Time for plain speaking

According to the latest EU report on The Employment Situation Social Outlook, the number of people in Malta without a job has risen dramatically over the past year and could grow to 7.4 per cent before stabilising in 2011 at 7.3 per cent (January 20).

This deteriorating situation is, in part, the outcome of the ongoing global recession. But underlying local factors have precipitated matters and continue to do so. The major factor is sustained government overspending. For far too long, Malta's economy has laboured against a background of a substantial and unsustainable budgetary situation and a history of escalating debt which rose from Lm58.8 million in 1980 to a staggering €3,951 million last November.

While the government was overspending heavily, it was not managing to collect its dues. Arrears of revenue mounted from Lm128 million in 1987 to €1,189,909,644 at end 2008, according to the latest annual report of the Auditor General.

For many years, the eagle-eyed Auditor General dissected the latter figures and his findings had nothing to do with the global recession. They had and still have to do with poor financial management, non-compliance with government regulations and procedures.

Seen in this light, the latest string of annual reports by the Auditor General does not cover the bureaucracy with glory. Taken together, they amount to an indictment. There have been no effective official counter measures to remedy this situation.

In its 1993 report, the Public Service Reform Commission sought to achieve devolution of authority to be balanced with enhanced public service performance and accountability. Considerable investments were made to launch training and staff development programmes and to introduce computerisation. Some progress was discernible in patches. But many high officials who took the promotions, salary increases and even their performance bonuses, have been unequal to their responsibility, which is to see to the efficient running of the government accounting and financial management systems.

The Auditor General had occasion to make the pointed remark - not for the first time -that the timely collection and control over the extent of arrears of revenue is the responsibility of heads of department who are also the accounting officers of their departments.

The general financial regulations require heads of department to report to the Accountant General any case that might entail revenue falling unduly in arrears. The law further requires that a copy of this report is to be forwarded to the office of the Auditor General.

There have been various cases where these reports were not submitted to the financial watchdog. To cock a snook at the parliamentary watchdog is the ultimate and the question arises as to who is responsible to deal with this indiscipline.

One never hears of disciplinary action and much less of measures resulting from disciplinary procedures. On the contrary, the emerging picture has been one of nonchalance and a couldn't-care-less disregard of the law by accounting officers who seem to be assured of their collective immunity.

It is no wonder that the Auditor General laments about problems all across the government and that action to recover money due to the government is sometimes time-barred.

Clearly, the bureaucracy is in a mess. In any effort to go to the root of the matter, under-statements would be counter-productive.

The civil service continues to be afflicted with a massive management problem. For an economy confronting a structural deficit situation of unprecedented proportions and tax evasion on a big scale, the urgent need of a solution calls for action this day.

It would not be fair to lay all the blame for this situation on the bureaucracy. Malta being a parliamentary democracy, there are ministers responsible for civil servants and Parliament has a brief to scrutinise the performance of the government of the day.

From time to time, overbearing politicians have been known to domineer or to inhibit civil servants from going on the straight and narrow.

Clientelism and political partisanship have stood in the way of upright civil servants who may not have the strength or the heroic qualities to stand up to interference with their duties.

It is Parliament that has the potential to deal effectively with the two sides of the problem. On the one hand, Parliament could sustain the government of the day or even prod it into beefing up the bureaucracy and its ability to deliver. It could, at the same time, intervene if there is evidence of political pressure inhibiting the bureaucracy from performing as it should. The Public Accounts Committee could play a useful role if there is all-round political will.

In the final analysis, this is a national issue that calls for a wide measure of consensus. It is one of particular urgency and the key to understanding Malta's financial predicament and related economic issues.

The incumbent government and its potential successor have equal stakes in the matter. So has the electorate across its whole spectrum.