[ANALYSIS] After Budget 2017 | ‘Turbo’ Joseph vs ‘Doomsday’ Simon

The lure of the strongman

Prime Minister Joseph Muscat is a natural-born orator, speaking through parables like Dom Mintoff (comparing Simon Busuttil’s economics to the servant who buried the talent given to him by his master, instead of trading it to make more talents) and working himself up to crescendos through pauses and gesturing in a way reminiscent of Lawrence Gonzi.

But his constant belittling of the Opposition leader, whom he constantly ridicules, makes him look less as a statesman and more of a caudillo whose primary mission remains that of vanquishing the enemy. His body language exudes confidence, but risks being perceived as a strongman who lacks caution. “Under the PN everything was going with slow motion, we are going at turbo speed,” Muscat himself said in an attempt to project himself as a mover and shaker.  His reference to the “brands” people wear and which restaurants they frequent at weekends as indicators of their well-being provides an insight in the worldview of a leader who may be in synch with popular aspirations, but who is a consumerist at heart.

He congratulates himself as a good salesman and gives the impression that for him the end (work and prosperity) justifies the means. But do people want a salesman who is willing to bargain the nation’s assets at Castille, or do they prefer someone who applies the brakes to avoid hanky-panky by those around him? Opposition leader Simon Busuttil asks: would you buy a second-hand car from someone like Muscat without expecting a catch?

Busuttil’s delivery remains modest, albeit less stiff and robotic than in the first two years of his leadership. His speech contained a lot of pertinent messages but no main salient focus and Busuttil still finds difficulty to convey outrage and anger without losing his composure. Moreover Busuttil still lacks Eddie Fenech Adami’s gravitas when he wants the country to stop and think about the risks it faces.

But his lack of machismo may well turn out to be an asset if contrasted against Muscat’s caudillo image among strategic categories of moderate voters who cringe at an overbearing PM. Busuttil’s emphasis on quality of life and future sustainability distinguishes him from the PM’s more populist approach to politics. He clearly needs to build on this.

A clash of two narratives

Muscat seemed more at ease with his conscience in this budget than in previous ones, simply because he has managed to distribute more wealth to those who are worse off. He takes pride in doing so “without taking anything from anyone”. He gives the impression of being a man with a plan; someone who first stabilised the economy and let it grow and who now can use this wealth to improve lives.

For him wealth distribution is only possible now because there is a pro business government. What he does not say is that oil prices have fallen to a third the price paid during the Gonzi era. Muscat comes across as someone who genuinely wants to improve the living standards of everyone as he presented an impressive list, which includes removing taxes paid by pensioners.

But he does not seem to care much how these aims are achieved. Therefore he dismisses concerns on the future sustainability of pensions and the need of an obligatory second pillar. While it is true that this would involve an increase in insurance contributions, as Muscat pointed out, the state can pay for the increase in contributions paid by low income earners. Moreover low income earners are those whose future pensions are most at stake.

Muscat may have a plan but it is not clear whether this goes beyond his tenure at Castille. The catch in all this is that to keep up with rising social spending and keep money flowing into its coffers, the government has to keep business, including construction and real estate, going at turbo speed. Muscat is so conditioned by business interests that while saying he personally agrees with a revision of the minimum wage he would not make the revision unless all social partners agree to it. One may well ask: if not now, a time of economic growth, when?

But while Muscat may be a prisoner of his own pro-business logic, it is hard for Simon Busuttil to generate enthusiasm for his text book vision of an “economy for the people”, “social justice”, “a good quality of life” and “good governance” – which he referred to as the four pillars for a future PN-led government. He is more convincing in contrasting Muscat’s concern with the “here and now” with the opposition’s concern for long term sustainability and its readiness to confront future challenges, such as pension reform.

Busuttil also exposes the risks posed by Muscat’s ‘turbo economics’, namely the risk of a property bubble and over-dependence on sectors like gaming while ignoring small businesses and manufacturing. But in so doing Busuttil, who had once incorrectly predicted a Greek-style bailout if Muscat were elected to power, risks being seen as a wet blanket or a latter-day Cassandra. No wonder the PM dismissed him as “a bird of bad omen”.

