Labour’s two years in government have been characterised by many highs and some significant lows. Kurt Sansone analyses the government’s performance.

Joseph Muscat could very well be cutting the cake with two candles on it tomorrow at his office but there will be no champagne bottles.

The second anniversary of the Labour Party’s impressive election victory coincides with the release of the Café Premier investigation by the National Audit Office.

In its conclusions the NAO said it had “notable reservations” on the €4.2 million bailout concluded in the first six months of the new administration. And when such a statement is uttered by the Auditor General it carries significant weight far beyond the strength of the words used.

The report represents the strongest indictment yet of Labour’s two-year-old administration.

By embracing the NAO’s conclusions and admitting procedural mistakes Dr Muscat has tried to avoid brushing it off as another hiccup along the way.

Whether this approach will be effective in the long run still has to be seen but the Café Premier deal is representative of this government’s weakest link so far: good governance.

Too many questionable decisions have been taken over the past two years that have cast a bad light on the pre-electoral pledge to champion transparency and meritocracy.

From the special envoy status granted to Sai Mizzi, the Energy Minister’s wife, to the creation of new quangos and jobs for people close to Labour – William Mangion and his garage-seeking job – to unjustified reluctance in publishing public contracts – Electrogas power station agreement and the Henley and Partners passport sale concession – the pledge to embrace good governance is sounding hollow.

It may still be early in this administration’s lifetime for these concerns to start hurting Labour’s prospects in the polls but according to economics professor Lino Briguglio floating voters may start to get jittery. He argues many floating voters believed what Labour promised about meritocracy and transparency.

“They voted Labour because they did not approve of the dishonest game played by the Nationalist Party during the final two years in government... but so far these promises have not been kept.”

Prof. Briguglio says the economic results under this administration are very positive and expects government’s approval rating to be very high.

Job prospects have increased and the financial standing of middle class families has improved through income tax cuts, lower utility bills and free childcare. This cohort of voters, among which Dr Muscat made significant inroads with his brand of moderate politics, are better off than they were two years ago.

But Prof. Briguglio argues economic concerns are not the only matters that influence voter choices. He insists if this were the case the PN government would not have had such a thrashing in 2013 since the economy was not doing badly. Elections are won by the support of floating voters and switchers, he adds.

“Many voters might have switched to Labour because they saw personal gains in such a switch. Floating voters, on the other hand, are generally influenced by what they think will improve governance.”

Prof. Briguglio argues “intelligent electors” are not impressed when those in power justify their mistakes by stating that similar mistakes were also done by those previously in power. “Those in power should know that the statement ‘Two wrongs make a right’ is a logical fallacy.”

They voted Labour because they did not approve of the dishonest game played by the Nationalist Party during the final two years in government... but so far these promises have not been kept

It is an excuse often floated by government exponents and one that has started to lose its lustre two years down the line.

But Labour has other things going for it. The introduction of landmark legislation granting gay couples the right to form a civil union with the right to adopt children, the work to remove discrimination against transsexuals, the introduction of the Whistleblower’s Act and the removal of the time bar on corruption cases by politicians have been significant developments.

The government has also pushed changes to the Church-State agreement on Catholic marriages, ensuring the primacy of the civil courts over Church tribunals in annulment cases.

It has also adopted innovative social policies to encourage people to work through the tapering of unemployment and single parent benefits.

Change has characterised the past two years and in the words of former Labour deputy leader Joe Brincat, this is being done “without any trauma or tension”.

In this respect, Dr Brincat argues, it is different from the 1971 Labour government led by Dom Mintoff that brought about radical social and economic change, very often at the expense of antagonising different social groups.

He says the central concept underpinning Dr Muscat’s philosophy is the transformation of the Labour Party into a movement.

“In this way it will be catering for a wider spectrum of society but this is a process which requires more time,” Dr Brincat says.

This process may be appealing to the wider electorate but has created internal tension over what some perceive as former Nationalists benefiting at the expense of diehard supporters.

Keeping it together will be Dr Muscat’s big challenge in the next three years as he tackles concerns among the Labour grassroots that their party has departed from its socialist roots.

But Dr Brincat is dismissive of this concern, insisting socialism cannot be a fossilised philosophy and has to change with the times. He argues that low income classes need attention but this has to be done within the parameters of the EU where the market is paramount.

Socialism also means enabling rather than handing out benefits, which may be abusively received by those who do not deserve them. Widening the middle class leaves a smaller sector which needs additional care and assistance from the State

“Socialism also means enabling rather than handing out benefits, which may be abusively received by those who do not deserve them.

“Widening the middle class leaves a smaller sector which needs additional care and assistance from the State.”

But the greater affluence enjoyed by the middle class over the past two years may have left a bitter taste among pensioners.

Relieved of the high utility bills, however, pensioners have felt the brunt of income erosion as a result of low inflation, on which the annual cost of living adjustment is based. Dr Muscat did acknowledge this when addressing supporters at the Hamrun Labour club last Sunday.

“We have to aspire to the time when grandparents used to give grandchildren pocket money because they could afford it,” Dr Muscat said.

How this will be achieved has yet to be spelt out but according to Dr Brincat it may be wiser to give pensioners opportunities compatible with their state of health to earn additional income.

Tax adjustments under the previous administration had made it easier for pensioners to continue working after retirement age.

Whether this is enough is debatable.

But in its verve to make Malta the best in the EU, the Labour government may have to refocus some of its priorities over the remainder of this legislature.

In three years’ time pensioners may yet be asking how better off they could have been if the €4.2 million Café Premier splurge had been used to boost their incomes.

kurt.sansone@timesofmalta.com