‘Securing economic prosperity’ vital for Malta’s economic vision, says Chamber

Video is unavailable at this time.

Both Prime Minister Joseph Muscat and Opposition leader Simon Busuttil endorses Malta’s economic vision for 2014-2020 as spelt out by the Chamber of Commerce.

The ‘Economic Vision for Malta’ was drafted by the Malta Chamber together with 20 chairpersons and CEOs of leading companies and the University’s Rector.

According to the report, securing economic prosperity and fostering human development are just two of six fundamentals of the policy.

“Malta is at a crossroads and needs to move forward to address both weaknesses that continue to limit its potential for growth, global changes and new challenges which will threaten Malta’s future wealth and prosperity,” the Chamber said.

President David Curmi said that government and stakeholders could not allow policy procrastination to continue.

While welcoming the Chamber’s document, both Muscat and Busuttil took a moment to engage in a little bit of political tit-for-tat.

While Busuttil claimed the Labour administration was creating wealth through one-off activities, Muscat said it was hard “to take advice from the Opposition” on fiscal sustainability after the PN’s proposal for wide-ranging tax cuts without saying how these should be financed.

“But I will not give in to the temptation for a tit-for-tat,” the PM quipped.

Muscat said there was widespread consensus, including the trade unions and civil unions that an economic vision was pivotal for Malta.

“The vision put forward by the Chamber is something we all can agree on. Malta can exploit a diversified economy, underpinning innovation. It is also of utmost importance that the industry creates jobs,” he said.

Muscat underlined Malta’s commitment to support measures for a more business-friendly Europe.

He said, that the mainstream though about Malta should be of a country from where it is easier to conduct business from. “Before distributing the fruit we must ensure that the tree is healthy,” he said, seemingly in  reference to the PN’s budgetary proposal for €170 cut in income tax for everyone.

Muscat said the government had taken a liberal decision to reform retail outlets’ opening hours.

He also announced that Budget 2015 is set to feature a number of public private partnership initiatives. In the case of Malta Enterprise, the government’s investment arm is set to increase its efforts in promoting investment, leading to growth that is industry-led.

“The Chamber shares our vision that Malta should become the global hub in the Mediterranean, the preferred home for businesses. This encapsulates the foreign and business policies which Malta has adopted over the past 18 months,” Muscat said.

He reiterated that while Europe remained Malta’s “natural base”, the country had to look beyond to countries like China, the USA, Singapore, South Korea and India “which are offering very interesting prospects”.

Opposition concerned by government’s engagement with one-off activities

Opposition leader Simon Busuttil proposed a cross-party and multi-stakeholder consensus on Malta’s economic vision, “on the condition on a clear commitment by government to eradicate the culture of political patronage”.

This political patronage, Busuttil said, has been festering in the fabric of social and business life in Malta for far too long “and which has been sadly, taken to extreme in the past 20 months”.

Addressing the conference, Busuttil said he was also concerned by higher debt, the “inability to stick to committed timeframes and to a minimum of transparency in respect of the energy plan”, sustained declines in imports, exports and industrial production and the tackling of unemployment through a burgeoning public sector.

Busuttil said the Opposition was concerned with the government’s “engagement with one-off activities without offering a holistic vision for the Maltese economy”.

The PN leader went on to list four examples, which he said highlighted the government’s policy of making use of one-off activities: “the sale of citizenship that can tarnish Malta’s reputation; the energy plan that now foresees more energy production than we really need; the government’s reliance on a statistical revision through ESA2010 to bring down the debt-to-GDP ration; or the government’s rapid expansion of the public sector for political expediency”.

Busuttil said a cross-party consensus on Malta’s economic vision would be in the national interest.

“It is in the national interest that we should seek consensus on fundamentals and on strategies that are clearly going to impinge on the lifetime of more than one legislature,” Busuttil said.

The PN leader warned that such a consensus would also mean that the government commits itself to true transparency: “We have witnessed time and again substantial commitments entered into by the government on behalf of taxpayers which are completely shrouded in secrecy.”

Welcoming the recently positive credit rating by several agencies, Busuttil argued that statistical revisions “have masked the real extent” of increasing public debt.

“The sustainability of public finances and the enhancement of our competitiveness need to be set as the anchor principles guiding the country’s wider macro-economic agenda,” he said.

Busuttil urged Muscat to resolve the sustainability of the health and pensions system, pledging the Opposition’s commitment to work alongside the government. He suggested that the introduction of a voluntary third pillar scheme should incentivise savings through better tax incentives and a higher limit of savings.

He said, the government had “the luxury of a responsible Opposition”, ready to support it if it addresses the financial sustainability of the health and pension systems.

“What we need is leadership and not populism. Prosperity is fuelled by economic growth and it is my firm belief that economic growth must be fuelled by greater exports,” Busuttil said.

The PN leader said that attracting foreign direct investment should not be simply based on efficient taxation but on the availability of quality human resources, wage arbitration and infrastructural sophistication.