Sending credibility to the dogs

If the government's popularity is dropping fast because of the utility tariffs, its credibility is dropping faster. The tariffs were imposed on the Malta Council for Economic and Social Development (MCESD) with a firm declaration by the two senior ministers who concocted them as correct, final and retroactive, anti-social effect and all.

They were so final that the Finance Ministry ignored them in his budget speech. Yet changes and doubts on their reliability are emerging. The changes are not fundamental or adequate changes, but represent some shift from the finality of the ministerial duo Gatt and Fenech. It is evident that the Prime Minister is intervening more directly.

One understands why. At this stage of the political cycle he might not be losing sleep over his escalating unpopularity. But he can't be relaxed over the fact that the whole trade union movement is against him on this one, even if he seems to have managed to insert a crack in the employers' side of the MCESD.

The powerful relevance of the unions lies in the simple fact that they are speaking with one voice, careful not to drift into political shallows but determined to challenge the government's line of action by all legal means. They see the administration as having totally lost credibility on social dialogue.

On its part the government seems to be determined to denude itself of all shreds of credibility. It is projecting the broken pledge on massive income tax reductions as economic and financial wisdom. It has broken its pre-election promise to slash taxes because that would stimulate the economy, despite the fact that, against the background of global recession the economy will need all the stimuli it can get.

Not that raising the income tax bands is necessarily the best stimulus - but that was how the Prime Minister and his team put it. Now they are tacitly admitting that a fundamental plank in their economic policy was not credible. Another example lies in the reasons offered for raising utility tariffs sharply, at one go (before after-thought tinkering) and retroactively.

They are saying that the subsidies inherent in the capping mechanism were misused and unjustified. A policy devised by them and implemented under the guise of a wise cushion to major operators is now declared to be wasteful and bankrupt.

When a government strips itself of credibility in that manner, it is hard for it to be convincing that it is moving forward. It is certainly not convincing anyone that its policy to hammer the suffering public with higher costs made up of car circulation tax, licences, arbitrarily higher diesel, petrol prices and utility tariffs makes a euro cent's worth of sense.

Nor is it making sense in keeping the public, business people and families in the dark about the actual rates of increases being applied with effect from seven weeks ago. Families have to plan. Business people have to cost their supplies.

They cannot, because the government is not handing out the details, which are being exposed as possibly incorrect in important regards. The government should issue simple facts to indicate rates, the increases inherent in them, and their cost and impact. Instead it is handing out hot air of grey and darkness, and not managing to counter arguments that the figures used to calculate the new tariffs are faulty.

The Nationalist government has rarely been in such a mess, since it took office in May 1987. It may take time for it to pay the full political price for it but, unluckily for the people, the policy mess is coinciding with a tidal wave of economic and financial uncertainty which is already touching our economic and social shores.

The Prime Minister accused the Opposition Leader that, in his reply to the budget speech, he ignored the parlous state of the world economy. That cannot be a credible charge, in the context of what the government is doing to make things worse for Malta and its people.