Around November 2011 (you may consider that as far, or as close, as you wish) I had been sent a set of questions from a journalist in Union Print asking for my views on the country’s Budget for the then coming 2012. I have revisited my replies, and have reminisced about how big are the differences in the scenario between then and now.

My first reaction had been not only in the context of the human trait of always having high expectancies, but also of the undeniable (even up to now) fact of our own economic decision-making powers being increasingly circumscribed as a result of our EU membership.

The power of Brussels on our national budgetary manoeuvrability must never be underestimated.  It is there (ask the Italians!) even if some (probably the Eurodrugged) would say that we should not exaggerate it.

That 2012 Budget had been formulated in a total “hold the reins tight and steady” prevailing approach. What was then probably the country’s major problem, i.e. the ever-growing national debt, was more than an indication that ours, in a context of say the previous two decades, was not an economy that historically had grown at levels, or rates, comparable to those of other countries during the same period.

And all along – even as individuals with decision-making power in the land continued to act as if it was not there – national growth was factually hampered by that grave problem of national indebtedness.

Along with other pundits I was then already arguing the need for new and special formats of taxation. A tax on long vacant and unused property would have certainly had the effect of moving the property market in a direction that the government badly needed, at least in terms of both badly needed income and making certain properties available for the lower strata of our society. But political interests felt otherwise.

We were then at a time when, misguidedly, we were pushing ourselves into the trap, or the error, of being satisfied that our national debt, as compared to that of other EU states, was “only” at some 70 per cent of the GDP. Few seemed to accept that for a small country like ours even that was a level which, within a context of our national resources, was too high for us then, and for our future generations.

During the same week that the 2012 Budget had been announced a public offer of even more Malta Government Stocks had been announced. (Has anyone noticed how the rate of such issues has slowed down?).

In a certain sense that had been symptomatic of the fact that, until such time as when a positive (a reversal in then’s context) economic wheel would start turning in the then permanent and continuous pattern of annual budget deficits, the government would have to continue borrowing.

A tax on long vacant and unused property would have certainly had the effect of moving the property market in a direction that the government badly needed

That then was not a following of any policy of aggressively fighting to reverse the public debt. Aggressiveness on its own indeed would not have done much unless it would have been an underpinning of many micro decisions focused on having an impact on first the national deficit and then the national debt.

My stance then had been that the government could not perennially persist with embarking on capital projects – even with long-term potential – at the same then rate, and non-selectivity pattern, then being pursued. (I had given as one such example the new Parliament building!).

I made it clear that I was not against all capital spending, but certainly that the whole pattern of reasoning about it was then totally wrong.

Greece, Spain, Portugal, and Italy were going through a bad time then. The belief was that when things would improve, there would thenfollow the singing by many about “the new opportunities”.

Yes, Malta is a small country, and even from small changes in such countries we often quickly benefit. But what – this was yet another question then being asked – was being done for Malta’s exporting industry (perhaps the main component of the real economy) to be helped to become more aggressive in its efforts in foreign markets?

Even in economics the proof of the pudding is in the eating. Attentive observers, and economic historians, will judge the adequacy or otherwise of measures intended to enhance growth in the different contexts of short-, medium-, and long-term.

In any form of economic-historical analysis the reality then was that, on a long-term basis, Malta was not a country that was growing at any encouraging rates. When then one sought an interpretation on the short-term basis most discourse – this being Malta – would only take place within the usual contexts of the political cycle. And I remember that way then I always tried to avoid that type of discourse and remain professionally totally neutral.

Those were times when Maltese society – as distinct from the Maltese economy – was rapidly accumulating the connotations of that famous TV series Upstairs and Downstairs. The rate at which differences between potenti ed abbienti (the “haves”) and those down in the cellars were then growing was terrifying.

And the government was in big need of resources for helping ever wider and lower strata of the population. My view then was that this would not be possible unless fiscal policy would become innovative and aggressively aggressive: higher rates on high net worth individuals, bigger taxes on boats and luxury cars, property taxes in some form or other, windfall taxes on the profits of certain institutions.

These, in the circumstances then ruling in the economic life of Malta, were absolute necessities, and every politician could then sing till the crows come home about unwillingness to introduce them, but reality often has its own way of catching up with us.

That historic reality, post-2012, did not effectively follow all these then perceived elements is attributable to only one simple reality… and I am not in politics.  But the old Renzo Arbore adage of “meditate gente meditate” still applies whatever. Economic history does indeed teach us all a lot of lessons.

John Consiglio teaches in the Faculty of Economics, Management and Accountancy at the University of Malta.

This is a Times of Malta print opinion piece