Sugar tax on luxury life
There are several reasons why we shouldn’t wish our politicians to be like Mario Monti. Italy’s Prime Minister is unelected, presides over the European economy next in line for horrific headlines and, given its size, his shoulders are burdened by the entire continent’s concerns. But we should wish they were like him in at least one respect.
Mr Monti doesn’t just talk about what needs to be done to dig his country out of a hole. He also talks about how he’d like the country to develop once it does get out.
That may not seem any different from our politicians. But whereas they speak airily in terms of excellence and rising standards, Mr Monti points to a specific model: Denmark, its “society, economy and civility”.
That’s unlike a general promise to raise the quality of life, let alone to become “the best in Europe”. I don’t know about you but the latter leaves me unsure whether this really includes everything, from besting Italy in artisanal goods and ice cream, to beating Germany in manufacturing, surpassing Finland in education and outstripping France in health care, restaurants and afternoon sex.
We can’t just have what they’re having without being prepared to give what they’re giving for it. As our fellow Mediterraneans can tell us with hard-earned authority, there’s no dolce vita without, sooner or later, a sugar tax. Yet, our politicians habitually tell us nothing that answers the elementary question asked by all but the richest shoppers in a luxury mall, by any child who wants to become the best tennis player or pianist: What price are we prepared to pay?
When Mr Monti speaks about Denmark, he is sticking his neck out. It’s a country that has made trade-offs not everyone will agree with. Danish social security is “flexicurity”. Its aim is not just to help people to get into work; it’s meant to prod them. Single mothers can count on high-quality childcare – perhaps really the best in Europe – but not on long-term public housing.
The state is socially protectionist but the top rate of income tax is almost 60 per cent and VAT is 25 per cent. The protective zeal is such that it’s not just tobacco that’s discouraged by special taxation; sugar and saturated fats are too. Dear friends, that includes the simple pleasures of cornetti, pizza, cheese, salami and panna cotta.
Mr Monti obviously knows that Italian culture and sociability are not Nordic. In shining a light on Denmark, he is also strongly implying that Italians need to change their ways. The best cannot come without self-criticism and personal change. Indeed, the very idea of what is valued as “best” may need to change. Italians may be better off being happy with what makes Danes happy. My Italian brothers, is it such a dog’s life to be a great Dane? The point here isn’t that his model is Denmark, as opposed to France, Germany or Malta. It’s that he’s pointing to a specific model, specific and real enough to enable one to agree or disagree. One may deeply resent the technocrat’s assumption that it’s people who have to adapt to the rules, not the other way round. But one can only respect the clarity with which Mr Monti knows and states his preference.
Of course, it helps that he doesn’t have to run for election. So let us ourselves lower the bar for our politicians. Let them get away with congratulating us for being worthy of their trust and plans. Let us simply ask that they indicate an economic precedent for what they propose. Would we get a real answer?
Part of the answer, we can guess, will be that Malta, as a mini state, is a special case. And they’d have a point.
Another part of the answer – we’ve managed before, or, at least our party in government did – is less satisfactory. What was achieved in the past was acquired in a different economy: our comparative advantages, demographic profile, Malta-based firms’ competitiveness and economic climate and instruments were all different.
If and after we weather this storm, we would still need to embark on important reforms to guarantee funding for pensions, quality childcare centres and education, health care... Reforms are needed because it is evident that they cannot continue to be funded as they were in the past. So pointing to past performance is an empty gesture.
Let us voters respect our own intelligence and tell the politicians that we know: there’s no dolce vita going for free. If we’re being sold an electoral promise funded in a way that’s unprecedented elsewhere (and, therefore, untested), then we should be told.
No EU member state has, for example, combined a relatively low tax regime like ours with a real commitment to equality. Elsewhere, equality requires a higher tax regime. Low-tax societies are unequal societies.
No one – but no one – has managed to increase long-term social spending just by cutting waste and growing the economy. Not even the most competent government can guarantee raising GDP when it’s so vulnerable to international events. But perhaps we can.
Still, I expect to be given a straight answer if I ask whether I am to be part of a great sweet experiment in the art of living.