Strongest and weakest arguments

Muscat’s social reforms

Joseph Muscat’s strongest argument was his impressive list of achievements in the last three years in power, added to the social measures introduced in the budget; a list which includes free childcare for all, in-work benefits, a full minimum wage for disabled persons who cannot work, and a plethora of social benefits addressing different social categories.

He also linked childcare to the emancipation of women – insisting that each child put in childcare means one more independent woman in the workforce – thus underscoring the role of childcare as an integral part of children’s socialisation and educational development.

Muscat’s other strong point was that of showing leadership on migration issues by defending his vision of Malta as a cosmopolitan hub and rejecting xenophobia even if he makes it a point to mention the legitimate concerns of Marsa residents and that “illegal immigration” is now under control.

He also scored points with liberals by recounting the story of a gay couple who adopted a disabled child whom nobody else wanted to adopt, something made possible by the introduction of civil unions. Busuttil’s failure to refer to immigration and civil liberties was a major shortcoming.

Busuttil scores on energy policy

Muscat’s weakest argument was his poor reply to Busuttil’s strong critique of the government’s energy policy.

On energy Busuttil convincingly argued that the reduction of energy tariffs was achieved thanks to the investment made by the previous administration in the interconnector and the BWSC plant, and the drop in international oil prices. For the first time Busuttil is credible on this issue simply because what he says reflects reality. Although the new power station is not yet operational, the government was still able to reduce tariffs, close the Marsa power station, and take credit for reducing emissions.

Simon Busuttil is more convincing in contrasting Muscat’s concern with the “here and now” with the opposition’s concern for long term sustainability

He questioned the government commitment to buy energy at 9.6 cents from ElectroGas Ltd when energy can be bought from the interconnector at between 3 cents and 6 cents. He countered Muscat’s argument that this will bring stability in pricing, claiming that this will result in “a stability of high prices”. He also deflected Muscat’s pre-election depiction of the BWSC plant as a cancer factory by emphasising the virtues of the interconnector, which produces no emissions in Malta.

He also questioned how Muscat is now against further reductions in energy prices when the price of oil has fallen to an all-time low, though he wanted a reduction when oil was more than double its current price. He did not shy away from committing a future PN government to buy energy from the cheapest source even if this could be in breach of existing contracts. How Busuttil will renege on these contracts remains a mystery.

The main weakness in Busuttil’s argument is that he apes Muscat’s pre-election energy populism by calling for a reduction in energy prices instead of diverting any savings towards investment in renewables. The other weakness, exposed by Joseph Muscat in his reply to Busuttil’s speech, is that in the absence of the ElectroGas investment, Malta would still have to rely on heavy fuel oil or more expensive but cleaner diesel.

For the conversion of the BWSC plant to cleaner natural gas would not happen without the advent of the LNG tanker. But Muscat was economical with the truth when he claimed that the Marsa plant was closed down because of the new ElectroGas plant. In fact the Marsa plant has already been decommissioned even if the ElectroGas plant is not in operation.

The other weakness in Busuttil’s argument is that while Muscat was lucky to see a fall in international oil prices, he still honoured his pledge to reduce bills for both businesses and households when the price of oil was not yet low. Busuttil’s argument for further reductions comes across as being rich coming as it does from an exponent of a party which presided over hikes in energy prices. Once again Busuttil attacks Muscat not for inflicting additional pain, but for not giving enough. This makes his attack weaker.

Ideology: who is more socialist of us two?

Muscat once again boasted of his pro-business credentials and was keener on emphasising a clampdown on abuse of social benefits than any action against tax evasion, something that he only mentioned once with reference to the black economy in the rental market.

But Muscat used the social measures introduced in the budget to counterbalance the criticism that his government has veered too much to the right.

