Bailout government

At a time when governments around the world are bending over backwards to prevent their economies from falling victim to the crisis, our national government is doing its best to create yet another crisis.

Had it not been such a tragedy, it might have been mistaken for a comic twist in what is increasingly looking like the erratic management of our economy.

The common phenomenon that we are observing in the mainstream Western economies is that of taxpayers bailing out key market players. In contrast, in Malta we have a situation where taxpayers are bailing out the government. In other words, while elsewhere the government is bailing out the economy, in Malta the economy is bailing out the government.

The common denominator of both the global market players and this government is misguided decision-making.

The way in which the Nationalist government is making crucial decisions - and their timing - speaks volumes about the policymakers' vision for our economy. They both show that the government's priority is not a vibrant economy.

Let us assume for one moment that Lawrence Gonzi's take on the utility bills hike is spot on. Then again, I submit, the government should have postponed the whole exercise in view of the current global scenario. Exceptional times call for exceptional measures. In this case, the present government is resorting to irrational ones.

Could someone explain the rationale of the government's proposal to start implementing the new energy tariffs - whatever they might be - retroactively?

That might actually mean that there are operations that are running at a loss without them even knowing!

Such an irresponsible decision not only flies in the face of the basic budgeting concepts but leads to uncertainty, artificial inflation and decrease in demand. This is because, while enterprises might be tempted to increase prices in order to make up for potential but yet unconfirmed increases, consumers will likely tone down their purchasing patterns.

The least the government can do is to remove the retroactive element from any proposal.

Last week, the Brent sank below the $85 mark.

During a Nationalist Party event, the government minister responsible for the sector had pledged to reduce the energy surcharge had the price gone below this level.

He received his fair share of clapping. Two days later he ran for cover when he wrote that what he really meant was that the price drop should be consistent over an unspecified period of time.

Did the minister hold his breath?

After making a mess of the American and global economy, the Republicans' only hope at retaining power is that of sowing doubts on whether Barack Obama has got what it takes to manage the world's greatest economy.

They say that he does not have the experience, the guts, the credentials and whatever you might think of.

The American people must show whether they are buying these arguments from the conservative bloc or whether they are in for real change.

The government has published correspondence with the Police Commissioner to justify its silence over the Mitts espionage allegations.

In doing so, it brushed off media reports on the subject.

Hardly the best way to avoid commenting on the subject.

I was deeply saddened to learn that a memorial to Ġużè Ellul Mercer in Msida was targeted by vandals.

Mr Ellul Mercer gave his life to the social-democrat ideal. He was one politician who not only articulated his vision but implemented it.

I am sure that we can at least rebuild this memorial.

This is my last regular instalment in The Times for the time being. I have enjoyed writing this slot regularly since 2003.

It is now time to move on.

I would like to thank the editor and staff for their patience and flexible timelines.

Dr Muscat is Leader of the Opposition and of the Malta Labour Party.

www.josephmuscat.com