Labour leader Alfred Sant tells Herman Grech his party is all set to assume power in a fortnight.

Are you happy with Labour's campaign so far?

Very happy. It's proceeding smoothly in a calm and dignified way. We are getting the message across to people.

The Labour Party has been saying for months that it's well prepared for an election but it seems to be re-tuning certain policies along the campaign.

Not at all. What we're doing is spelling out the details. We're dotting the i's and crossing the t's.

What about the fact that your party included some four issues in its electoral manifesto which had already been adopted by the Government?

There were two issues which slipped out of the computer because there was a malfunction, but that's been changed. Look at the PN manifesto - you can call it a repeater's manifesto. There are about 12 to 14 issues they have been promising for I don't know how many years.

So you wouldn't say you are ill-prepared in this campaign?

We find ourselves over-prepared sometimes.

In what way?

We have some other ammunition up our sleeve, which we (haven't found) time to release yet.

You said would like to negotiate new conditions with the EU for the dockyards and the agriculture sector. What you're saying is practically impossible.

We'd go to the EU and say 'look, on these two areas we have problems'. They are problems which relate to Malta's national interest and therefore problems which relate to the EU's national interest. Similar to countries like France, Greece and Spain, we will discuss how we'll get out of the problems we face.

These two issues are specifically entrenched in Malta's negotiations with the EU. They're in a package which cannot be changed.

That's what you're saying.

No, that's what the EU is saying.

The agreements themselves say that under specific conditions, you can discuss issues like the disruptions in terms of state aid.

But you are aware that it is just one country which has managed to re-negotiate its package - and that was during the re-unification of Germany.

Look at what France has been doing, for instance, for its pig farms in Brittany, where it's been in breach of the Treaty of Rome for I don't know how many years - and that's taken for granted. Look at what Portugal has done with its subsidies for shipyards. Look at what Greece has done for its olive oil industry. These are issues that you discuss within the framework of being a full member and in full trust.

But you're talking within the context of the reform treaty. For example, in the case of Austria they are negotiating the 'invasion' of German students. That's different. It's not in the Accession Treaty.

Nothing is different. Once you're within the EU acquis and you have a problem that affects the national interest, then you're entitled to raise it.

Isn't it rather preposterous that Labour wants to renegotiate certain chapters, when it had every opportunity to do so within the context of MEUSAC prior to membership?

We're talking about today. Let's talk about solutions that relate to today's context, not five years ago.

What's changed? You're saying that you want subsidies for the drydocks. The government did manage to get subsidies until the end of this year.

We're saying that there are national problems for the shipyards; there are problems with farming and farmers - as of now, in today's world!

Don't you think that €1 billion in subsidies for the drydocks spanning over five years is enough?

One of the problems is that the investment programme contemplated for the drydocks has not been implemented, so we have to take that into account.

Aren't you put off by the fact that Commission spokesmen are already saying that what you're trying to re-negotiate is impossible?

No.

Why?

Because it's not the way things are done... You don't send a journalist to ask Commission spokesmen. This is a political issue relating to the national interest that's discussed between member states and the Commission.

Do you now accept the fact that EU membership in 2004 was a good thing for Malta?

It was a decision taken by the Maltese people. We have respected it and we are fully in line to make it a success.

Do you acknowledge now that it was a good thing for Malta?

I don't have to acknowledge anything. I have to say that the Maltese decided - and democratically we accepted.

Was it bad for the country?

I don't have to deliver judgment. We want to make it a success.

We've been in the EU for nearly four years - you surely have to have an opinion if EU membership was good, if there are things to be improved, if it was a disaster...

There are things which need to be improved. There are things which have not been done as well as they should have and we want to make it a success.

Do you have any regrets specifically about the EU?

In politics you look forward.

Do you fear that your obstinate opposition to EU membership will forever haunt your party?

Nothing haunts the Labour Party. The party has quite a good record of achievements in the social, economic and cultural sphere.

One of the Labour Party's electoral battle cries is its zero tolerance to corruption. How would you define corruption?

Corruption is when you gain economic advantage for yourself or your family, financial advancements, in terms of contacts, the way you manipulate the public system, the kickbacks you get from contracts... how you can eventually become rich.

One of your party's billboards depicts the faces of the PN Cabinet with the word 'corruption' on top. Do you have proof to back up these claims?

Well, look at (Infrastructure Minister) Ninu Zammit. He got €163,000 (Lm70,000) compensation for something which happened in 1987/1988 using a law that came into force in 1992.

