'Leadking' without serious intent

Winding up the Budget debate on the motion for the House to go into committee of supplies, Prime Minister Lawrence Gonzi demonstrated what an accomplished speaker he has developed into. He had a written text, but often departed from it to elaborate with gusto and uninterrupted linkage.

For all that, style could not conquer over content. Gonzi's speech last Wednesday was one of least telling he has ever delivered in terms of content. That was confirmed by the extent to which he raised the decibels, literally shouting through considerable parts of his delivery.

The Prime Minister opened well, on a theme of the effectiveness of unity when it is practised. Rather strangely, he moved on to do his best to prove that the government has been following some wrong key policies for at least four years.

Whereas the Finance Minister had not referred at all to the hike in utility tariffs imposed at one go and retroactively over the heads of the social partners, the Prime Minister had to defend and quickly made that his central theme, alongside with trying to rubbish the reply to the Budget Speech made by opposition leader Joseph Muscat last Monday. He asserted as forcibly as he could that removing subsidies was the right choice as it helped to maintain and create employment.

That sounded odd to producers and suppliers of goods and services left aghast by the cost of the suddenness and extent of the switch in the administration's energy and water policy. That policy had been one of constant neglect. Over the years, tariffs were not revised, notwithstanding heavy investment made to produce water and electricity by reverse osmosis and through a new power station at Delimara.

Tariffs were revised four years ago through the introduction of a surcharge, set to vary with fluctuations in the price of crude oil and derivatives relative to Malta's overall consumption of fuel. The surcharge was proclaimed to be an exemplary mechanism, more effective than bringing about a gradual change through tariffs. A capping mechanism was worked out to aid high water and energy consumers. That mechanism was presented as an essential buffer to costs, and the protector of those companies which benefited from the inherent subsidy.

Last Wednesday, Gonzi repeated the message that subsidies were bad and so had to be removed presto. He did not beat his breast to admit it was his fault. He spoke about subsidies as if they had been introduced by someone else. He went up blind alleys and stayed there. Gonzi said that the government had paid heed to the social partners and was staggering the impact of the high tariffs.

What he meant, of course, was that the government is staggering the impact for high industrial consumers. Other business consumers and the whole domestic family base have to pay the humped-up tariffs with retroactive effect from October 1, even if the actual rates have yet to be made definite and are making it impossible for business people and families to plan their outlays and, for the former, to reflect them in their supply prices.

The Prime Minister looked and sounded self-assured. That was not equivalent to being convincing. He was selective on the tariffs and did not persuade by what he said, failing to demonstrate how choosing high tariffs and nil subsidies equated to creating employment.

By trying to make light of the effect of higher electricity rates, making it sound as if energy saving bulbs would truly result in lower bills higher tariffs notwithstanding, he was giving further hostages to fortune.

Aside from the gaps in his tariffs argumentation, Gonzi left very discernible gaps in the part of his speech where he replied to the opposition leader. Trying to make him look inexperienced in comparison to his predecessor was a cheap fare which did not buy the required ride.

Moreover, it did not hide the fact that most of Muscat's points were left unanswered. In particular, Gonzi did not visit the shortfalls in 2007 capital spending and that forecast for 2008. The capital budget is by far the most important aspect of the annual exercise in preparing the expenditure estimates. Recurrent expenditure is largely non-discretionary. Discretionary spending is left mostly to the capital budget, which is a foremost economic tool in a government's policy armoury.

That is evident in the capital proposals in the 2009 Budget, many of them good ones in themselves - if they are carried out. If not, they will be more dead figures and letters. Nor did the Prime Minister attempt to explain the madness of raising the cost of petrol and diesel - by some three per cent - at a time when, under the weight of a high surcharge up to September 30 and hiked up tariffs from October 1, everyone was clamouring for them to come down, in parallel with the dropping price of crude oil and its derivatives.

The Prime Minister tried to undermine the opposition leader by implying that he had been given a copy of the latter's budget reply on the sly, to suggest that the MLP was riddled with leaks. Even if Gonzi really had a copy of Muscat's speech, that offers no solace to the multitude who feel that the 2009 Budget, while good in some of its greener objectives, is disproportionate and untimely in other regards. Politics and economic gain and pain are made of more serious stuff than leaks.