100 days of Labour: honeymoon's over

Incisive on Church-State relations and civil liberties, pro-active on delivering Labour's energy plan, disappointing on meritocracy and good governance, hazy on economic direction and subservient to the construction and hunting lobbies: this is the mixed verdict emerging from an analysis of Joseph Muscat's first 100 days in office.

Joseph: progressive or retrograde?

Muscat's reformist and progressive inclinations came to the forefront in his first days in office, when he announced that he was writing to the Vatican to ask for a revision of the Church-State agreement, which gave State recognition to decisions made by the Church's Ecclesiastical Court.

As other governments, like those in France and the United Kingdom, embarked on ensuring full marriage equality for same-sex couples, the new government has started a consultation process spearheaded by Social Dialogue Minister Helena Dalli aimed at introducing civil unions after the summer recess. 

But going in the opposite - and retrograde - direction, Muscat's government has not only re-opened the spring hunting season, it also waived the €50 spring hunting licence. BirdLife not only described this year's hunting season as being worse than last year's, but also went on to describe the Parliamentary Secretary for Animal Welfare, Roderick Galdes, as the "hunting secretary".

The escalation of illegalities - some of which involved FKNK members - prompted the government to deploy the army in the final days of the season in a clear indication that the situation had got out of control.

The economic straitjacket

Muscat's first 100 days in office have been characterised by an attempt not to rock the boat. In fact, Labour simply approved the budget already prepared by Tonio Fenech lock, stock and barrel, despite an increase in the deficit, which ultimately led the Euroopean Commission to commence an excessive deficit procedure against Malta.

As veteran economist Karmenu Farrugia observed, this was nothing short of a "slap in the face" for the new government, which failed to convince the Commission that it could reduce the deficit to 2.7%, as foreseen in the approved budget.

The failure to produce a 'mini-budget' which takes into account the changed circumstances and which is fully owned by the new government, has deprived the country of a clear economic direction.

While for political reasons Muscat seems keen to retain the regressive tax cuts for high-income earners, despite doubts about how sustainable these are, Muscat is increasingly a victim of his 'all gain, no pain' electoral message. It evaded the central ideological issue facing governments all around the world: whether to restore public finances through spending cuts or an increase in taxes.

For although Muscat inherited from Gonzi a relatively prosperous economy, which has kept unemployment at bay while attracting a high number of foreign workers, Muscat also inherited a precarious fiscal situation aggravated by the electoral auction, which included a number of collective agreements signed by the incumbent government on the eve of the election and which has to account for the wild promises made by both major parties.

Muscat has so far kept the country guessing on how he will address the deficit, hinging all his bets on a burst of economic growth spurred by new construction projects and the promised decrease in energy bills.

Having hinged any benefits to its core working-class constituency on a trickling down of wealth resulting from economic growth, Muscat will be in serious difficulty if the economy contracts or remains stagnant. But while economic growth is desirable, Muscat may have taken a dangerous shortcut by banking on construction instead of consolidating the knowledge-based economy.

Energy bait for big fish

In fact, the interest of 19 international companies - including a number of energy giants, 11 of which have already been shortlisted - indicates that Labour's electoral commitment to reduce bills by hiving off 40% of Malta's energy supply is far from pie-in-the-sky. 

But does the strong interest also indicate that the bait offered to the bidders is more lucrative to them than to the nation?

Surely, if the government's neo-liberal solution to the country's energy problems manages to reduce energy costs for companies and households, it may well result in an injection of money to the economy, which could well result in increased revenue for the government from taxation. Moreover, this would come with the added benefit of a cleaner source of energy. Yet the government has backtracked on Labour's promise to immediately shift the existing power station to cleaner diesel from heavy fuel oil.

Significantly, in its first 100 days, Labour has already made two significant changes to its plans, reducing the promised power purchase agreement from 10 to five years.

The project development statement also paves the way for the development of an offshore floating power station, which would be located on a ship berthed at Delimara, instead of a land-based one.

The expression of interest also clearly states that after the five-year fixed price agreement, Malta will have to buy energy from the same buyer at a price pegged to international gas prices for the remaining 13 years of the contract.

