority wants to cover the wall back, because it was brought to light without its permission.

The Church authorities would like to proceed with their excavations. Beyond insisting on applying regulations to the letter (at least in this case), the "environmental" and planning agency should examine what is in the interest of the national heritage.

Paris-Berlin axis

There is an inherent advantage for Germany and France to collaborate in their international dealings. It goes well beyond the pulls and tugs that make up the European Union, such as on the management of the eurozone.

The Iraq conflict has demonstrated that, even outside European affairs, the two major countries of the European continent are finding that their interest guides them towards similar conclusions. Will this last?

Whatever happens, European policies will be written according to the proddings of a Paris-Berlin axis, which no matter how defined, will seek to assert itself. This is not necessarily a "bad thing" for Europe or the rest of the world.