Is that corruption?

Of course. One of the first things you do when you're a minister is that you watch out and be transparent with what you do with your personal affairs. And if you get something out of the system which really doesn't belong to you...

What about the other people on the billboard? You've got (Health Minister) Louis Deguara, (Tourism Minister) Francis Zammit Dimech. Are they corrupt?

Look at Francis Zammit Dimech, for instance. Part of the kickbacks from the MTV concert contracts went into his campaign. He used Where's Everybody financed through the MTV campaign to finance his own public relations campaign. Isn't that corruption?

Do you have proof for this?

Well, we'll show it if people ask us for it.

I'm asking you. Can I see it?

It's well-known all over the place.

Where?

In Malta.

If I ask you that I'd like to see this evidence of corruption, would you give it to me?

It's not evidence. It's something that people know.

There's a difference between people 'knowing it' and actually seeing it (the evidence). They 'know it' because they hear you say it.

As an investigative, independent journalist you should know about these rumours and claims and investigate them. That's why corruption grows.

You also insinuated that (Parliamentary Secretary) Tonio Fenech was connected with maladministration and corruption in connection with the Good Causes Fund...

Maladministration and corruption are related. Come off it. If you have a Good Causes Fund to supposedly aid causes that go towards the Renal Unit, orphanages and so on, and then you give €20,000 to guys who are supposedly in business, like Eddie Aquilina, the guy who publishes big coffee table books. He is a PN stalwart. Why does that happen? Don't tell me that's not related to corruption. Of course it is!

Funds from the Good Causes Fund are not precluded from going to commercial companies as long as the purpose falls within its terms of reference.

The guidelines are drawn up by the Finance Ministry. The guy who runs the Good Causes Fund as chairman is Tonio Fenech's sidekick. Come off it. Then who gets some of those funds? Guys like Eddie Aquilina, of course.

What you are saying then is that you are convinced that each of those people depicted on that billboard is corrupt.

Certain maladministration, certain malpractice, which encourages corruption.

But the word used is 'corruption', not 'maladministration'.

As Eddie Fenech Adami once said: if you tolerate corruption, then you're corrupt yourself.

So you're convinced that the Cabinet is corrupt.

Yes.

Are you convinced each one of your candidates has a clean track record?

If they don't have a clean track record and I get to know about it, and the party gets to know about it, they'll have to leave.

Have you checked whether all your candidates are really clean?

We know they're clean. If we have proof to the contrary, they will leave.

Is this something which will happen even if you're in Government?

Of course.

The Labour Party is suggesting slashing the surcharge by half. Malta needs to cut down its emissions or else potentially face EU fines. Isn't your proposal effectively giving carte blanche to waste electricity?

One of the problems is that people have too many burdens to bear at the moment. The charge is quite high. If you look at it in terms of purchasing power parity on an EU scale with half the surcharge off, we'd still be some 30 per cent above the EU average. That's quite a high charge. Certainly we won't be encouraging excess consumption.

Do you think the move is effective considering 30,000 families are already excluded from paying the surcharge?

That figure is inflated. I got a phonecall from one of those 30,000 who told me that the vouchers they sent her apply to only part of her consumption. They don't care that she has four kids. What we're telling these people is if the voucher system works better for you, keep it. If the reduction of the surcharge by half is better for you, go for that.

Do you think this is an incentive for the economy?

That's what the GRTU said. We also had talks with the FOI, which also claimed that it would help industry quite a bit.

Why did you decide to include businesses in the equation after journalists asked you about it?

Not at all. We were just discussing families at that stage of the campaign and a week after that we went to the productive sector. With businesses you give income tax credit, which is something we discussed with the GRTU.

So it doesn't come across as some kind of afterthought?

Not after the declarations we have been making for the last two years or so.

Yesterday you gave a guarantee that your Government will not increase the actual water and electricity rates. Why did it have to take so long?

Because I always found that question unnecessary. Isn't it obvious they wouldn't be changed? But my advisers told me it's better to say it because the other side is going to say that you're going to increase tariffs.

But you do have a track record - you increased tariffs when the price of oil was around $15 a barrel. Now it's gone up to $100 a barrel.

What does that prove?

It proves that you can increase them once again.

We never talked about utilities before 1996. But we got into Government and found a big mess. That was the situation then. It's not the situation now. It's a different ball game.

Can you give a guarantee that the surcharge won't increase in the next five years?

Yes.

What will you do if the price of oil shoots up to $150 a barrel?

I've just given the guarantee. I will implement that guarantee.

