Spend and get richer

On March 31, 1939, Governor Bonham-Carter gave a dinner party at which a prominent Maltese baroness sat on his left. At the time the government was about to introduce a sort of eco-tax. The baroness attacked the Governor about rates and complained that, as her family owned four houses, to have to pay one shilling one penny in the pound on them was simply dreadful and would ruin them.

Governor Bonham-Carter pointed out that on the Valletta house the family might have to pay seven pounds and on the house in St Paul's Bay very little as it had neither refuse-removal service nor drainage. The baroness, however, was not convinced and said "that all she wanted was to be left alone and to be allowed to look after her soul for a time in peace before she died!"

Needless to say, this eco-tax was not introduced. This little amusing extract, taken from The Bonham-Carter Diaries 1936-1940, edited by John Manduca, immediately came to mind as I read the reportage about how the Maltese public bodies are reacting to the proposed eco-tax in 2004! It also shows that the Maltese haven't changed much in 64 years have they?

At time of writing this article, the government has back-pedalled and postponed the law's introduction until some accommodation as to its implementation is reached.

As in the case of the anti-smoking laws, this proposed eco-tax, which can do us all a world of good in the long run, especially if it becomes more all-embracing, seems to hang in the balance. This is despite the fact that a year's yield is barely enough to cover 50 per cent of the cost of the Brussels gin palace, a mere Lm4 million compared to Lm9.5 million.

It appears that eco-tax has been met with a great deal of disproportionate opposition. One member of Parliament even had the temerity to write that this law would force us to live like the Taliban! I would recommend that he reads The Bookseller of Kabul before making such a statement.

I am convinced that should one ask the average man in the street today what he thinks of the eco-tax, his reply would very much resemble the baroness's. He may not use the same words; however, to most people a tax of any sort is a headache and a bore. Most people actually do wish to be left alone and die in peace without worrying about what they are leaving or not leaving to their progeny and having to invent and conjure up all sorts of financial gyrations and contortions in order to leave the taxman as little as possible!

These goings on reminded me of a book I was once given by a close, well-meaning friend as a joke called Spend And Get Richer; hence the title for this article.

I tried to ferret it out but I must have lent it to someone who must have been equally perplexed by its unusual logic as I was at the time. I clearly remember there being some sort of method to its madness and, if carried out on a grand scale, yes, one did spend and get richer.

An episode of the now long discarded and outmoded Dynasty comes to mind wherein this odd creed was followed to the letter. Blake Carrington was about to go bankrupt and in order to impress his rivals and bankers he threw the most magnificent party and bedizened the female members of his family with enough jewellery as to make even the late lamented Shah of Persia blush! Mr Carrington's plan worked and he did indeed obtain the extra bank financing to pull off one of the greatest business coups of all time.

So, at present the eco-tax with its drop in the ocean return, is on hold as seem to be many other things in this beleaguered isle.

If the government found it so difficult to push a Bill through which is, firstly, environmentally beneficial and, secondly, not all that much of a burden (what's Lm4 million a year between friends?), I cannot imagine it ever attempting to reform the rent laws or tax vacant property, which is held for speculative purposes. Can you?

A couple of weeks ago I had made a joke about how Dr Gonzi would explain his way out of the national debt to the EU Commission and how when Euronews were sent to cover the riots it caused, they went to a marc ta' filghodu (morning band march) by mistake. That was merely Kenneth being flippantly tongue in cheek.

The odd thing was that many readers stopped me in the street to ask me whether 1) it was true or 2) whether I had actually heard a rumour from the PM's office that taxes on empty property would be introduced in the next budget and that the rent laws would be brought up to date. I felt I had taken on a role of a Cassandra in reverse. Inventing a prophecy that everyone believed instead of foretelling the truth that was cursed to be believed by nobody!

I am not in a position to comment about a tax on empty property and will leave that to experts like the Housing Authority or the Lands Department to work out precisely how lucrative an action it would be.

If my hunch is right, the annual income would allow Malta to buy up half of Mayfair and not a mere apartment block in Brussels. What I will comment about is the hardship that the antiquated rent laws have caused these last 50 odd years.

Hardship on the owners of the properties in question who are paid as little as Lm2 or Lm3 per annum for an eight-roomed house in a desirable area. When families like the baroness's (and there are still plenty like them around whether titled or not) are still saddled with properties like this, no wonder she was worried about being ruined by a Lm7 tax!

Then there is the burden on the environment. When, by a fluke, these properties are handed back to the owner, the only thing they can do, especially if the property is undivided, is get rid of it like a hot potato. Ergo, this is why the Sliema Front looks like it does.

Nobody in his right mind can actually call it beautiful and yet Ghar-id Dud to Balluta is the most sought after residential area in Malta with prices of astronomical proportions for glorified chicken coops when compared to the once gracious rows of bay-windowed houses that once adorned Tower Road.

The third and most damning effect of the rent laws is that for the last 50 years young couples have had to purchase and not rent their homes as their counterparts all over Europe still do as a matter of course today. All this for the simple reason that the rental market is off limits for the likes of them. This has led to lifestyles of great sacrifice and hardship that have taken their toll on the well-being and survival of the family units per se. The snowball effects are common knowledge. To add insult to injury, when these purchased properties are eventually inherited they are now subject to a 35 per cent tax.

What goes around comes around. If the rent laws were reformed as and when they should have been, young couples today could look forward to a much better standard of living as they would be able to rent their homes instead of purchasing them.

With present conditions in force, people with property to rent wouldn't even dream of renting them to a Maltese national and the rental market today services the expatriate communities with fat expense accounts who can afford rentals per month that most people cannot even dream of paying annually!

Therefore, Dr Gonzi and Mr Fenech, it seems as if I am not proposing as absurd a reform as I thought I was two weeks ago. If you pull eco-tax through I would suggest that you start on this reform straightaway. This is real social justice at work. I wonder then how much the government itself would be liable for?

kzt@onvol.net