The PL's ventriloquist's doll in white

Disneyland economics

Last November I did what I thought was a rather routine exercise. Trawling through what the Labour leader had recommended between 2008 - 2010, I costed each measure. 

The Partit Laburista went ballistic. They refused to come on the programme and then showed up at the last minute so that no PN representative would be present, they hauled me in front of the Broadcasting Authority, organised an edition of the Joe Grima show at the same time on the same topic, and accused me of an assortment of heinous crimes. 

The ultimate in absurdity was when Kurt Farrugia, the PL's Director of Communications, showed up at the studio minutes before I went on air with a brown package under his arm. It was a video which he asked to air. Without me seeing it first. Yeah, right.

Well here is the video Farrugia wanted me to air, click here: PL's costing of Joseph Muscat's measures.

I will respond to it by sticking to the facts:

Reducing Income Tax

Did Joseph Muscat want Lawrence Gonzi to keep his promise to reduce income tax by 35% as Europe was going pear-shaped in the middle of the financial crisis? Yes. This is what the Labour leader had said: “Kull sena li tgħaddi u ma jżommx kelmtu, il-Prim Mi­nistru qed jieħu lill-familji u jixxotta mill-ekonomija €47 miljun li kien wiegħed li se jħallilhom. Joseph Muscat qal li b’dan il-Baġit, sal-aħħar tal-2011, Lawrence Gonzi se jkun ħa lill-familji €141 miljun (140 ghad-dritt).” (Orizzont, 26/10/10)

Reducing VAT from 18 to 17%

The ventriloquist's doll in the video says that it is not true that Joseph Muscat made such a promise. This is what Joseph Muscat said on his own website: “Titnaqqas il-VAT ta’ 18 fil-mija issa li l-Unjoni Ewropea tatna dan ic-cans” (25 October, 2009). To ram the point home he said it again in a PL press release: “...ghall-kuntrarju ta' pajjizna, gvernijiet ohra bhall-Gvern Laburista Ingliz, bl-iskop li jaghti aktar flus fil-bwiet tan-nies, ddecieda li jnaqqas ir-rata tal-VAT.  Joseph Muscat ikkritika lil Lawrence Gonzi ghaliex mhux qed isegwi l-passi li qed jiehdu pajjizi ohra ...” (23/11/ 2008).

Reducing VAT on restaurant bills

This one is hilarious. If the government had reduced VAT on restaurant bills, the estimated loss of revenue would have been - and let me say this slowly, maybe this time they get it - €23 million a year. So that amount, or one very close to it, would have to be reduced from government revenue every year. Get it now?  Unless of course, Joseph Muscat was proposing that it is reduced for a year and then increased the following one. If so, the PL would have invented a new theory - yoyo economics, the shortest route to a basket case economy.

Not increasing VAT on hotel bills

From yoyo we move to voodoo economics. The PL's ventriloquist's doll in white says that government could have kept VAT on hotel bills at the same level and still magically found €6 million (the actual cost of the measure) in the national kitty the next morning. Honestly, I do not know how serious men and serious economists like Edward Scicluna and Louis Grech can associate themselves with this crap.

No MEPA tariff increases

Now it is time for the ventriloquist in white to take out her pink Hello Kitty Kalkulator. MEPA tariffs were increased by €5 million. But, in addition, because of the reform, government estimated that it would collect €2 million less. So what does the Hello Kitty Kalkulator say when you enter 5 + 2? 7? Good girl.

Water and Electricity Rates

And finally we get to the financial whopper: the €170 million water and electricity rate increase. On this one, Joseph Muscat made two wildly divergent commitments. The first one is that government should have subsidised the full amount, a total of €170 million. He repeated this promise not once but twice: 

1. “Il-Partit Laburista bl-iktar mod ċar ma jaqbilx ma’ dawn it-tariffi ġodda li se jwasslu għal kontijiet tad-dawl u l-ilma, ferm ogħla minn dawk diġà għolja ħafna li l-familji qiegħdin jirċievu llum u li kienu jġorru fihom il-piż tas-surcharge ta’ 95%. …F’dawn iċ-ċirkostanzi l-poplu Malti u Għawdxi għandu kull dritt li jġib ruħu kif iġibu rwieħhom popli oħra f’demokraziji Ewropej ... F’dawn iċ-ċirkostanzi l-poplu se jsib lilna tal-Partit Laburista miegħu u jmexxih.” (Joseph Muscat, Torca, 11/1/08 )  

2. During his response to the budget, Muscat criticised government measures (not on energy and water) and suggested alternative ones. In this context he said "Minn fuq dawn se ngibu €72m, mhux mill-kontijiet" (Budget speech,1/11/10).  

In other words, it is crystal clear that Joseph Muscat committed himself to reducing the the water and electricity by €170 million.

Then for some reason I still don't understand he changed his mind and instead of decreasing bills by €170 he said that he was going to reduce them by a measly €15 million. Now which is the real Joseph Muscat, the powerful €170 Million Man or the wimpy €15 Million Man? When he decides I will be the first to tell you.

Finally, the PL's ventriloquist's doll failed to mention two other measures proposed by Joseph Muscat while the country was in the depths of the financial crises - refunding VAT on car purchases (a one off €50 million) and that the Drydocks should not have been closed down (€40 million a year).

Fact: Had Joseph Muscat been prime minister between 2009 - 2011, government expenditure would have been increased by €579 million. In the midst of the biggest financial meltdown in the world.

I rest my case and I suggest that PL puts it's ventriloquist's doll back in the attic.