While the politicians wrangle over what the budget means for the coming year, we’re also being urged to think many years ahead. But how much ahead?
The MHRA is pressing a 20-year perspective, so that we think beyond economic growth and start pondering how, as a country, we want to develop. Juanito Camilleri, the university rector, was more radical in addressing students at the beginning of the academic year.
He didn’t have the budget particularly in mind but, when he took a 30-year perspective, he was certainly talking about areas of life that will grow or wither as a result of successive budgets: health, education, technology, cultural communication, institutionalised creative thinking… Camilleri was radical because radical change – in climate, demography, healthcare and economic relationships – is what the future promises.
These long-term perspectives are useful but anything decades away tends to drift away from immediate concern. Our political conversation needs a five-year perspective – every year, not just at election time – to provoke us into clarifying what we want.
Five years isn’t long enough to make reliable predictions about the future. But it is just about right to trace the consequences of what’s germinating in the present.
And if we take three key areas – university education, health, and transport – we can see that everything in the present suggests that, if the fundamentals of each are not tackled over the next five years, these areas will face a crunch sometime around 2020.
First, university education. The various ongoing reforms and developments at the University of Malta mean this institution has enough momentum to keep growing for the next five years. However, that very growth raises the question: will the State be able to afford to support this institution financially beyond 2020?
Currently, the university is around 20 per cent self-financing; the State forks the remainder 80 per cent. There is very little fat to cut out. Some 87 per cent of theuniversity’s budget goes on salaries, which are moderate, and with noover-manning. Operational expenditure is also disciplined.
Higher education, health and transport are not the only areas that we should submit to scrutiny from a 2020 perspective. But they are a start, not least because they are fundamental to the resilience of our economy to external cyclical shocks
Only some five per cent of its total budget goes into financing research. That low figure prevents the university from embarking on some co-financed research projects; European co-financing can sometimes double or triple a research budget.
Discussion on the affordability of the university often focuses on stipends, a red herring. The major issue is the cost of tuition. The current dispensation has two major rules. First, the government allocation does not take into account the precise number of students enrolled. Second, other EU students may attend the university for free (as they must be treated the same as Maltese students).
This situation leads to a two-pronged perverse result. It is sometimes against the university’s financial interest to promote its programmes within the EU, even though it is in its academic interest to do so. Meanwhile, by being precluded from significantly increasing its independence from State funding, its already considerable budget requires an additional annual injection of some five million euros just to keep the university running on the spot.
How long can this strain last? You can quibble about the five years. But are you willing to wager it can last until today’s 10-year-olds are ready to go to university?
If nothing is done to address the current fundamental equation, the result will be more drastically inequitable than some of the possible solutions. Quality education at the university will deteriorate; the aspiring middle classes will need to budget paying for quality undergraduate education for their children; in a world of certificate-inflation the rest will have a degree that is worth less than it used to.
Next, there is healthcare. On current trends, by 2020 healthcare will be, in practice, partially privatised. It won’t be official. But as the health service deteriorates, because of under-funding, more of us will resort to the private sector when we can, just as most of us gave up on drinking tap water at some point and turned to bottled water instead.
It’s already happening with some services, like breast screening, where the private sector offers faster diagnosis for a price carefully pegged to make clients feel it’s worth paying for peace of mind.
At this stage, we can perhaps still praise the magic of the market. But, on present trends, there will come a point where the politicians’ reluctance either to raise taxes or to impose some health charges will lead to the opposite of what they wish for: a shabby health service, avoided by those who can afford it and badly serving those who have to use it. The financial and social costs of that development will affect everyone badly.
On transport, much has been repeated except, perhaps, the essential truth: there is no magic bullet that will leave private car-users unscathed. Experts say underground systems are not economically viable. If new roads add up to three times the length of Malta, they will instantly be filled up by the net number of new vehicles on the road (if you factor in the space needed between cars at cruising speed).
It’s all well and good to incentivise people to own smaller, cleaner vehicles but the policy is evidently schizophrenic. Incentives to import older, bigger second-hand vehicles have also increased.
The only thing that will clear up traffic will be having public transport that can move swiftly. And it can’t move swiftly if private cars are not kept out of its way. Bus lanes, more space designated for pedestrians and bicycle users, and fuming private car users are the inevitable first steps in transport reform.
The reform will take years. So if we don’t start biting the bullet now – beginning with a realistic conversation – we will spend 2020 with even larger chunks of our lives in gridlock rather than at the office, at the gym or with our families.
Higher education, health and transport are not the only areas that we should submit to scrutiny from a 2020 perspective. But they are a start, not least because they are fundamental to the resilience of our economy to external cyclical shocks, which will surely come.
At the moment, however, there is a political taboo on addressing the fundamentals of each area.
For university tuition, it is the accounting system which currently states that tuition must be free (instead of exploring how scholarships on a mass scale can be awarded to a tuition-charging university).
For healthcare, it is the principle of universal coverage in an ageing society, where a quarter of the population will soon be of pensionable age. For transport, it’s the idea that you can have painless reform.
The irony is that, by not doing anything soon enough, the hurt will end up being greater in all three areas. There will be deterioration to the point where the only viable solutions will involve drastic institutional sell-offs and amputation of services.
Before you say it’s unthinkable, think Enemalta. Or Air Malta.
ranierfsadni@europe.com