The Minister of Finances, Clyde Caruana was brewing with pomposity as he made a speech in parliament extolling the virtues of tax collection. I liked the script and I have no problem with pomposity and a bit of arrogance and I exude some of it myself, admittedly.
Clyde’s pomposity will be excused if the current tax regime collects the taxes of Malta’s rent-seeking classes who have abused the system endlessly. As of now, it is all and still lip-service, pomposity and nice speeches. Charles Polidano (Iċ-Ċaqnu) is set to receive government contracts worth millions of Euros despite the fact that he has a hefty historical tax bill to pay. And like Ċaqnu there are many others who have acquired wealth irregularly and even illegally and these include also politicians. There is still a great chasm between how the tax department treats honest businesses and businesses who constantly abuse the system and participate in rent-seeking or corrupt practices. Clyde can sing beautiful ideological songs as much as he likes, but it is about time he realizes that he is not just a social media influencer who can change the culture or mentality of how things are done – he is also the Minister of Finance and has the ability to execute. There is also another important point that can’t be overlooked in Clyde’s speech.
Clyde is saying that the government should collect more taxes so as to pay for the ever-increasing debt. So, finally, the Minister of Finances admits that we have a debt problem and the solution, according to him is by exclusively paying it off with taxes. There may be nothing wrong with Clyde’s thinking and economic-political theory in a normal set-up, but we would miss the wood for the trees if we also fail to mention the fact that an excessive amount of public money is still being wasted in corrupt contracts and rent-seeking. The payroll of the Office of Robert Abela grew from €12.5 million to €21 million in the last two years alone and Clyde wants us to pay for these ever-increasing bills. Apart from the ever bloating of the public sector wage-bill for Party hacks and both incompetent and corrupt government officials, we also have to contend with the fact that the government is still paying off the recipients of corrupt contracts such as in the Electrogas contract and the Steward’s Healthcare public hospitals contract. Then there are the vanity and rent-seeking projects such as the race-track and the lavish building for seized goods.
Clyde’s virtuous position on tax collection is overshadowed by the government’s lavish rent-seeking bill. Simply put you can not extoll your virtues on tax collection if your government is constantly blowing money away on rent-seeking and corrupt contracts and useless jobs for Party hacks.
There is more. A big part of tax evasion in Malta takes part via Party donations and adverts to Party media in exchange for public contracts and favours. Gearing up the tax department to collect more taxes is the obvious and the right thing to do, but Clyde’s speeches miss the wood for the trees. The culture of impunity in Malta is not exclusive to tax evasion – it is rampant in all sectors because the government enables it and allows it in the first place.
Clyde will stick to being Minister of Cultural Influence if the problem of rent-seeking is not addressed structurally. The Nationalist Party has made the small and yet important step of proposing a raft of new bills which would restore rule of law by enhancing and adding new institutions against corruption and providing new laws against the corrupt and criminal association and conspiracy of politicians. Robert Abela’s government is two years in and the technocrat that so many lauded Clyde to be, is yet to deliver.