The anniversary of Robert Abela’s two years in office has seen billboards sprout up to celebrate it. Centred in large fonts, against a simple background of muted colour, one reads “Unity” (għaqda); another, “Decisions” (deċiżjonijiet).
It’s left up to our imaginations to sort out what kind of unifying, decisive leader he’s been. It’s not even clear whether the billboards are boasting of his leadership of government or Labour. Maybe that, too, is up to us.
As prime minister, he has boasted that, say what you like about the decisions he’s taken, he hasn’t been afraid to take them. If that’s all there was to decisions — taking them, irrespective of what they are — then no decision would be difficult. You could just roll the dice.
Besides, which decisions has he taken, as prime minister, that did not take short term advantage over long term gain? Deciding on massive amounts of Covid-related financial aid, and on business-restricting, health-related measures will have been genuinely stressful. But there were models to follow all around Europe.
Following these models, Abela’s government got a lot right. But if Abela was seriously concerned about the rising national debt as a result of pandemic-related aid, he hasn’t shown it. He has continued to green-light other massive expenditures that the National Audit Office has flagged as maladministration at best.
The massive budget miscalculations mean that the government overspent by over a billion euros last year. It will need to borrow over another billion for this year. And that’s based on the conservative budgetary estimates that, so far, have underestimated the problem.
The debt isn’t just due to Covid-related expenditure. Our decisive prime minister has almost doubled the money given to Steward Health Care, which took over the deal covering the corrupt hospital giveaway. It appears that no negotiations are taking place with Steward, despite Abela’s early insistence that Steward would have to abide by its contract to the letter.
What decisions has Abela taken with respect to the Electrogas contract? It’s been called out as mired in “significant corruption” by the US government. It’s been linked to above-market prices for us. But Abela has only broached the idea of using EU funds for the profit of the Electrogas consortium. If that happens, the deal will have been effectively laundered in public.
Abela boasts of the lowest-ever levels of unemployment, not least in Gozo. If all you need to do to solve unemployment is simply to get government and its entities to hire people — even if they’re surplus to requirements, even if it damages the private sector — then anyone can do it.
It was the employment policy of the government led by Karmenu Mifsud Bonnici (1984-87), which notoriously employed 8,000 people on the eve of a general election. KMB’s government held that it was better for the State to employ people than to have them unemployed. We know how that ended.
Usually, low unemployment numbers and high rates of economic growth are reliable signals of good economic management. That assumes the decision-makers aren’t being recklessly short term, however.
Abela’s predecessor, Joseph Muscat, accelerated economic growth by disabling the brakes — all checks and balances of good governance. It may have looked like great management at the time. Effectively, however, Muscat was borrowing heavily from the collective futures of the financial services industry, the gaming industry, energy prices, medical costs and our quality of life.
Muscat borrowed so heavily that his successor no longer can. Abela has acknowledged that there must be a different approach to the environment. He has had to pay Muscat’s bills — not least in seeing Malta greylisted and the uncertain future of gaming and financial services.
So Abela has turned to the classic kind of heavy borrowing: money. As forecasts go haywire, government is issuing stocks for more than one year.
Economic growth would improve the tax take. With its de facto employment policy, however, Abela’s government has taken on more overheads than it previously had. Its tax take needs to be higher just to keep up, let alone to reduce the ballooning debt.
The government knows this. It is warning everyone that all taxes due will be collected, as they should. But if businesses find they suddenly need to pay their dues, they will feel the pinch; it will affect economic growth. And if the new tax chief confirms the worst suspicions — that he is a Party man more than a public servant — then investment will be hit.
We can only hope that none of this comes to pass. A country is a community of destiny and Malta’s economic future is tied to Abela’s political decisions.
So far, however, he’s taken major decisions where economic utility, political rationality and individual rights and freedoms were judged almost uniquely through a Party filter. He’s everyone’s prime minister but has behaved as though he considers his community of destiny to be Labour.