Growing economy, lowering standards – we must keep our eyes open

Monday’s Budget proves that Labour remains hard to define in an ideological sense.

Not only is this a government which introduced free universal childcare – a massive social reform which has transformed the labour market – but Muscat can boast of the first substantial increase in pensions in decades. This increase was long overdue and may not even make up for the loss of income over the past years, but it does make a difference in everyday life. Moreover after three years of tax cuts for the well-off, this government has slightly reduced the tax burden for lower-income earners.

Still it is also the government which has commodified citizenship, sold off Malta’s energy supply to one company of energy magnates, and continues to de-regulate planning laws to appease fat cats.

Moreover, the cuts in income tax seem meant to compensate a general reluctance to improve wages in the private sector by increasing the minimum wage. It seems that the government is socialising labour costs by further lowering tax rates.

But it can do so in full knowledge that projected tax revenue continues to increase, not just through the €24 million passport-for-sale injection, but through increased income tax and VAT.

One can almost speak of a neoliberal government that veers to the left when it comes to distribute the budget surplus.

In this way, the Muscat government increasingly resembles the centrist governments of Eddie Fenech Adami.

And much like under Muscat, cronyism  and speculation were rife between 1987 and 1992. The only difference is that while Eddie Fenech Adami  strengthened the institutions, creating crucial checks and balances by setting up institutions like the Planning Authority, the Ombudsman, the Structure Plan and  the ministerial code of ethics…  Muscat’s government has systematically weakened these (imperfect) instruments.

Moreover we have witnessed a spectacle of appointments which makes a mockery of public decency. Joseph Cuschieri’s appointment as ambassador to Greece sums up Muscat’s abuse of the democratic edifice. It is payback time all the time under this government.

The only notable exceptions to the general lowering of standards were the laws on party financing and the Whistleblower Act, electoral commitments which had to be honoured but which will only prove their efficacy when seen to limit the excesses of the government in office, rather than paralyze the Opposition.

Another difference between Muscat and Eddie Fenech Adami is that the latter still faced an opposition which, led by Karmenu Mifsud Bonnici, retained the support of nearly half the electorate. Any small movement of votes due to single issues like VAT and hunting would have upset Fenech Adami’s hold on power. And the 1996 election result proved this.

On his part Muscat faces an Opposition which is still reeling from a massive defeat and whose electorate includes a huge chunk which likes Muscat’s system, simply because it is an extension – sometimes a caricature – of the Nationalist way of doing things.

It’s not just because PN voters are finicky and less loyal. It’s not just because Muscat constantly strives to de-legitamise the Opposition by re-exhuming scandals from the past. It is also because some centre-right voters identify in Muscat’s vision. In this sense, Muscat like Renzi in Italy may well be building his own version of the Partito Della Nazione, an aspirational party which holds the reigns of traditional networks of patronage while still projecting itself as modern and bold.

Ultimately Muscat wants Labour to become the natural party of government.  Nothing wrong in that, except that there is something sinister in a project which increasingly resembles one, big ‘payback’ party.

In this sense Malta is truly becoming more like countries like Dubai. It is getting richer, with a greater army of foreign workers, and growing complacency when it comes to governance. It is a well-known phenomenon that people are more willing to tolerate corruption when this does not affect their general wellbeing. 

That is what makes periods of growth accompanied by deregulation in standards dangerous times.

And that is why Muscat’s government needs an irreverent and antagonistic civil society and media which constantly reminds him that not everyone in this country likes him.