Radical Gonzi

Gonzi’s name has been synonymous with indecision. Such a perception is confirmed by his (mis)handling of the divorce debate which risks splitting the liberal-conservative coalition, as well as his mixed messages on transparency contradicted by the actions of his lieutenant in the Public Accounts Committee.

Yet, there is another Gonzi whose actions merit analysis. A very decisive Prime Minister who managed to cut subsidies across the board and shrink the role of the state in the economy. Irrespective of whether one agrees or not with these changes, a post Gonzi Malta will be remarkably different from the Malta he inherited from Fenech Adami. Subsidies on gas, utilities and even MEPA have been removed or drastically scaled down, the dockyards and the ports are run by private companies and public transport is set to be run by a foreign company instead of the present conglomerate of bus drivers. He even managed to raise the retirement age without any facing social unrest.

Surely all this has come at a cost. He proved to be an expert in buying the peace by dishing out millions in compensation packages to bus drivers and dockyard workers.  And when it comes to raising tariffs, his methods seemed inspired by Genghis Khan in their shock and awe effect.

Gonzi often argues that it is better to invest money in education than on subsidies for water and electricity. I tend to agree with this view,  even if the methods used are questionable.  After all, subsidising heavy users of water and energy defies any green principle. 

But what disappoints me most is that despite all this talk on education the majority of working class kids are barely qualified to find decent work let alone continue their post university studies. Will the newly set up colleges be adequate ladders for social mobility? Much depends on the funding which is vital to make inclusion work. Will we have smaller classes, more teachers and after hours activities to match school time with the working time of parents?

It is also disappointing that he has not made social mobility one of his 2015 vision goals. If social mobility was a priority, the  government would invest a substantial amount of money in making pre school child care free for middle and lower income earners. If working class women work instead of staying at home, the income supplement on its own would be a big instrument of social mobility as well as cultural emancipation. Such a policy might be expensive but surely more useful than stipends for university students - a middle class subsidy which has survived the neo-liberal onslaught.

Another priority is to ensure that resources are directed towards children from difficult backgrounds in their early school years when their life chances are determined. One way of identifying these children early is get them in the system earlier through an extra year of obligatory  schooling. It was shameful how the PN rubbished Labour’s great idea of an extra year of primary education (the infamous repeater class campaign).

Still, if he manages to keep public finances in order, the amount of money released from subsidies, could well help Gonzi honour his promise of a middle class tax hike before the next election. Surely fiscal incentives rewarding hard work are preferable to dishing money on subsidising water and electricity bills.

Still if the government fails to find alternative revenue streams to make up for any income tax cuts (perhaps through higher taxes on land speculation), Gonzi would have simply left a more unequal Malta. For there can be no sustainable social investment if taxation revenue falls. But in the absence of social mobility which elevates the working classes, higher tariffs and the end of subsidies would have simply led to a decline in purchasing power which cuts across the board.