Issue link: https://maltatoday.uberflip.com/i/1302895
15 maltatoday | SUNDAY • 25 OCTOBER 2020 NEWS ability to distribute wealth to the have-nots and protecting jobs as "leftist". The contrast with the Gonzi administration's response to the financial crisis is pertinent, with the only deliverable being a delayed pre-electoral tax cut for the upper-middle class, which was retained by Labour in its first three budgets. But in his assessment Fearne ignores the other side of the equation: wealth creation. By demonising taxation as an instrument of wealth redistribution, Labour's spend- ing programme is mostly dependent on in- creased tax revenue from economic growth and on programmes like the sale of citizen- ship. In this way, no windfall in tax revenue was generated from the super-profits made by the tourism sector (amongst other indus- tries) during the times of plenty. Instead during COVID-19 the Labour gov- ernment itself had to intervene to pump money to ensure that jobs are not shed in sectors like tourism itself. Indeed, the entire COVID-19 strategy was derailed by premature demands by some business leaders to open up. What happens now that the long-term sustainability of key revenue generators like the IIP, has been placed in doubt as the European Commis- sion initiates an infringement procedure? While Malta may buy time in resisting harmonisation on both citizenship and tax matters, the writing is on the wall. When COVID-19 will eventually recede, other risks like climate disasters loom in the horizon. If anything, COVID-19 has shown how exposed Malta's economic model is to the vagaries of the global market. In the end, when the money runs out or our debt becomes once again unsustainable, govern- ments will have to rediscover how to admin- ister fiscal medicine in difficult times, not just to finance the benefits to which we have grown used to in the times of plenty, or to improve public services; but also to encour- age a change in behaviour which is vital to implement the vision of making Malta car- bon-neutral by 2050. The risk is that the electorate may have be- come allergic to new taxes in a way which erodes a social pact based on progressive taxation, built and consolidated by a social- ist Labour party in the 1970s. Robert Abela has managed to present a relatively generous budget which increases pensions and social benefits, and stimulates consumption during the COVID-19 pandemic through vouchers and tax refunds MATTHEW VELLA LABOUR MEP Alfred Sant has voted against the EU Common Agricultural Policy Strategic Plan, saying it was not adapted to Mal- ta's particular agricultural land- scape. MEPs on Friday adopted their position on the post-2022 EU farm policy reform to start negotiating with EU ministers. They endorsed a policy shift that will see the Eu- ropean Commission endorsing na- tional plans on how to implement EU objectives on the ground. The Commission would be checking their performance, not only their compliance with EU rules. But in an explanation of his vote to the European Parliament plena- ry session, Sant said that a deroga- tion allowing the allocation of up to €3 million per year of voluntary coupled support to Maltese farm- ers, remains missing from the stra- tegic plan. "Without this derogation, Mal- tese farmers would face massive drops of essential support that could mean the definite collapse of the sector," Sant said, voting against both the Commission Pro- posal as well as the final EP Plenary Report on the CAP Strategic Plan. Sant had attempted to include the derogation through an amendment in the Budget Opinion, and by rep- resentations with European Parlia- ment negotiators but the proposal was not taken on board. The CAP remains today a very relevant and much needed tool for European farmers but since 2003, a third of EU farms closed down. "It is essential that the CAP is adapted to the current socio-eco- nomic conditions of all member states and such adaptation has to include the needs of the different landscapes within the EU," Sant said. "Unfortunately, both the original Commission Proposal on the CAP Strategic Plans, as well as the EP text amending it, fail to do so... it can no longer be denied that over the long-term, EU membership has resulted in a steady erosion of the Maltese agricultural sector. "CAP interventions in Malta should be designed in such a way as to rectify the damage. There is no other way by which they would make sense." Under the policy shift approved by MEPs, mandatory climate and environmentally-friendly practices will be required for farmers to get direct support. But MEPs voted to progressive- ly reduce annual direct payments to farmers above €60,000 and cap them at €100,000. Farmers could be allowed to deduct 50% of agri- culture-related salaries from the total amount before reduction. EU states could use at least 4% of their direct payments budgets to sup- port young farmers. The strategic plans regulation was approved by 425 votes in favour to 212 against, with 51 abstentions. The CAP accounts for 34.5% of the 2020 EU budget (€58.12 billion). Around 70% of the CAP budget supports the income of six to seven million EU farms. The PN candidate for Europe, Peter Agius, blamed government for failing to coordinate a national effort inside the Council of Minis- ters. "Malta supported the CAP reform package in July and again in Octo- ber, and the work of the Maltese MEPs in the European Parliament Committees and Plenary where our representatives end up voting along different lines on matters which are after all, of common na- tional interest," Agius said. Agius said farmers and food pro- ducers were puzzled on how they should reconcile self-congratula- tory statements on CAP reform negotiations by government min- isters, and Sant's statement. "Gov- ernment should come clean, cut through the complexity and coor- dinate its work better in Brussels for the sake of an industry that is begging for serious political rep- resentation for the sake of fresh and healthy food for all our fami- lies." Like Sant, he warned that farm- ers are on the brink of bankruptcy. "Our families and our food secu- rity will suffer if they close shop. We need to bolster consumption of local produce and ensure the ef- fective deployment of EU aid and EU permitted state aid such as the voluntary coupled support system which sustains hundreds of tomato and dairy farmers through agree- ments with local manufacturers." Agius said national coordination on on agriculture was all the more important without any Maltese MEP on the AGRI committee. "It requires a strong collective and national effort which at present seems to be conspicious by its ab- sence." CAP vote in Brussels is farmers' blight – Sant