Sant sees 'magic' in official figures

Opposition leader Alfred Sant yesterday demanded seriousness in the way official statistics were compiled, saying the ship of state could not be navigated using a compass which was not properly calibrated.

Speaking in Parliament, Dr Sant said proper national statistics were an essential tool for economic planning. Every serious country therefore ensured that the compilation of its statistics was without problems or controversy. Once, in Malta, the National Statistics Office (NSO) fell under the government, the Prime Minister needed to shoulder responsibility for the current state of affairs.

Over the recent past there had been a considerable increase in complaints and doubts over the way statistics were compiled, with the suspicion being that they did not reflect reality but short term considerations based on political calculations.

For example, there was confusion over whether statistics on national finance were calculated on a cash or accruals basis. Some statistics reaching Brussels were apparently based on accruals when in the House the figures were presented on a cash basis.

A clear explanation was needed, but his information was that there was an ultra-secret unit within the Ministry of Finance which worked on such matters and kept everything under wraps.

Another area of concern was over the calculation of the cost of living, which was sometimes presented on an annual basis, a monthly basis or a moving average. Sometimes, when it suited some people, the EU's harmonised index was used, but this was not suitable for Malta because of the tourism factor. Malta hardly had any domestic tourism and its facilities were used only by foreigners. The figures therefore fluctuated widely according to seasonality and impacted strongly on the local index.

An attempt was also made, three or four years ago, to change the way tourism revenue and arrivals were calculated in an attempt to make recent declines seem smaller. Again no explanation was given on the new method, which was used in the most abusive and non-transparent manner.

In another case, the ETC had repeatedly changed the way it presented its employment statistics over the past two or three years.

In all these cases he was not blaming anyone because the duty of the employees was to follow the political directions of their superiors, in this case the government, Dr Sant said.

Some argued that methodology had to change to align it with EU norms. But seriousness demanded that for a transitional period, figures should be presented both under the old and the new methods. This was not currently being done and no explanations were given.

These method changes were being used as a screen, with the statistics being used as a political tool. One could see where this confusion was heading - the government wanted to make the people feel what might or might not exist.

The Prime Minister had claimed that 6,000 new jobs had been created over the past year. This had not resulted from the figures. Then suddenly, like magic, the figures for the same period started to change.

Another well known example was how the NSO had, after he had spoken in Parliament, owed up to an Lm88 million mistake in the deficit figure for 1996.

How could one not suspect that this playing about had "magical intentions" to fit strategies or political aims?

Changing statistics which went back several years affected more recent figures, but even this was not being recognised, Dr Sant continued.

A blatant example related to the gross domestic product. Without warning the method used to measure GDP was revised for the past 10 years with substantial changes until 2005. As a result, some sectors of the economy were now being made out to have been smaller than stated for years, but they grew strongly when Dr Gonzi took office.

Later this week the MLP would be publishing a technical study to show the incoherence and contradictions that stemmed from the way economic performance was being calculated.

Dr Sant said serious explanations also needed to be given about the employment figures published this week.

According to the Labour Force Survey published by the NSO, between June and September 2006 employment grew by 1,739. Tourism performed worse last year than in 2005. Yet according to the official figures during the same period in 2005 jobs had declined by 1,080.

Last summer was miraculous if the official figures were to be believed. Whereas in the year up to June 2006 the statistics showed an increase of 1,222 jobs of which only 73 were full time, between September 2005 and September 2006 jobs increased by 4,041 of which 3,218 were full time. The strongest increases were in the wholesale and retail sector, which grew by 3,448 and public administration, with 2,948.

Then ETC figures, also published by the NSO showed that full time employment in the wholesale and retail sector in the year up to July 2006 grew by only 22.

According to the Labour Force Survey, private sector jobs increased by 5,700, of which 2,000 represented the transfer of Maltacom to the private sector. Therefore the public sector declined by 1,600. Yet other figures in the same press release issued by the NSO showed that the main areas of the public sector, such as power, gas, water, public administration, education and health grew by some 3,700 jobs, meaning a net increase in public sector jobs of 1,600 and not a decline of 1,600.

Concluding, Dr Sant said Dr Gonzi needed to assume responsibility for what was happening and act to restore professionalism and credibility in national statistics.