Roamer's Column

The Economist news-paper does not like Silvio Berlusconi. It loathes him and accuses him of exploiting his majority in Italy to put himself beyond the reach of the law. Last August, its first leader was an unprecedented open letter to the Italian prime minister. That leader-letter referred to a dossier the newspaper had drawn up on what it called "his alleged misdeeds, backed up by documentary evidence". This can be found on its Website. "The Economist," it thundered, is concerned about Mr Berlusconi "both as an outrage against the Italian people and their judicial system, and as Europe's most extreme case of the abuse by a capitalist of the democracy within which he lives and operates." Tough words.

Nor has it been less than derisory (and a little unfair) about Mr Berlusconi's attempt at pensions reform. This includes a measure to raise the retirement age for men from 57 to 65. If Italian men used to the luxury of such an early retirement age wish to retire at 57 (or with 35 years' worth of contributions) they can still do so but they will receive a lower pension. The scheme does not come into effect until 2008, when it is hardly likely that Mr Berlusconi will be around, politically speaking, of course.

Italy has a huge problem in an area that has become the single most important socio-political issue for western democracies and, come to think of it, non-democratic countries, too. Pensions in Italy are a massive 24% of GDP. That percentage is nowhere near as large in Malta but nobody is in any doubt that with other welfare and health spending, the money these siphon off is considerable and, in a decade or two will be unsustainable. Our birthrate, too, is falling off, as it is in most European countries.

This widespread fertility reversal has recently led the newspaper that loves to hate Mr Berlsuconi to encourage people to have more babies. The Economist? What are we coming to when this newspaper that has backed every form of 'health' measure that would prevent births advises Europeans to have more babies? That apart, European countries had indeed better beware. They cannot fail to reproduce themselves and moan about immigration. For one thing, selfish as this may sound, where is the workforce for 2025 coming from? Youths of the world unite - and increase and multiply. You have a huge chunk of your salaries to lose to keep us fuddy-wuddies alive if you do not.

This is what the argument about pension reform is all about. There are going to be too few of you and too many of us to keep in pension and kicking, which is where health care funding also comes in. Pensions cost. Health care costs. Welfare benefits cost; those welfare benefits, I keep repeating, that each of our political parties in government boasts it has increased so munificently. These costs are coming home to roost. The day of reckoning is arriving. The end is nigh.

Malta is still in time

Our problem is nowhere near Italy's in terms of pension costs vis-à-vis GDP. Last week, the ministry for social policy organised a seminar to discuss "Adequate and Sustainable Pensions". In his contribution to the seminar, the finance minister, John Dalli, pointed out that average expenditure spending in Europe accounted for 12.7% of GDP in 1999, ours was 4.5% (4.8% last year). But 54.11% of expenditure on social security benefits in Malta went into retirement pensions.

His approach is to maintain a pay-as-you-go safety net "that covers all Maltese citizens and which is funded by compulsory contributions by all". At the same time, there is the need for adjustments to key parameters such as the retirement age, the calculation of the actual pension paid annually, the method of indexation and the level of contribution to be made by all those in the working age bracket. Each of these parameters is determined by factors that presumably have been tackled by the National Commission and are now being discussed by all those with whom the government will consult.

What is emerging from the government side is the mature conviction that, as the social policy minister, Dr Lawrence Gonzi, put it in his contribution to the seminar, the process of reform (of pensions and health care) "must move forward to the next phase, that is, the identification and implementation of short, medium and long term solutions". Both ministers have declared their commitment to retain "our social safety net". This "necessarily translates itself" into a responsibility "to make the system financially sustainable for the benefit of our future generations".

It should be a matter for serious delight that we will soon be implementing what has been identified by a National Commission representative of the main stake-holders who included, imaginatively, the island's National Youth Council. The latter must have made provided a substantial input to the discussions. Here is a subject that affects young people more directly than anything else on the social and political agenda. Their children's future standards are at stake.

Paradoxically, pensions are all about young people - and old. The latter cannot get by without the former. Required now is a mature evaluation of the proposals that have been submitted to the government. Civil society, which includes the Opposition and is the current buzzword, must provide it. As Dr Gonzi out it: "Our preferred way of going about this challenge is by consultation with civil society".

We must wait to see whether the Labour Party will adopt a cynical approach or take the opportunity that beckons at the flood so that, when it is next in government, it will not have to assume responsibility for taking decisions that are not - how can I put it? - hugely popular. The party has made some gross political errors during the last 12, 13 years and even grosser ones 16, 20, 25 years ago. Here is its chance to demonstrate that on matters of such moment it will not err again.

Recent errors of unblessed memory include the debilitating and self-defeating battle of VAT and the even more devitalising war on EU membership. On both it has had to backtrack, even though its leader continues to rabbit on about his preference for a partnership that lost his party a referendum and the elections.

As to former blunders of some proportion, we can never forget Mr Mintoff's ludicrous decision to build himself a shipbuilding yard; nor Dr Karmenu Mifsud Bonnici's absurd resolution to employ 8,000 extras on to the film sets of the public sector and paratstatal bodies. For each and every one of these we continue to pay a price. From similar frames of mind, God deliver us and if he does not, the Labour Party will have no option but to rediscover itself in a form that the electorate will recognise as a massive self-improvement

In contempt?

