It is not usual to hear politicians express honest, straightforward views on delicate issues. But the recent Times of Malta event in which Finance Minister Clyde Caruana was questioned by journalists, trade unionists and business leaders was a welcome exercise in straight talking.
The management of the economy has always been challenging but external factors are presenting unprecedented problems on many fronts. One also needs to add to the mix endemic local problems that always seem to defy any solution. Caruana must be complimented for his no-nonsense responses to most of the questions raised at the event, even if a streak of wishful thinking was, at times, quite evident.
The most striking comment made by the minister was that, in 2019, when real growth was around six per cent, just 35 to 40 per cent of companies declared a profit. This must have come as no surprise to many. But the minister’s comment – that there is a cultural element to this that defines us as ‘a nation of tax dodgers’ – is a candid acknowledgement of the prevailing administrative mindset of weak tax collection and anti-tax-evasion enforcement.
The cost-of-living-adjustment (COLA) mechanism is bound to be a contentious issue as the current high inflation puts more households at risk of poverty.
The minister’s reassurance that the COLA mechanism will be recalibrated to protect “society’s poorest workers” is crucial. Social equity in fiscal policy needs to be more determined.
Quality of life issues, including environmental protection, are undoubtedly of interest when many have been feeling the ill-effects of overdevelopment over the last few years. As part of the spending review that Caruana has initiated to underpin fiscal prudence in government spending, some fear that the €700 million urban greening fund may be slashed. This concern may be well founded; the minister implied that the funding could partially be sourced from the private sector.
It was the minister’s comments on Air Malta that may have been tinted with some wishful thinking. He rightly outlined the structural weaknesses in the way the national airline has been managed for the last few decades. However, Caruana’s claim that he wants Air Malta’s restructuring to be completed by the end of the year will not mean that the challenges facing the airline will be over and done with by then.
The first phase of any business restructuring involves cost-cutting and updating business processes.
This is the relatively easy, even if painful, part of re-engineering. The complex phase is the second one, when Air Malta will need to prove that it has the right mix of competent leadership, commercial critical mass and the necessary financial resources to compete in Europe’s overcrowded skies.
One can only hope the airline will not continue to leak millions of taxpayers’ euros to keep flying.
When asked whether the Malta-Gozo tunnel project is still on course, Caruana’s inimitable communication style was at its best. His curt reply, “Not my responsibility, I don’t know”, is hopefully an indirect acknowledgement that government spending needs to be reprioritised in these exceptionally challenging economic times. The proposed tunnel is a luxury idea the country can ill-afford at the present time.
Caruana’s style of taking people into his confidence bodes well. It engenders trust and a sense of ownership from listeners, after all, we are all in this together and we can all play a part in finding solutions.
The country needs less doublespeak and more straight talking from its political leaders. That is the only way to get the electorate to understand the country’s challenges and engage with them.