Even if it goes up to $150 a barrel?

I'll implement the guarantee.

Isn't it financially irresponsible to do that?

No.

Why?

Because it's not.

That will cost you millions.

Why don't you ask if the price of oil goes up 1,000 per cent. You can keep asking these questions. It's a guarantee we're giving.

Are you also guaranteeing that you won't introduce another tax to compensate?

Look, what we're saying is this: we're going to finance this out of the public budget and that's how it's going to happen. Do you ask someone who is introducing a big income tax rebate if he is going to increase another tax to do it?

Where will you get the money from?

From the public budget. We're projecting an increase in the economy of four to six per cent annually on a real basis. On that basis, we will increase the normal tax stake through growth. That's how things should be financed in this country. It could work through a pincer movement in order to relieve tax burdens. But you do it slowly to get consumption moving, to get investment.

The Nationalist Party is recommending the reduction of the maximum income tax rate by 10 per cent. Do you fear people will be more inclined towards the PN because of this measure?

I don't fear these things. People have to choose. We've been saying that tax containment and reduction is part of our objective. But first we have to get real growth moving. So you implement those measures, which help growth and then when growth starts moving forward you do your best not just to contain tax burdens but to reduce them.

Would a Labour Government contemplate moving the tax bands?

We've already said we will study it and implement it when there is economic growth.

You said earlier that when you were in Government 11 years ago the finances were different. Do you acknowledge that the finances are now on a sound basis?

In terms of cash flow, yes. But in terms of how that cash flow is being generated it's powerless. Much of our cash flow is based on huge tax increases. Five years ago, the Nationalists said there was a sound economy. Three months later they increased the VAT rate from 15 per cent to 18 per cent. That, and the other tax burdens they increased along the years led to an increase in the direct taxation burden on families and on financial enterprises of around Lm50 million to Lm60 million a year. That means we are a highly taxed society. Over the last three to four years the rate of growth of taxes was among the highest in the EU.

There is a lot of talk about a potential coalition in the next Government. Are you ruling out a coalition with AD or AN?

I don't discuss hypothetical questions.

It could happen within three weeks. The Prime Minister effectively ruled it out...

Let it happen and we will discuss.

If one of the small parties had to give you the balance of power, would you contemplate it?

We don't discuss power terms in this context. Let it happen and we will discuss.

You've just been through a major ordeal health-wise. Is politics the be-all-and-end-all for you?

Life is the be-all-and-end-all for everybody and you have to have a life, which is satisfying to yourself and that is contributing to the rest of society. So politics are part of the way you could live a good life.

How important is politics for you?

Ninety per cent... at this stage.

So it's practically the be-all and end-all for you?

No, 10 per cent is very important.

Is your political career putting your health at risk?

Not at all.

What you're suffering from is very serious.

No, I've been through it now. I have been successfully operated on. I'm in the process of consolidating that successful operation, so it's part of life.

So what you're saying is that the worst is over and that it should not be an issue for you for the next five years.

Definitely not (an issue).

Do you have any regrets throughout your 16 years as leader of the Labour Party?

Not at all. I think that one has to accept responsibility for one's decisions and that regretting one thing or another is irrelevant to how political decisions are made.

What would you list as your biggest success and your biggest failure?

The biggest success is making Malta realise that we need to be modern, that we need to move forward and do away with the mentality of 'you scratch my back and I scratch yours'. People now want merit. Throughout my life I've insisted that merit should form the basis of decisions.

What about your biggest disappointments?

My biggest disappointment is that we didn't move fast enough on this track.

Do you regret any policy that you had, that you might have believed in?

Not regret... but people tell us that between 1996 and 1998 we had good policies and we moved too fast. In politics you realise that speed is important but fast forward, can sometimes be not so effective.

Would you list your stand on the EU as one of your biggest mistakes?

I don't list that as one of the mistakes or the successes. It's something which the Opposition put forward and people decided.

So you have no regrets about that?

No.

In two weeks' time, we'll have a new government. You might be sworn in as Prime Minister or Leader of the Opposition. You will tell me that it's speculative to ask you what you will you do if you lose the election. But it's a reality.

It's a hypothetical question and I don't reply to a hypothetical question.

Are you convinced Labour will win?

I don't reply to hypothetical questions.

Let me re-word it. Are you optimistic Labour will win?

Yes, definitely. I think we stand a very good chance of being chosen this time round. We're running a very good campaign and people are understanding that Labour's the best option.

Watch the full interview at www.timesofmalta.com.

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