In the past 10 years we have had a finance minister and a prime minister and a finance minister and prime minister incorporated in one whose political life is guided by the Chinese proverb "Zhi lu wei ma", which means "point at a deer and call it a horse". The Chinese use this proverb to describe those who say one thing and do another as a way of life.
I remember more than 13 years ago sitting through my first Budget speech in parliament when Finance Minister John Dalli presented his first Budget speech. I heard him solemnly declare that one of his main objectives was to lower the budget deficit to at least three per cent of our gross domestic product (GDP) up to 1996.
For the following three years I sat through another three Dalli Budget speeches hearing how the Nationalist government was on track to contain the budget deficit. In the summer of 1996 the Nationalists called a snap election and, during that short election campaign, in his speeches, Prime Minister Eddie Fenech Adami never referred to any problem with government finances.
According to them "Money is no problem" and they promised that, once returned to power, they would improve pensions and social services, spend more on health and education, and prosperity would be guaranteed to everybody.
But the PN lost the 1996 general elections and when the new Labour government through Finance Minister Lino Spiteri surveyed the state of public finances, it became clear that they were in a very poor state. I clearly remember Minister Spiteri very soberly warning us around the Cabinet table that we were in for very tough times and that tough decisions needed to be taken to start healing the country's finances.
After creating a financial deficit the Nationalists decided to create a truth deficit. Not only did they deny the financial deficit, they accused the Labour government of inventing this big political lie. They persisted in this deception even if a memorandum by Minister Dalli to Prime Minister Fenech Adami just before the general election was called admitted the disastrous state government finances were in.
From 1992 to 1996, the fiscal deficit, instead of being lowered to three per cent of GDP had risen from Lm56 million (5.4% of GDP) in 1994 to Lm114 (9.5% of GDP) in 1996! To deal with this crisis the Labour government had to take very unpopular decisions. At no point did the Nationalists show any national interest as these decisions were taken. They were very opportunistic, keen only on regaining power as soon as possible.
Once the Nationalists were back in government in 1998, the Prime Minister and ministers started blaming the Labour government for the deficit. But gradually they forgot all about the deficit and started saying that they had a plan to reduce it and solve the problem altogether.
Year after year, Budget speech after Budget speech, Finance Minister Dalli told us that the problem was under control and in fact the PN took it off the national agenda and focused its energy on promising a bonanza with European Union membership.
More deer and horses
Then the 2003 general elections came along. Prime Minister Fenech Adami in all his speeches boasted that his government had solved the deficit problem.
In the meantime, government stopped publishing official statistics about the state of public finances. Huge PN billboards mushroomed around Malta and Gozo telling us boldly that the country's finances were on a sound footing.
The Nationalists promised that once returned to government the country would overflow with milk and honey, there would be jobs for everybody, and the country would have a brilliant government that would make Malta the envy of the world with its excellent public services, economy, environmental protection, fairness and prosperity for everybody.
Once the 2003 elections passed, the Nationalist government started talking about the budget deficit again. Government's official statistics show that the deficit had risen to Lm136 million (11% of GDP) in 2003.
The PN billboard "Finanzi fis-sod" (sound finances) had long been dismantled and many public squares resounding with these words re-echoed by Prime Minister Fenech Adami had long felt silent.
Last Monday evening I could not help smiling when I heard Finance Minister and Prime Minister Gonzi boast how his government is controlling the budget deficit and that by the time the next general election comes along, the deficit would be lower than three per cent of GDP.
I have no doubt that the official statistics would show this before the general elections. I have no doubt that during the coming election campaign the Nationalists will erect billboards with some kind of variation on the "Finanzi fis-sod" theme. I have no doubt that Dr Gonzi would boast in his campaign speeches that his government has solved the deficit problem.
But I have no doubt equally that the next government to be elected would once again discover the deficit problem. There are still very serious deficiencies in the way in which government draws up its accounts.
As Christopher Mayl wrote six years ago in The State of Malta's Economy - An Accountant's Perspective, government's accounts "are calculated on the basis of actual receipts and payments. Amounts owing to or by the government are ignored; this means that departures from budget can be hidden for a year or more."
One-off sales of government shares are shown as ordinary revenue. For at least 10 years the Nationalist government has been saying that it is introducing accrual accounting to give a more exact picture of the country's finances. It still has not happened.
Apart from this, certain government expenditure, like the new collective agreement for the public service, will come into full effect after the next general election. Other hot issues with serious consequences on public finances, like the public expenditure needed to run both the Tal-Qroqq hospital and St Luke's, the viability of Malta Drydocks and Air Malta, will also rise to the top of our national agenda.
These would have to be tackled by the new government after a PN electoral campaign claiming that they have reduced the budget deficit. It might not be a bad idea to remember the Chinese proverb "Zhi lu wei ma".
evaristbartolo@hotmail.com