Joseph Muscat may well be making a trade-off between short-term economic gains in the next five years and the long-term national interest, which will depend on what happens in the subsequent 13 years, when Malta will still have to buy its energy supply for both the State-owned and the privately owned plant from the same energy giant.

In this way, Muscat may well clip the wings of the next legislature so that he can soar high in hopes of a 2018 electoral re-appointment.

Ironically, the agreement - which has a clear bearing on the country's energy sovereignty - is set to begin on 31 March 2015. This is a suggestive choice, given that it coincides with Freedom Day.

Pandering to the construction lobby

Even riskier is the government's pandering to the construction industry, which seems to suggest that Muscat hopes to kick-start the economy by giving a new lease on life to the embattled construction sector. 

One particularly positive measure is the exemption from paying fees  of any property development which aims to restore buildings in urban conservation areas without demolishing them.

But that decision has been accompanied by a series of subsequent decisions which simply pander to the construction lobby.

With hindsight, the presence of developer Sandro Chetcuti at Muscat's inauguration in Castille comes across - more and more, as time goes by - as a worrying sign of both the present and the future.

Among the decisions taken in the first 100 days was a relaxation of height restrictions for hotels - already envisioned by the previous government but now extended to all of Gozo. It also entailed a substantial reduction in planning fees, including those for penthouses. Finally, we have seen the reduction of thresholds for foreigners who acquire residency by buying property in Malta, through regulations which clearly carry the imprint of Chetcuti's Malta Developers Association. 

Muscat has also signalled his intention to issue a call for expressions of interest in land reclamation projects, an idea abandoned by the Gonzi administration after reports showed that such projects could only be feasible if accompanied by substantial real estate development. Moreover, the government has also announced plans for the fast tracking of all permits deemed to conform to the approved local plans and is drafting a policy aimed at facilitating agritourism projects in the countryside.

The final nail in the coffin for any semblance of environmental sensitivity is the government's decision to commence a feasibility study for a bridge linking Malta and Gozo, one which could result in a multimillion-euro tender benefiting contractors, but which would obliterate Malta's landscape permanently.

Labour's appeal to small and medium-sized contractors may also backfire on its popularity in certain localities, especially those with a high number of elderly residents, which have been rendered permanent construction sites.

But the major risk of such a policy is an economic one, increasing the exposure of Maltese banks to the vagaries of the property market, which is already characterised by an over-supply of properties, at the risk of economic ruin in the long term, as happened in countries like Spain and Cyprus. Once again, Muscat's government could be making a dangerous trade-off between short-term gain and the long-term national interest.

The spectre of Malta taghna lkoll

In his first 100 days in office, Muscat is already being haunted by his pre-electoral pledge to turn Malta into a meritocracy.

Some of his proposals - like the appointment of government backbenchers on public boards - not only fly in the face of meritocracy but could also be considered a throwback to the past.

The Muscat administration has certainly made a number of worthy appointments which do in fact meet the criteria of a meritocracy. The most notable of these were Reno Bugeja as Head of PBS News, the appointment of respected architect Vince Cassar as the new MEPA chairman and the appointment of Giovanni Bonello as the chairman of the Justice Reform Commission. 

The government has also reduced the salaries of top government officials - such MEPA's chairman, previously paid  €93,000 a year.

But while some salaries were over the top, this reduction in salary could devalue public service and lead to situations of conflict of interest. For example, the new MEPA chairman will still be practising his profession as an architect in areas like project management. 

It is also highly questionable to retain unpaid consultants like Robert Musumeci, whose remit has still to be defined by a contract two months after his appointment. This underscores the fact that people could accept positions not just for the money involved but also for wielding influence.

These positive appointments were offset by a number of highly partisan appointments like that of the Labour Party's former chief executive officer, James Piscopo, as the chairman of the Transport Authority.

Equally damaging for Labour's credibility is the perception of a 'billboard meritocracy', which has seen most of the personalities visible on pre-electoral billboards appointed to some government board and the unjustified removal of highly competent officials, like former MCA chairman Antonio Ghio.

But the cherry on Muscat's meritocracy cake was the appointment of Jason Micallef, a former party general secretary and current ONE TV chairman, as the chair of the Valletta 2018 committee.

