Credible promises, incredible threats

Credibility is the key commodity in politics as much as in economics. Busi­nesses, investors, workers and households demand that politicians make proposals that are credible, especially when it comes to basic issues that affect their livelihood. Jobs, choice on the market, educational opportunities, access to health and other social services can be easily compromised through promises that lead to the squandering of scarce resources or through decisions that frighten away investment and job creation.

The build-up towards the presentation of the Budget for 2013, the contents of the Budget themselves and the ensuing debate have shown pretty clearly on which side of the political divide credibility can be found. It is consequently equally clear that the other side is not only not credible but poses incredible threats to our future economic and social well-being.

One non-credible promise pledged from the side of the Opposition is that, once in power, it would retain the good elements of the Budget. But, one may ask, “good” for whom?

Is the significant increase in health expenditure “good” for the Opposition? Probably so, therefore, they could opt to retain it. Are the myriad initiatives at the social level, ranging from the protection of children to the safeguarding of the well-being of the elderly, “good”? One should think so, thus, one hopes that the Opposition would opt to keep them as well. Is the significant easing of income tax burdens, which will leave much spending and job-generation power to the swelling middle class in Malta, “good”? Well, perhaps somewhat reluctantly, as a recent utterance by the party spokesman for the economy would lead us to believe, but to appease the voting masses the Opposition might concede that the measure was “good”.

So the Budget for 2013 is invariably “good” and the Opposition can be trusted to go ahead with it if it gains power. Or not?

What about the non-credible promises? Such as the criticism already being levelled by the Opposition at the use of selective indirect taxes on harmful products to sustain government finances? Or the persistent claim that energy costs are leading to extreme poverty in Malta?

The Opposition seems to make a lot of fuss about the need to tackle these issues. At best, this fuss is a non-credible promise. How can one keep the “good” elements of the Budget and abdicate all responsibility for sound management of public finances by harping on such issues? If, through sheer stubbornness against all good sense, the Opposition continues to insist on its pet policies, then there is a concrete risk that its non-credible promises would turn into incredible threats for the country.

But, there again, if in government, the Labour Party may perhaps start seeing things differently, more responsibly given that it would be wielding the reins of power. But does its track record lead us to believe this?

The saga of VAT is a clear eye-opener. After mounting a crusade for its removal, pandering to the narrow self-interests of certain groups, the PL in government, in 1996, realised that, after all, the country needed such a taxation system, with the result that we ended up with a hotchpotch mechanism that, ultimately, cost the state millions of euros, leaving no one really better off. This was a clear example of a non-credible promise turning into an incredible threat through abysmally feeble governance.

And the story continues with the PL consistently and stubbornly persisting in maintaining non-credible positions that ran against the best interests of the country, starting from the question of EU membership to the adoption of the euro, and with the leader of the party in those times now looking towards representing our country as an MEP.

More recently, we were startled by the obvious inconsistencies from the Opposition considering its clamoring for a so-called “living” wage and then calling for a freeze of the minimum wage.

The Nationalist Party in government has an unquestionable track record of 25 years of job creation, investment, income growth, environmental improvements and increased social, health and education benefits. It is a record that is especially remarkable in the context of the global economic turmoil of the past five years.

The PL, on the other hand, can only be expected to regale us with non-credible promises that are most likely to turn into incredible threats should it come to power.

The crucial choice available to each and every one of us cannot be any clearer than this.

Kristy Debono is an economist and a PN candidate on the ninth district.