The honeymoon is over

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An air of discouragement seems to have invaded the minds of the Maltese people. Nothing inspires people with hope for a better future as the number of families living in poverty or on the verge of poverty increases.

The importation of non-European foreigners to fill vacancies in the lowest paying and most mundane jobs has pushed many Maltese into unemployment at this level. The distribution of wealth and income has indeed deteriorated under this so-called socialist government.

NGOs such as “Repubblika” and “Graffitti” organize demonstrations against several actions or inactions of the current administration. These protests are often justified and necessary if our democracy is to survive, but there is an unintended consequence of their actions: they indirectly add to the discouragement of the ordinary citizen because they do not inspire hope for a better Malta in the world. ‘coming.

Meanwhile, the opposition, which should inspire people to look forward to times when the country sheds our current worries, is doing no such thing. Indeed, it is nowhere to be found even if the new government of Abela elected last March is already obsolete. The honeymoon is over.

Robert Abela’s administration is facing huge problems with the negative effect of inflation on the overall performance of government. It is not a local problem that can be solved by the Maltese government.

Inflation is pointing the tip of its nose everywhere in Europe and in the western world. The European Central Bank raised its interest rates again to fight runaway inflation. Fearing sky-high inflation is taking deeper root, EU policymakers are scrambling to rein in the bloc’s most damaging price growth in nearly half a century as it eats away at the household savings and weighs on business production.

In Malta, fuel and electricity are heavily subsidized by the government. Even so, the Cost of Living Allowance (COLA) should be more than €9 per week. It would be the biggest increase ever. This amount faces opposition from employers and trade associations, even though many moons ago – and in different circumstances – they had agreed on how this annual increase would be calculated.

Such a large increase is likely to result in a general price increase across Malta – an increase that would lead to another high COLA the following year, creating an endless spiral of cost of living increases causing wages to rise. and wages, which – in turn – cause a further increase in the cost of living.

Maltese consumers depend on imports for most goods. An article in The Times last Tuesday quoted the CEO of a leading Maltese logistics company as saying the cost of trailers transporting goods from Europe to Malta could only rise. This means that the cost of consumer goods in Malta will increase not only due to the increased cost of consumables at their origin, but also due to the increased cost of transporting these goods to Malta.

This is already evident to people who regularly travel to Sicily for various reasons and are able to compare the prices of property in Sicily with those in Malta. When I was last in Sicily, a friend asked me to get him some over-the-counter medicines which in Sicily are sold at a price which is about a quarter of their retail price in Malta. The substantial gap already felt between retail prices in Malta and Sicily will continue to increase. Maltese people are already starting to travel to Sicily to buy basic necessities there due to their high cost in Malta. This price gap is set to increase.

The situation would have been much worse without the heavy subsidies that the state distributes to keep our fuel and electricity prices low. I believe that these subsidies are not sustainable in the long term and that the government which has promised no tax increases will have to allow a gradual increase in the prices that consumers pay for fuel and electricity. Technically, this will not involve a tax increase but a transfer to the consumer of part of the subsidy that the government disburses each day.

A few weeks ago, the Ministry of Finance announced that all projects that are not partly funded by the EU were suspended. The money has to come from somewhere. Plans to promote open spaces announced in Labor’s election manifesto a few months ago are likely to be scrapped.

However, it seems that most ministers and parliamentary secretaries have not agreed to put pet projects on hold – some of which were even announced in this year’s budget.

Moreover, Cabinet members look at their personal interest in the projects they have promised to their constituents and all behave as if their favorite projects will not be affected. This induces more confusion in people’s minds, with the government sending mixed messages to people who are not yet aware of the seriousness of the long-term financial situation.

In normal times, the end of Robert Abela’s honeymoon should mean an increase in the popularity of the opposition, especially as the medium term approaches.

But in reality, the Opposition is still in a self-induced coma.

And people’s frustrating discouragement can only increase further.

Meanwhile in Brittany

Britain’s new Prime Minister, Liz Truss, has capped soaring consumer electricity bills and moved to promote new energy sources.

As Britain faces a long recession triggered by a near quadrupling of household energy bills, Truss said she would take immediate action to protect consumers.

But increased government borrowing to fund the support package and Truss’ pledge to cut taxes rattled financial markets.

On Wednesday, the pound fell against the dollar to levels last seen in 1985.

The British government is also expected to seek new sources of energy supply, including the issuance of some 130 oil and gas exploration licenses in the North Sea and the removal of the ban on hydraulic fracturing.

UK charities have warned that millions of households will face hardship this winter if the average energy price cap is allowed to jump by 80% in October and again in winter.

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