Opinion: Debt rising, truth falling – Caruana’s misleading claims

Finance Minister Clyde Caruana has gained a reputation for his straight-talking, balanced statements and aversion to Prime Minister Robert Abela’s hostile and confrontational style.

His comments are usually factual and accurate. He set the standard when he accepted responsibility when he was found guilty of ethics breaches by the Standards Commissioner and paid out of his own pocket for the expenses incurred by the public purse.

But it seems Caruana has regressed into the misleading rhetoric employed by the rest of his Cabinet colleagues.  “Despite the pandemic and the fact that we are still the only EU country subsidising energy, debt is going down,” he boldly declared.

The National Statistics Office said on Monday that Malta’s debt has risen to €10.65 billion – a record.

“Decreasing debt year-on-year provides a buffer against future economic shocks,” Caruana said.

Malta’s debt, however, has been steadily rising.  It’s not decreasing.  In fact, it’s rising far faster than it ever has.

During Abela’s five years in power, the debt almost doubled. In 2019, Malta’s national debt reached €5.72 billion. Abela single-handedly added another €5 billion.

Last year alone, Abela, together with his Finance Minister, added a staggering €817 million to our national debt – that’s almost €16 million per week.

How does adding €817 million to the national debt in one year and a staggering €5 billion in five years amount to decreasing the national debt?

“We anticipate a continued decrease in the deficit without imposing any additional burdens or taxes on the people,” Caruana declared.  Didn’t Labour brag about a surplus?  That surplus has long disappeared.

Last year alone, the deficit was €825.3 million.  Labour spent €825 million more than it received in revenue.  Caruana is only right to say that it has decreased because in Robert Abela’s first year, the deficit reached a staggering €1.4 billion.

Malta’s national debt is of concern, especially at this moment.  The International Monetary Fund (IMF) has just warned that US President Donald Trump’s tariffs have unleashed a major shock to the world economy. The IMF was forced to cut its forecast for global growth.

Even more worrying for Malta, the IMF has warned about “sudden increases in borrowing costs and investor concerns about public debt sustainability”.

So why is Labour telling the nation that debt is “going down” when it’s skyrocketing at a rate never seen before? Because sustaining the myth of Labour’s economic competence is vital to Abela’s enduring popularity and his hold on power.

The prime minister constantly harps on how great Labour is at running the economy and castigates the PN for its “negative historical record”. Abela continually pushes the false narrative that the PN was rubbish at growing the economy while Labour created an economic miracle. That’s total fiction.

Abela bragged that, since 2013, Labour doubled Malta’s GDP, “unlike previous PN administrations”.  He’s right.  Under a PN administration, the Maltese economy didn’t just double.  It grew by 7.5 times.

When the PN came to power in 1987, Malta’s GDP stood at US$1.44 billion.  By 2013, when Labour took over, it had grown to US$10.8 billion.  Labour’s doubling of Malta’s economy pales into insignificance compared to the PN’s.

Abela bragged that “under this government, educators’ salaries are double what they were under the PN”.  The truth is that between 2013 and 2024 (Labour’s term), the average salary increased from €16,022 to just €22,044.  That’s a mere 1.37 fold increase.

Under the PN, the average salary increased from €3,940 to €16,022 per annum. That’s a fourfold increase in salaries. Nobody can dispute those figures. Salaries under a PN administration grew far more, and far quicker than under Labour.

What’s even worse is that the average salary hides the reality of the widening income inequality between the rich and the poor that Labour has produced.

Under Labour’s supposedly socialist government, the GINI coefficient, a measure of the disparity in income distribution, has increased significantly from 27.1 in 2012, the last year of a PN administration, to 31.2 in 2021 after almost a decade under Labour.

That means that the income of the richest is rising far more rapidly than that of the poorest.  The gap between rich and poor is widening.

More worrying for the public, wages rose by a mere 26% since 2016, but actually they only grew by 6% in real terms when adjusted for inflation. For the poorer in our society, salaries have barely budged in the last five years, since Robert Abela took office.

Abela bragged that “the government’s success is down to its ability to grow the economy at the fastest rate in the EU”.  He may be right, but in that case, PN administrations had far greater success, and Abela’s claims to the contrary are not only misleading but utterly deceitful.

As Hitler’s propaganda minister, Joseph Goebbels, pointed out, “Repeat a lie often enough and it becomes the truth”.  That’s what’s happened with Abela’s lies.  He’s repeated them so often that nobody seems to challenge him, not even the PN itself.

The Finance Minister’s manifestly false claim that “debt is going down” wasn’t even fact-checked.  It was reported as gospel truth. He was presenting the statistics issued by the NSO, which clearly demonstrated a whopping average increase in debt of €1 billion per year over the last five years. That’s Abela’s real record.