Issue link: https://maltatoday.uberflip.com/i/1467182
6 maltatoday | SUNDAY • 8 MAY 2022 OPINION Political parties which cannot live within their means Josanne Cassar AN article I read on an online news portal called The Nation- al, gave a simple explanation of how to budget one's income on the 50-30-20 principle, starting with what it describes as 'must- haves'. "Must-have costs include housing, utilities, food, trans- portation, insurance, mini- mum debt payments and child care that allows you to work. Using the 50/30/20 budget, these costs ideally would con- sume no more than 50 per cent of your income. That leaves 30 per cent for wants (entertain- ment, clothes, vacations, eating out and so on) and 20 per cent for savings and extra debt pay- ments." While it was referring to households, it was interesting to read this in the same week that we heard how both the La- bour Party and the Nationalist Party are up to their eyeballs in debt, especially when it comes to their media outlets. ONE Productions owes €1.25 million for utilities while Me- diaLink has debts of up to €3.5 million. Between them they owe around €20 million in un- paid VAT, tax and social secu- rity contributions. PN Leader Bernard Grech recently admit- ted that the party's total debt runs to €35 million while La- bour is said to owe €10 million. Now that your eyes have stopped bulging at these fig- ures, let me ask you some ob- vious questions to which there are some very equally obvious answers. What would happen if you did not pay your ARMs bill? Your water & electricity would be cut off. What would happen if you did not pay your VAT? You could face jail as has happened to or- dinary people in previous years. How about if you did not pay your tax? You would incur a hefty penalty, be charged inter- est and they will keep hounding you until you pay up. And if you fail to pay your employees' social security con- tributions? You can face judi- cial action as well as hefty pen- alties. Of course, all of the above do not seem to apply if you are a powerful construction mag- nate (who can sail through life without abiding to any rules or regulations since he has the right connections) or, as in this case, a political party. Both the PL and the PN have clearly demonstrated that they are unable to manage their finances because they have not budgeted for their 'must- haves'. This financial mismanage- ment, coming from a party in Government and a party which is supposedly a Gov- ernment-in-waiting, does not exactly inspire any confidence in the ordinary taxpayer. Most of you reading this are proba- bly wondering why your hard- earned income is guzzled up so quickly by taxes, N.I., VAT and those pesky ARMS bills, while the 'untouchables' keep getting away with not paying for years. I mean, can you imagine how much more disposable income we would all have if we sim- ply acted as cool and casual as Labour and the PN about pay- ing our 'must haves', and just decided to squander it on our 'wants' instead? But very few of us have that luxury. Leaving aside those who have turned tax evasion into a fine art form (paradoxi- cally, they always tend to be the most wealthy), the average per- son in this country coughs up the money right on cue when the bills, income tax and VAT returns arrive. They do this by slogging away at their jobs and in many cas- es relying on a two-income household not through choice, but through economic necessi- ty. They juggle to pay for their must-haves and their wants and perhaps, just maybe, they put a bit of money aside in their savings, although the latter is becoming less of a possibility these days. They struggle to pay off their credit card debts and bank loans, but pay them off they must, because no benevolent fairy godmother is going to wave her magic wand and make them disappear. And yet, here are Malta's two major political parties, the heavyweights, the recipients of so many back door donations by those who wield the real money and the real power in the country - and both of them are on the verge of bankrupt- cy. Where did all the money go? More pertinently, when it comes specifically to their me- dia houses, one must ask, what other business could survive like this for years without fold- ing? Although they may seem like essential tools for propaganda purposes, in the larger scheme of things, the politically owned media houses would fall under the umbrella of 'wants'. It's like wanting to buy a BMW when all you can afford is a Toyo- ta Vitz. Although the PN is in more dire straits, both parties have to bite the bullet on this one. After all, pre-One and Net TV, they still managed to get their respective message across via their radio stations. Hiving off their respective TV stations, which are more expensive to run, would go a long way to- wards stemming the flow of cash which is being haemor- rhaged. It's not just the political par- ties which are in the red. While the debts keep piling up, the Labour Government in par- ticular behaves in a way which epitomises the phrase made fa- mous by the Nationalist Prime Minister Eddie Fenech Ad- ami… 'money, no problem'. It is an interesting twist, loaded with irony, that it was Labour which used to regularly accuse Nationalist Governments of squandering all the money in the state coffers. These days, the big spenders are those who once claimed to be socialists (a trend which one can clearly see being mimicked by much of the general population). But, ultimately, like any household that has been living beyond its means, and which has been spending money it does not actually have, there comes a point where some- thing's got to give. After an election campaign which stopped short of promis- ing to pay us to stay home and watch Netflix, Finance Min- ister Clyde Caruana has given the first indications that he is going to slam on the spending brakes. Eurostat figures published re- cently show that Malta's defi- cit stood at 8% last year, the highest in the EU. In response to this the Minister announced that, "I have started an exercise by which I am looking more deeply into government ex- penditure to see where we can be more judicious so that un- necessary expenses are cut." He pointed out that, apart from cutting down the deficit, this was also essential in order to absorb any increase in fuel prices, which he is determined will not be passed on to the consumer. This is a commendable de- cision, especially when plac- es such as the UK have seen shocking increases, sometimes even three times as much, forc- ing people to choose between heating and buying food. There are plenty of areas where the Government could curb its spending: from the number of expensive consult- ants on its payroll to the lavish, completely unnecessary open- ing ceremonies every time a project is completed (although ever since the PR-obsessed Ian Borg was kicked upstairs to the Foreign Affairs Ministry per- haps we will be spared more televised ribbon cutting). And let's not forget all the people who have been hand- ed jobs with the public sector over the last few years, bloating the civil service so much they are probably all bumping in- to each other in the corridors. Meanwhile, the private sector keeps searching frantically for Maltese-speaking job seekers, but it is all in vain, and they are nowhere to be found, because they are all working with some government department or en- tity now. Minister Caruana strikes me as a sensible man so it should not be too hard for him to find the areas where he needs to trim the fat. It won't go down well because no one en- joys hearing that the party is over, but it is clear Malta can no longer keep spending on frivolous things like there's no tomorrow, because tomorrow will eventually come. In fact, it's probably here. Since banks have cut down on their staff and imposed more and more restrictions on what can be done at an actual bank, the ones left behind are the ones who need one-to-one personal banking the most