Principally for jobs

The debate starting today about the Gonzi budget for 2007 will include controversy over what the data being published under the auspices of the National Statistics Office (NSO) actually mean. The Prime Minister, his political colleagues and the pro-PN media within the English language press, will claim that the criticism advanced by the opposition and others amount to jeremiads made with a purpose.

They will proclaim to high heaven that the data about economic and financial performance released this evening show that Malta is shaping up. The government's "strategy" is giving results. We will be witnessing a big PR effort to bolster up this argument, independently of the other blitz that should happen, regarding the measures to be announced for the reduction of income tax burdens, overdue and significant cuts in the fuel and utilities surcharges, plus the elimination or almost of the departure tax.

Now, insofar as economic data is concerned, there is a case to make about how this data is being collated, presented and subsequently revised. As the Gonzi administration claims drastic improvements in the state of government finances or in overall economic performance, it is legitimate and important to ask questions about how data is being put together. Inconsistency and incoherence are emerging in data being assembled and presented. For instance, it is totally unclear how accruals on government expenditures are being estimated. They appear nowhere on data published for Maltese consumption but then accrual estimates about Malta's public finance have started to feature in the statistical publications released by Eurostat, the EU's statistical agency. How are these being arrived at? Who carries them out?

Similarly, there remain big questions about the relationship between economic growth figures and the sectoral sources that should be contributing to the growth being posted. As most industrial sectors report a shrinkage of activity and tourism remains in the doldrums, where is the growth being published by the National Statistical Office coming from?

These are legitimate questions. They have never been faced honestly and are usually fudged by the government. Understandably, Dr Gonzi and his merry men believe that few citizens can follow the technical arguments that underpin the queries and feel it is easier to ignore the whole matter. Certainly, people are mostly interested in the impact of economic performance on their everyday lives, not in (to them) abstruse debates about statistics. In a situation where feel good comes natural to most people because an economy is booming, such a conclusion raises few eyebrows. Difficulties arise when the reality of economic stagnation - which contradicts the view given by the official data about national performance - is palpably being voiced by myriad operators and workers.

In business, especially the tourism and SME sectors, there is a widespread feeling that we are running into a crisis. Meanwhile, middle and lower income families report that never have they faced such a bleak situation.

The discrepancy between what people say they are experiencing and what the Gonzi administration, on the back of NSO statistics, declares is happening in the economy is curious, to put it mildly. The ways and means by which the NSO conducts its exercises, inclusive of the frequent revisions to which it subjects already published data, surely merit some kind of audit.

Friends and colleagues of mine agree that this should eventually be done. However they argue that quite a number of well-intentioned people, in all good faith, are prone to take official pronouncements at face value. They might feel that to question, at this stage, the validity of NSO data smacks too much of partisan positioning. And there will be media editorialists and punters for the PN to encourage this feeling. Therefore, it is best to take the data published as given and analyse it for what it is worth. For the data published by the NSO, even when taken at face value, lead to conclusions that are far different to those the government would like to get accepted by the public at large.

I find this a very interesting concept and will try to take it on board in the coming days. Still, there must be a benchmark against which to set current performance, even if one "accepts" all that the Gonzi administration claims as happening to be Gospel truth. What should this benchmark be?

Were I to reply to this question in academic terms, I would say: focus on the reality or otherwise of the public deficit which the Gonzi administration has declared it has solved, after for long years having equally declared that Maltese public finances were "sound". My hunch is that we still have a big financial problem, not least because of the accruals question, which should have been tackled as of 1998 according to PN election manifestos, and was shelved year in, year out.

But again, I accept that such analyses find little resonance with people whose lives are far removed from the technocratic intricacies of budget deficits. They are rightly more concerned about how economic performance impacts on job creation and job opportunities.

So, yes, expect in coming days that the Labour opposition will focus on the Gonzi administration's own data as presented by the NSO. It will do so from one perspective: principally jobs. Are the claims being made by Prime Minister Gonzi about how he is managing to create jobs borne out by the very data he will be publishing with the budget for 2007?

That could be a crucial question in the coming two years.