Issue link: https://maltatoday.uberflip.com/i/421389
12 THIS year the extraordinary shoot- out involving one of the home affairs minister's chauffeurs has overshad- owed the customary budget discus- sions. Naturally, the unwarranted inci- dent is the talk of the town and in his attempt to downplay the inci- dent, Prime Minister Joseph Muscat dragged former finance minister To- nio Fenech – who for six years was the face of the PN government budg- ets – into the controversy. In his attempt to downplay calls for Mallia's head, Muscat compared the case to that involving Noel Borg Hedley, formerly Fenech's private secretary, who was found guilty in court of having solicited bribes from construction firm JPM Bros. "In the past, government would say that [Borg Hedley] was acting on his own initiative. I won't do the same thing: in this case, the driver was acting on his own and the minister was not informed and did not give him any instructions. If the inquiry shows that the minister gave instruc- tions, then political responsibility will have to be carried," Muscat said on Friday. A few hours later I'm sitting in Fenech's office in Attard and upon asking him for his reaction, a per- plexed Fenech says "Firstly, he [Mus- cat] had expected me to shoulder po- litical responsibility back then. So he cannot now say that because Tonio Fenech did not shoulder responsibil- ity, neither should Manuel Mallia. "Mallia must now live by Muscat's creed. Moreover, the Prime Minister cannot change tack because before the 2013 election he promised full accountability. Muscat's argument does not stand because we now ex- pect him to stand by his promises." Explaining that he never instruct- ed Borg Hedley to take any money, Fenech said that the chauffeur in- volved in the shootout carried a weapon with Mallia's consent. "Mallia is also lying on the fact that all home affairs ministers are protect- ed by armed guards. I never lied and I can never be compared to Mallia because the minister also lied about the shots being fired into the air," he says, adding that Borg Hedley had been removed as private secretary before the bribery case happened. Following the brief diversion, we go back to Fenech's home turf and I ask him why the opposition has de- scribed the 2015 Budget as socially unjust. "The Government talks very nicely but when you look at the figures it's not doing much to implement its pre-electoral promises." Although in his career Fenech was chastised by Labour and some quar- ters of the media over a number of blunders, such as his infamous trip to London on the private jet of a local businessman to watch his favourite football team, his grasp of financial and economic matters is undeniable. He eloquently explains that while the high income earners will enjoy a 4% tax cut and lower income earners will benefit from an in-work bonus and other welcome measures, the people in between are worse off fol- lowing the budget. "Before taking office, this govern- ment promised a fair distribution of wealth, without the exclusion of any- one. But this budget has discarded a lot of people, including vulnerable people such as pensioners," he says. He argues that although Labour had promised that pensions would reach 60% of the average national income, pensions are well short of that. "The 58c COLA increase coupled with the one-off €35 bonus is not enough for pensioners," he says, adding that pensioners are worse off under Labour. Fenech adds that Muscat's darling middle class did not benefit from the 2015 Budget. "When still in opposition, Muscat argued that the middle class was be- ing squeezed. But what has the mid- dle class earned in this budget? All they got is the 58c increase and €35 bonus and only the upper middle class enjoyed the income tax cut." He explains that the 4% income tax cut – a measure announced by the previous PN government and implemented by the current admin- istration – only affected the upper middle class which earns more than €28,701. "The real middle class did not get anything apart from the €10 to €15 increase in the cost of car licences and the 1% increase in all insurance policies. A normal middle class fam- ily of four with two cars and a home insurance policy have to fork out between €60 and €80 a year in ad- ditional expenses, but all they got is €35." He continues that ironically a number of families would have en- joyed a bigger weekly increase had the energy tariff reduction been ex- cluded from the COLA mechanism. "If the government wanted to be socially just it would have worked out the COLA increase by exclud- ing the impact of energy bill reduc- tions and take into account the im- pact these had on inflation and give a permanent increase through a tax reduction or increase in pensions." But wouldn't an income tax reduc- tion also be unjust since those who do not need it would have also en- joyed it? "We proposed a €170 income tax reduction for those who did not en- joy a tax cut and an increase in pen- sions, edging pensioners closer to 60% of average national