Inflation has become the number one problem for families. Unfortunately for the Gonzi administration, the problem arose in such a big way just when the official price index was pointing down. After impressing the powers that be at the European Central Bank with the performance of the official index, the administration geared up to boast about how our inflation rate is on the official tape, among the lowest in Europe.

It was not to be. The Prime Minister and his colleagues are quite disconnected from the lives most people lead. But they at least still know that any claims they make about low inflation would raise howls of derision across the land. Pain is being felt across all social levels, the biggest burdens being carried by middle and lower earners.

Till quite recently, Dr Gonzi and his colleagues were less than interested in the issue, either skirting it or declaring that there is no longer much that can be done about it. True, their minds were set on the introduction of the euro. They did achieve their objective of getting the whole process over and done with by January 1. However, the minds of the rest of the population were firmly fixed, still are, on the steady erosion of families' purchasing power.

So we had the spectacle in Parliament of government ministers ignoring the references to the problem made by opposition members. (Beyond semantics, the latter term is here being used as defined by The Concise Oxford Dictionary: namely with "Opposition" meaning "the principal parliamentary party opposed to that in office"; and "members" meaning "persons belonging to a society, team, etc"; and thus meaning Labour MPs.) There are moments when ignoring what a political adversary is saying can become hazardous, as happened in this case. Damage limitation has finally climbed up the government's agenda. Last week, in an unreported cameo, the Prime Minister rushed into the House to intervene at question time, to support a parliamentary secretary who, quizzed on the problem of inflation, was badly fluffing his lines.

To be sure, the script from which the government must read is weak. Price rises, they tell us, have been inevitable because they are occurring worldwide. Oil, cereal and dairy products have reached historic highs on world markets.

Now, it would be ridiculous to deny this fact of life. The question is: do these international price hikes account for all local inflation? Remember that while for instance, the oil barrel has been scaling new price heights, it has done so in US dollar terms, just when the dollar has slumped in value during one year by over 13 per cent against the euro (to which is bound the value of the soon-to-expire Maltese lira). Are the downside and upside of such developments being correctly relayed into Malta's economy?

The truth is that the imperative of implementing the technical changeover to the euro has dominated most government action (such as it is) in the economy. The best and the brightest in government ranks (such as they are) have become distracted away from the priorities of attending to inflation, and of promoting and enhancing new "hard" investment.

A complication ensued from the euro changeover itself. The government has repeated ad nauseam the eurobank's ideological spiel about how national currency transformations into the euro can have no "real" inflationary impact. This is supposed to make people discount their own experience as prices rise. Also, when the Italian people, the French or whoever, complained that prices had risen with the euro's arrival, ah, that was only due to the effects of "perceived" inflation. The dogma, despite the experience of families, stresses that the euro should have zilch effects on prices. The problem with this approach is that in the main, people disbelieve it... not without reason.

Factor this into the ongoing price movements and you will realise why despite government tactics, the uncertainties generated by inflation have become so real. Dr Gonzi has played his cards hopelessly on this front. Whether one is considering how to counter the euro's potential inflationary impact, or evaluating how to create more effective brakes against imported price rises, the starting point should have been that of creating an effective mechanism to protect the consumer, one having a real bite and a real sense for how market forces operate.

Price controls as such are no longer a valid method by which to counter price rises. However, if we really believe in free market forces to benchmark "true" price levels, then we should create mechanisms which ensure that under a "free" market system, prices are not being manipulated by occult interests.

In Malta, such mechanisms are practically non-existent. EU Consumer Affairs Commissioner Meglena Kuneva has said that effectively, we lag behind most European countries in this respect.

Yet, the Gonzi administration remains laid back before the challenge which deeply affects the purchasing power of all families. As the election approaches, the government naturally hypes what it has done and intends to do. It tries to set out a vague programme built around airy-fairy promises, which reads like a prenuptial agreement between two jaded partners: the cumulative effects of 20 years of neglect, broken promises and sloppiness are glossed over. Former "prenuptial" promises did not recognise the need for action to promote consumer protection and failed to introduce rules to safeguard true price competitiveness under local market conditions.

Positive action has become urgent to reverse the blatant failure of good governance. Labour's proposals in this area are infused with such urgency.