The anti-manifesto

As the weeks go by and the political campaign lumbers along, it has become amply clear that the two main political parties are committed to ignoring the fact that our country has a significant deficit which has led to our incurring considerable debt - which means that we desperately need to cut costs and reduce expenditure while increasing income and fostering growth.

I have already waxed lyrical about the unsustainable elements of the spending sprees that Joseph Muscat and Lawrence Gonzi are proposing, so this week I will be taking a turn at playing 'Prime Minister for a Day' and I will be making some suggestions relating to our budget. It is clear that we will be hearing or reading nothing of the sort in the glossy manifestos published by the two parties, so I consider this my 'anti-manifesto'.

I will start off with a tirade about my bugbear - social services. The aim of our social services should be to move people out of poverty and into prosperity, primarily by educating them, keeping them healthy and encouraging stable families. The highest earners in the country usually don't need such help. All they need is a good economy which allows them to thrive and prosper.

If one views social services in this manner it becomes impossible to understand a system where even the top 10% (in relation to income) in the country receive a children's allowance.  Wouldn't that money be more useful if it were spent ensuring the children in the bottom 10% get a decent education, thus lifting them out of poverty? Similarly, would it not make more sense not to give educational stipends to the offspring of the top 10%, while using the money to fund research in University and giving all students access to a better quality education?

Free education for all is a vital pillar of our society; however it is also a big drain on our national budget. How can we reduce costs without affecting the quality of our educational institutions? A potential solution comes to mind when one looks at the number of students sent to Church schools or independent/private schools. The parents of these children are prepared to pay a little more money in the case of the former and substantially more in the case of the latter to give them what they perceive to be a better quality education. The astonishing thing is that the cost of schooling a child in a private/independent school is actually lower than the cost of educating students in "free" government schools.

Why doesn't the government offer "vouchers" for parents to spend on their children's education? If the government spends around €3,000 per annum to educate a student in a public or Church school, would it not make more sense to give out €1,500 vouchers so parents would be able to choose their preferred school? This incentive could also be means tested, as people who can comfortably send their children to such schools at the moment don't need an incentive.

One could even go one step further by 'privatising' public schools to create a healthy competition of different schools vying for your voucher. People at the lower income bracket would get a 'voucher' for the full value of their kids' education. All this would result in (1) saving money, (2) a wider choice of public, church or private education and increased competition which should lead to improved quality all round and (3) government emphasis on disadvantaged children who currently end up illiterate or without a decent level of education. In addition to education, another area which needs attention is healthcare.

The long-awaited system of co-payment in healthcare was aborted in 1998 - apparently a 50c contribution that was targeted at reducing waste was simply too much for our citizens to bear. We now have a situation where healthcare costs have spiralled out of control. It is clear that under no circumstances should we envision a system which burdens patients with unreasonable costs, and we should certainly exempt the poorer people from any form of payment. However, making the top earners pay a small fraction of the cost of their medication and health services (which in most cases would be paid by their health insurance anyway) is a no-brainer.  Finally, we turn to income tax - this is a double edged sword for the government as taxing people takes money out of the economy. The problem is that people need to understand that everything from shiny new tablets and post-graduate bursaries to rubbish collection and street sweeping costs money. Money does not fall from the sky - the government must collect it in the form of taxes. The first thing we need to do is set up a team to look into tax cheats and ways of identifying them, with the necessary powers to investigate and catch people in the act.

There is no doubt in my mind that several millions in income taxes are lost every year because of unscrupulous individuals who stop at nothing to cheat the tax man. Another approach that we should consider is linking taxation directly to spending. The government could give local councils the right to impose local taxes, which would be earmarked for particular projects such as tarmacking roads or building playgrounds. Local elections would finally start meaning something and we would have a proper 'manifesto' for the locality. Beats voting for the candidate who happens to have a colour you like next to his name.

Another way of linking taxation to expenditure is by involving the public directly in decisions regarding capital (and maybe even recurrent) expenditures. This is frequently done in State elections in the USA, where proposals by the government are left to the electorate to decide. Let's say, for example, someone proposes a €500 million solution to our traffic problem. The way things stand at the moment, the PN or PL would add a glossy page in their manifesto and say 'Gvern gdid immexxi minn Gonzi/Muscat jonfoq 500 miljun biex jeqred it-traffic jams' ('A new government led by Gonzi/Muscat will fork out €500 million to get rid of traffic jams'). In the USA, the governor would come up with a plan, costings and where the funding would come from and the people would vote for the proposal.

In this example, one could propose such a project financed by a €100 road tax increase for five years. Would you be willing to pay €100 a year for this project? There can be a number of such propositions with every election and/or local election.

The ideas keep coming, but the reality is that I am not a political party. It is our politicians we need to hear thinking outside the box and not humble columnists.