Value for money

Finance Minister John Dalli indicates that reforms to rein in the welfare state are now accepted as inevitable, otherwise taxation will have to rise sharply. We are now in a similar "nanny-state" situation that Britain was in when Margaret Thatcher came to power in late 1979 - a bloated welfare state whose citizens expect, as a fundamental right, to be looked after... from cradle to grave, by the state's taxpayers. She immediately put together a think-tank and, in its first meeting, economist Prof. Minford forecast that if the British welfare state was not rolled back, employees' national insurance contributions would have to rise from nine per cent then to 25 per cent this century.

Within a few years, Mrs Thatcher's policy team transformed Britain from the "sick man" of Europe that few years previously was forced to borrow from the World Bank like bankrupt banana republics to one of the most successful EU economies with low unemployment and an ungenerous but secure pension system. This is not the place to go into detail how this was achieved but a few main reforms may be highlighted now that we in Malta may be struggling to emulate some of what Britain did 20 years ago. Inefficient money-losing nationalised services were privatised, their shares sold to the general public and services opened up to competition.

Government subsidies to various services and institutions were cut or abolished; universities had to re-introduce tuition fees and budget-holding directors were loaded with the responsibility of seeing that the running costs of their institutions did not exceed their income.

Money-losing dockyards were put on sale and if no buyer were found were closed. An English ex-miner writing in these columns a few years ago, advised Maltese dockyard workers not worry if their docks are closed because, having hated Mrs Thatcher when she closed his coal mine, he now thanked her for making him find a better job and for living in a cleaner environment when the mine was closed.

The national health service and military services came in for severe reforms. The NHS was financially capped and hospital directors were instructed to deliver more service for less money after a thorough resource management exercise and pricing of all hospital services lasting a couple of years. However, complaints about the British NHS by both doctors and public continue to this day. One fundamental administrative fault the British NHS has (the Maltese NHS has it as well) is that, unlike most other western health services, the patient does not receive any written indication of what the services he/her received cost (this is why they are regarded as "free", like "manna" from Heaven).

Good luck Mr Dalli, and the rest of us.