On balance Muscat remains clearly centre-right when it comes to wealth creation and centre-left when it comes to wealth distribution, a model which is probably in synch with the expectations of most Maltese. The question is whether such a model is sustainable and whether it is too dependent on accelerated growth in construction and other sectors attracted to Malta because of its favourable tax regime.

Busuttil tried to project himself as a people’s tribune relating stories of common people on low or normal wages, facing high rents and costly medicines, but steered away from any concrete or radical measure addressing these problems. He may have shown that the party’s heart is with the people who are paying high rents and earning low wages, but its mind is still not made up.

Despite his emphasis on social justice it remains unclear whether he agrees with an increase in the minimum wage or what measures a PN government will take to address rising rents. Busuttil simply says that nobody should have less than a certain standard of living.

Busuttil did position himself to the left of the Prime Minister with regard to the privatisation of healthcare, clearly making a pitch to traditional Labour voters by presenting himself as being more socialist than the Prime Minister. “I am not a socialist but on this issue (the privatisation of health) I am surely more of a socialist than you are," he said. Busuttil insists that since the main concern of the private sector is profit, this is irreconcilable with the public nature of the health sector.

That is a principle with which any Maltese political leader before Muscat would have agreed. But how would Busuttil draw a line between privatisation and subcontracting parts of the health service to private entities, as done by previous PN governments? It also remains to be seen whether Busuttil’s discursive shift to the left will change tribal loyalties simply for hearing the ‘S’ word which Labour has long ditched.

But in showing a remarkable readiness to confront big business interests, opposing privatisations in health and energy, high-rise permits and land reclamation, Busuttil is coming across as an unlikely anti-establishment figure, confronting a Prime Minister who has the demeanour of a populist, but whose business model hinges on more opportunities for big business.

Busuttil, who presented himself as a son of a self-employed owner of a tool shop, also effectively targeted the self-employed, presenting an effective comparison between the €360 million bank guarantee for ElectroGas and the lack of funding for start-up businesses. But short of announcing a policy, which will be addressing this sector, Busuttil did not offer anything to this sector except a promise to reduce electricity bills. But Busuttil is right in identifying small shop owners as a strategic sector, which may well shift to his party if offered a good deal.

Mirror, mirror on the wall… bwho is the most honest of us two?

Busuttil was formidable in his denunciation of Konrad Mizzi and Keith Schembri and Muscat’s failure to kick them out. He also hinted that at the right moment the people would know who the owner of Egrant is (the name of a company opened in Panama on the same day as those of Konrad Mizzi and Keith Schembri). Egrant may well be the PN’s weapon at the next election, although in the absence of concrete proof linking Muscat to Egrant, this may come across as speculation.

But Busuttil knows well that by retaining Mizzi and Schembri in Castille, Muscat has cast a shadow on any deals involving the two. Surely the mystery surrounding this third company will return to haunt Muscat at election time. Muscat did not even once refer to Panamagate and Busuttil’s questions on Keith Schembri’s conflict of interest in negotiating business deals on behalf of the government.

But the major problem for Busuttil is that of reconciling his commitment for honesty and good governance with the past track record of PN governments.

The problem is that as Muscat observed, many are willing to agree with Busuttil on this issue but few are willing to make the leap of faith and believe that Busuttil is any better. His over-sensitivity and paranoia about any accusation of impropriety committed by members of his front bench, suggests double standards.

Busuttil was justified in questioning Muscat’s speed in appointing an inquiry into a police investigation related to a company of which Beppe Fenech Adami was a director, and the failure to launch any inquiry to investigate the police failure to start a Panama papers investigation, among many other scandals.

But his attempt to suggest that MaltaToday formed part of a “fascist” conspiracy for revealing that a police investigation into a company of which Beppe Fenech Adami was a director was postponed in January 2013 to a date in April 2013. Ultimately it was Busuttil who decided to turn “honesty” into his main electoral plank. This makes him and his party fair game. It is up to Busuttil to convince the electorate that the sins of the past pale in comparison to what he refers to as the “corrupt mentality” which pervades governance in the country.