Equally questionable was Muscat's co-opting of Nationalist dissidents in public commissions, which leads one to believe that such appointments represent political payback and also gives the impression that the prime minister is using appointments as a tool to exploit divisions on the other side, rather than to rise above the partisan dichotomy.

Still, the government's reformist credentials may be strengthened if Franco Debono - known for his proverbial drive - delivers on constitutional reform.

Although the appointment of the MP who brought the PN government down is bound to be perceived as divisive by the opposition, a recent MaltaToday survey showed that Debono's appointment was received positively by a relative majority of respondents, including a number of PN voters.

The highly partisan nuances of Muscat's style of governance are also evident in small details like the 31 March date for the opening of the new power station.

It has also been accentuated by a prison amnesty granted to prisoners on the occasion of Labour's victory, which was met by chants of "taghna lkoll!" by inmates in the presence of Justice and Home Affairs Minister Manuel Mallia.

But while granting an amnesty to prisoners sent an inclusive message which defied populist and punitive sentiments - thus reaffirming Labour's sensitivity to the plight of excluded minorities - the link between an electoral victory and prison sentences jars with the basis of good governance.

Good governance tested

Yet the greatest blow to Muscat's good governance credentials was the way a waiver granted to one of his parliamentary secretaries, Franco Mercieca. Initially understood as a waiver related to his practice in the public health service, it later emerged that the PS was still engaged in private practice months after his appointment. The fact that Mercieca only stopped his private practice after being caught red handed by the media underlines Muscat botched handling of the case. It also shows that to the new government, as to the previous one,  the culture of resignation is something alien.

By using Lawrence Gonzi as his own yardstick of ethical standards when questioned on the matter in parliament by the new opposition leader, Muscat sent a very negative message of continuity. For while the beam in the eyes of former ministers does pose a credibility problem for the opposition, voters expected change and not continuity on this front, and do not expect Muscat to justify his blunders by constantly lambasting the previous government. By doing so, Muscat gives the impression that he is still stuck in the role of opposition leader 100 days after being elected to office.

On the legislative front, the government has piloted a law which removes prescription for both corrupt elected politicians and their corrupters. The government is also committed to passing a whistleblower act and a law to regulate party finances after the summer recess. If Muscat manages to get both laws approved by the end of the year, in nine months he will have done what previous Nationalist governments  failed to do over a quarter of a century.

Bigger government

For clear political reasons, Muscat has also opted to install the largest government in Malta's post-independence history, composed of 14 Ministers and eight parliamentary secretaries, all equipped with their own private secretariats with a keen interest in customer care.  

In itself, this not only increases the cost and size of government but also increases the risk of error and abuse, for the simple mathematical reason that a loose cannon is more probable in a 23-member executive than in a 15-member one.

Muscat has made a number of poor judgements, like undervaluing the importance of culture by delegating it to junior minister Jose Herrera, who clearly preferred another portfolio. Highly indicative of this was Herrera's recent declaration that he is toying with the idea of having three carnivals a year, a statement that became the butt of jokes on the social networks. It also gave the impression that government is there to placate all sorts of lobbies in the country, ranging from the carnival organisers to the Monti hawkers (placated by Chris Cardona's decision to move them to Ordinance Street).

Symbolic gestures like Health Minister Godfrey Farrugia's decision to open an office at Mater Dei have clearly backfired, as this gives a false impression that longstanding structural problems can be addressed by a simple stroke of goodwill.

On the other hand, many of Muscat's choices have been vindicated - with Manuel Mallia striking a chord by exposing a racket among prison warders by means of a ministerial spot check. While this raised questions on whether ministers should themselves be involved in disciplinary actions, it clearly contrasted with the previous administration's inefficacy in dealing with problems (in other words, the PN allowed them to fester for years). Less sensational than Mallia's visit was Leo Brincat's commitment to restoring accountability at WasteServ.

Ministers like Karmenu Vella and Evarist Bartolo have also shown a dignified, hands-on approach, while Joe Mizzi has distinguished himself as a workhorse in the transport sector.

For other ministers - like Energy Minister Konrad Mizzi and Finance Minister Edward Scicluna, both of whom display an aura of technocratic competence - the proof of the pudding will be in the eating: they can only be measured by results. It is on these results that the stability of Labour's entire edifice rests. But these decisions could also have consequences far beyond Muscat's first term in office.