income," he says. He adds that the government in- creased its expenditure by €100 mil- lion, of which up to €50 million will be going in wages. "Instead of increasing 2,400 jobs in the public sector the government could have used the money to fund the measures we proposed. The choices this government is taking are simply wrong." Fenech stresses that this govern- ment is hell-bent on spending money on PR exercises and events "to alien- ate people while claiming that there are no funds for more important things." Shedding doubt on the govern- ment's energy plans, Fenech says that since the €320 million deal with Shanghai Electric Power is yet to be signed, the government allocated more funds to Enemalta to cover re- ductions in energy bills. "Although they promised that en- ergy tariff reductions will not be paid for by the taxpayer this budget increased Enemalta subsidies by €14 million, concealed as a vote to create an electric energy reserve. If these €14 million had been distributed to the people it would have been more socially just." I take him back to the opposition's claims that the public sector has been inflated by over 4,000 jobs. According to government claims in October 2013, the public sector sees some 1,500 employees retiring each year and that the government planned to replace only 1,000, save for jobs in health and education. Statistics show that over 2,000 new public sector jobs were registered over the past 12 months with over 800 jobs created in health and educa- tion and over 900 who in January will be absorbed by the Spanish company which will operate the public trans- port services. So is the opposition inflating the numbers to score political points? Fenech explains that in 18 months, around 2,000 public servants retired and understandably some of them especially in education and health need to be replaced, hence the gov- ernment's commitment to replace two-thirds of them. But Fenech says that the govern- ment has its priorities wrong and points out that the number of em- ployees in the public transport serv- ice have increased by 300 since the government nationalised the service in January while at the same time it is refusing to employ 90 health profes- sionals. "Of these 4,000 people employed by the government, around 800 are ad- ministrative positions which include cleaners, messengers and other non- professional jobs. I ask myself, did we need to employ these people? What's certain is that the finance minister should stop playing around with fig- ures and stop attacking the National Statistics Office when the numbers do not back up his claims." But are all 4,000 jobs superfluous or is it just the 600 to 700 administra- tive jobs that were unneeded? "Yes, you have the administrative jobs and the former Arriva workers, so in total you can say that around 2,000 jobs were surplus," he insists. In recent months the National Sta- tistics Office has been embroiled in political controversy and this month the opposition expressed concern at the government's decision not to re- new NSO head Michael Pace Ross's contract. Why this concern I ask. "Pace Ross is a reputable person and on his watch the NSO was never reproached for any wrongdoing at a European level, so I cannot fathom why his contract was not renewed," he says, adding that the government was probably aiming at having an of- fice which compiles statistics in the way it is told to by the current ad- ministration. "We've come to a point where we should have Edward Scicluna ap- pointed at the helm of NSO because it seems that he's the only one who has a good knowledge of statistics," Fenech says. Recalling the origins of the Greek financial calamity in the tampering of statistics, Fenech warns Scicluna to stop interfering in statistics be- cause "if Malta loses its credibility with Eurostat than we've had it and from aiming at becoming the best in Europe we'll become the worst." One of the 2015 Budget's aspects which is hard to criticise is the ben- efits for low income earners. Howev- er I ask Fenech whether short-term measures are the answer? "This government promised to eradicate poverty within its first term in power, however in his budg- et speech Scicluna said the govern- ment is aiming at eradicating pov- erty within 10 years. So unless the government is planning to extend its term by five years, it is an admission that it will not fulfil its promise by the end of the current term." Despite acknowledging the con- tinuation of a number of measures aimed at the lower income earners, he points out that the government's failure to address poverty was not being underscored by the PN but by leftist activists and academics, in- Interview By Jurgen Balzan maltatoday, SUNDAY, 23 NOVEMBER 2014 No gain for the middle SCICLUNA AND THE NSO It seems that Edward Scicluna is the only one who has a good knowledge of statistics MINISTERIAL RESPONSIBILITY Muscat had expected me to shoulder political responsibility. He cannot now say that because Tonio Fenech did not shoulder responsibility, neither should Manuel Mallia