There was strangeness and then some more, last week.

Local tribunals are owed Lm1.16 million. The debtor is not the government, which can do without incurring more debts (see next piece). It was a number of people, surely running into tens of thousands who, for some wrong reason or another, have not paid fines imposed on them for whatever. Assuming a Lm10 fine, the figure passed on in Parliament by the home affairs minister, Dr Tonio Borg, in answer to a PQ requires 110,000 transgressors. We may be pretty lawless on the road, but not that chaotic and disorderly, surely?

What seems to be pretty certain is that we serenely follow the truth of John Wilson's dictum that "laws were made to be broken". But does that also mean that the lawbreaker can be in contempt of the tribunal's magistrate and get away with it? Perhaps not. We are prodigiously litigious. I suspect that handsome sum of money is being contested in the courts by offenders who disagree with the findings of the ten local tribunals concerned. The courts are, not unusually, taking their time.

PBS in the docks

As if the drydocks and shipbuilding yards were not enough, we are now told that our national station, PBS, has stung us, the taxpayers, not the government, for more than Lm7 million. That was the operational loss suffered by PBS for 2000-2002, or so we were told. But wait awhile; there is a different hymn sheet, which says the actual loss was just under Lm600,000. The government's public investments minister, Dr Austin Gatt, added the income from licence fees (Lm6.57 million) and included it in the operational loss, which is not quite fair.

Income from licence fees belongs to the station; at least it did up to now. Dr Alfred Sant, when he was in power, had passed on the whole of that income to PBS and there was logic to that decision. Other countries operate this way; BBC, for example. But BBC does not derive additional income from advertising, as PBS does. Its remit is simply, well, not so simply, to provide its British audience with high quality programmes, to be politically impartial, to inform and to present a balanced world view, which many like me, do not think it does. If it needs more money the BBC has to create its own income by creating programmes and selling them to stations all over the world. Others still, get by solely with advertising revenue. PBS may probably be unique in that it pockets both the licence fees and revenue from selling airtime.

So, if you want to be fantastically correct you may wish to tot up revenue from advertising, add this to the operational loss and arrive at a fairer answer of the station's financial situation. You may also observe that the station lost 12% of its airtime sales last year. This reflects on the unsaleability of some of its programmes.

That there is inefficiency at many levels, from management to the unskilled employer, is clear. Cabinet was informed that the company employed "work practices designed for work not to be done". Presumably the remark was based on independent reports submitted by the University's Centre for Communications Technology and a task force, and research carried out by MIMCOL on human resources.

Technology is said to be "primitive, or non-existent". A unionised management, no less, had invested all of Lm65 in training, last year. The indications are clear. PBS is an unprofessional station which is not serving its licence-fee paying public nearly well enough. Out of 184 employees, 139 were over 50, 89 of them over 55. Nothing wrong with being the right or wrong side of 50, of course, but the numbers strongly suggest that new and professional blood is needed to infuse the station with more purposeful creativity. Shift structures, too, were reported to be all wrong; management lacked motivation and confidence and was insufficiently trained. With a confidential report like that under its belt, PBS is one big mess. The story is not new. It just gets worse with every new telling. Did anyone say radical overhaul?

Uneven playing fields

An interview of Dr Louis Galea, the education minister, by Mark Wood appeared in last Friday's The Times. No doubt those who read it were struck by this or that point raised by Mr Wood. I homed in on a remark made by Dr Galea that he would "leave anything to be desired vis-à-vis our competitors in the Church and private schools".

His "competitors", he failed to point out, are disadvantaged. Where the government education sector is paid for by taxpayers who include fee-paying parents, its private sector counterpart, correctly enough, receives little or no help from the State. Recently, a move was made by the finance minister to pat fee-paying parents ever so slightly in the form of a partial rebate. This was a move in the right direction, but as slight as that pat.

There is a case to be made, and natural justice requires it to be made, for all the fee to be tax-deductible. These may be hard times in which to put this forward, but Mr Dalli should be thinking along these lines. If he thinks he must move forward in a measured manner, so be it. He should, however, publicly acknowledge that his government has it in mind to arrive at wholly tax-deductible fees by, say, 2008.

When State schools need to be repaired, the minister knocks on Mr Dalli's door and asks for more money. Because education is at the top of the government's list of priorities, along with health care, Mr Dalli more often than not, obliges. It is probable that fee-paying parents have paid for most of the repairs through the income tax they pay. When a private school needs to repair or redecorate its classrooms it does not turn to Government; it addresses a new charge to parents by raising fees. The playing field is demonstrably uneven.

I do not think he does, but Mr Dalli may argue that if fee-paying parents find the going tough they should send their children to State schools. Dr Galea, who knows better, will have none of this. If private and Church schools closed their doors and the State were placed in a position to take on the education of their students, Mr Dalli would not know what hit him. Dr Galea, for one, asking for another six million liri to adjust to the new school population. Fee-paying parents save the State from this expense. The State should acknowledge this in a concrete manner.

Slowly, of course, the same situation is arising in health care. Patients who receive private treatment because they take out a health insurance policy will need to have the premium they pay considered for tax deductibility. They are saving the State millions of liri by opting for private health care. The government has to acknowledge this.