Issue link: https://maltatoday.uberflip.com/i/1482987
14 maltatoday | SUNDAY • 30 OCTOBER 2022 BUDGET 2023 "OUR heart was, remains and will always be socialist" – so de- clared finance minister Clyde Caruana in his no-pain budget for economic stability and alle- viation of poverty. No big lurch to the left was noticeable in the budget itself – but – semantics and gestures are important in politics. And clearly, even sporting a brand new 'colonial red' budget box (paid by his own cash to take back home once he hangs up his finance shoes) and mut- tering the S-word a few times, Caruana has sent a clear mes- sage to those in the grassroots who feel unease with the par- ty's reinvention as a big-tent 'Nationalist-lite' party under Robert Abela. Re-exhuming socialism Ever since the party started toying with building social alli- ances beyond its working-class core, the party has downplayed socialism and its legacy. This started with Alfred Sant's successful bid to power in 1996 when he sensibly broadened the party's working-class ap- peal to a broader one by ap- pealing to voters as citizens, albeit retaining an antagonism towards the "baron" class of Maltese businesspeople. Under Joseph Muscat the par- ty went further in proclaiming its "pro-business" credentials and underlining the party's "progressivism" in civil lib- erties but negated any class antagonism, except when hit- ting hard at the elitism of the opposition. As for socialism, the party even stopped paying its membership in the Social- ist International, with Muscat toying with shifting his alle- giance to Emmanuel Macron's umbrella group in Europe. Even despite his kinder dis- position towards liberalism and his own flirtation with the barons once denounced by his predecessor, Muscat remained popular with his party's grass- roots: his demeanour remained that of a fiery and combative Labour leader facing the dread- ed Nationalist-aligned estab- lishment. Robert Abela on the oth- er hand, obliged to distance himself from his disgraced predecessor, cannot deny his patrician roots as a lawyer-pol- itician, making him more vul- nerable to criticism that he has forgotten his socialist roots. Now facing a zombie opposi- tion on the centre-right, the party seems more concerned with those in its ranks who do not recognise the party any- more. Roughly, they can be broken down into two distinct cate- gories: those alienated by col- lusion with big business under both Muscat and Abela, and folkish types who remain loy- al to Muscat and a socialism rooted in a classic antipathy of PN-associated elites. The answer to this is to emphasise rather than hide the party's supposedly socialist roots. Ironically despite being him- self an architect of Musca- tonomics, it is the unpreten- tious and frank demeanour of Clyde Carauna, which gives this rediscovered socialist trait a degree of authenticity. For Caruana resonates with a new generation of more educated Labour-inclined voters whose loyalty the party cannot afford to take for granted. Fair yes, socialist… not so much Did Caruana even really pres- ent a socialist budget? For sure it was a budget marked by sobriety and a de- gree of fairness. Given a choice, Caruana opted to spend more money on cushioning the vul- nerable from inflation, while postponing the tax cuts prom- ised by the party in its manifes- to. Still, one cannot but notice that while wages remained stagnant in these best of times for business, it is the govern- ment which is now shoulder- ing the burden, by introducing a separate mechanism which would see low-income earners get a direct cash injection of around €200 before Christmas. The risk is that such measures are perceived as acts of govern- ment generosity rather than a recalibration of the economic model towards greater social justice. And for all his frank- ness and meritocratic talk, Caruana did not shy away from taking credit for a controver- sial tax refund cheque just days before the last general election. Another sign of Caruana's socialist pedigree is the clamp- down on tax evasion. And in this aspect Caruana has shown that he means what he says: securing an extra €120 million in the public coffers in the past year thanks to stricter enforce- ment and increasing interest on unpaid tax. But largely absent from the budget is any hint of redis- tributive taxation, one of the hallmarks of social democracy in western Europe. Instead, La- bour is one of the few parties on the left which prides itself on not introducing any new tax. But one may ask: why in- flict pain when there is no need to do so? For in Malta is still able to square the circle – that of spending more without tax- ing more, simply by increasing the size of the economy. For this budget hinges on an increase in public debt, which remains within sustainable lim- its and less than the 60% debt to GDP ratio, which means Caruana has enough room to wiggle, unlike many of his col- leagues in Europe in countries with higher-debt ratios who have to choose between higher Since the 1990s Labour has been reluctant to f launt its socialist credentials in its bid to win over the middle-classes. So what lies behind Clyde Carauna's pride in the party's socialist roots – and does his budget tally with his rhetoric? asks James Debono Red flag, red bag Comrade Clyde rediscovers the S-word