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11 In his closing speech at the Labour Party conference, Prime Minister Joseph Muscat laid down his vi- sion for a "Maltese, European and global" Malta. At moments he seemed exces- sively keen to dispel a widespread perception of his party as gener- ally 'anti-business'. Noting that the Labour movement was not 'envious of wealth' but inherently 'pro-business', Muscat reiter- ated his commitment to reducing bureaucracy and make Malta an "automatic" option for foreign investors. Elsewhere he adopted a decid- edly entrepreneurial tone: arguing that Malta must "become the land of innovation which encourages creativity, enterprise and determi- nation". This, he added, would necessi- tate being "courageous". One is naturally free to agree or disagree with the ideology underpinning most of Muscat's rhetoric last Sunday. Old Labour stalwarts might be understand- ably confused by such an overtly right-wing approach to economic matters, which appears to jar with the protectionist policies of former Labour Prime Minister Dom Mintoff. To add to the confusion, Muscat frequently cites Mintoff as his own role model, while simultane- ously striking out in the opposite direction of his fiery predecessor. But this in turn only illustrates the ongoing identity upheavals in a party which has had to reinvent itself after more than two decades in Opposition. Much the same ap- plies also to the Nationalist Party, which is undergoing a process of statutory reform following its defeat last March. As a result of such constant reinventions, the Maltese political landscape has become character- ised by myriad ideological contra- dictions: in this case, a socialist government adopting undisguis- edly neo-liberal economic policies that one would normally associate with the political right. But while this inconsistency need not surprise us anymore – Labour movements have under- gone similar transitions all over Europe, in step with the changing global economy – one may have serious reservations regarding apparent inconsistencies in the implementation of such policies. And it would appear that Joseph Muscat is intent on cherry-picking which aspects of the neo-liberal agenda he would like to implement in Malta, and which aspects he hopes to ignore indefinitely. Throughout his pitch last Sun- day, Muscat consistently referred to foreign investment as the key to financing his grand schemes for the country. The controversial Individual Investor Programme – and the billion euros it purports to obtain in investment – was cited as a major plank in his entire economic vision. But Muscat should know that cash injections, on their own, are not enough to sustain a healthy neo-liberal market. If the Prime Minister were to present a coherent and consistent economic vision, he would have to also address the most conspicuous elephant in the room: wide- spread tax evasion, which – if left unchecked – could neutralise the benefits of even the most gener- ous one-time foreign investment package. Yet for political reasons this thorny problem has consist- ently been sidelined by succes- sive administrations. Ask anyone involved in business in Malta, and most would complain that existing tax compliance mechanisms come down very heavily on specific sec- tors, but often let entire segments off the hook altogether. Indeed the country has become almost inured to a culture of avoiding fiscal re- ceipts, resulting in a black hole in the economy costing the govern- ment millions of euros each year. Perhaps the most iconic example of this phenomenon was former finance minister Tonio Fenech's candid admission that his own family housekeeper never issued VAT receipts, did not declare her income and never paid National Insurance. But while the issue of housekeepers evading tax may be among the most widespread examples, the amounts in uncol- lected revenue simply pale into insignificance when one considers similar abuse by many sectors of the professional class – where the amount of money changing hands may be considerable, as is the tax revenue owed to government but never paid. For all his liberal and neo-liberal posturing last Sunday, the prime minister seems to be making the same mistake as virtually all his predecessors. Rather than taking a truly courageous (and elector- ally dangerous) decision to clamp down on such abuse across the board, Muscat seems to think he can offset the revenue lost through tax evasion by simply increasing revenue from other areas. And as a result of his ap- parent determination not to take any unpopular decisions at all, he seems willing to gamble with Malta's international reputation in a desperate bid to secure the necessary funds. The IIP programme he him- self cites is a good example. In its haste to attract the largest investment possible at the lowest cost, the Labour government not only incurred the wrath of the European Parliament and an un- precedented amount of bad press; but also succeeded in projecting the image of a country desperate for cash. Judging by Muscat's own politi- cal programme, this impression does not seem far off the mark. If one is to finance an ambitious and generous programme, while studiously ignoring calls (among others by the Confederation of Trade Unions) to pursue millions of revenues owed to government in unpaid taxes, one will sooner or later find oneself accepting any form of cash injection, regardless of other concerns. On one thing, however, Muscat is right. The time has indeed come to be 'courageous'; and a nation- wide clampdown on tax evasion must surely be the most coura- geous decision of all. Editorial maltatoday, WEDNESDAY, 12 FEBRUARY 2014 Time for truly courageous decisions MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING DIRECTOR: ROGER DE GIORGIO MANAGING EDITOR: SAVIOUR BALZAN Tel: (356) 21 382741-3, 21 382745-6 • Fax: (356) 21 385075 Website: www.maltatoday.com.mt E-mail: newsroom@mediatoday.com.mt