The best is yet to come - Prime Min­is­ter

Malta Independent - - FRONT PAGE - He­lena Grech

Prime Min­is­ter Joseph Mus­cat be­lieves that the best is yet to come with re­gards to the govern­ment’s ef­forts to con­tinue to strengthen Malta.

He said that the changes brought about at the be­gin­ning of the leg­is­la­ture are by no means the core ef­fort, but that mo­men­tum will con­tinue to grow.

Dr Mus­cat’s com­ments were made dur­ing his ad­dress of the an­nual EY at­trac­tive­ness sur­vey. This year’s theme is en­ti­tled ‘the fu­ture is to­day.’

“We are tak­ing growth for granted,” said Dr Mus­cat.

He said that lead­ing econ­o­mists had painted a grave pic­ture of Malta’s fu­ture in 2013, and then changed their opin­ion dras­ti­cally over the last year. He said that the as­sess­ment made in 2013 was be­cause they did not be­lieve that the new in­com­ing govern­ment would not have made a dif­fer­ence – how­ever three years on the out­look has com­pletely changed.

“For a small econ­omy such as ours, so de­pen­dent on for­eign trade and FDI, we are do­ing well. In this en­vi­ron­ment we have not only sur­vived but we have dou­bled our eco­nomic growth and re­duced un­em­ploy­ment lev­els to the low­est ever in Malta’s his­tory.”

When it comes to in­fra­struc­ture, he ad­mit­ted that there is a deficit: “we have grown too much and our in­fra­struc­ture has not grown enough to keep up.”

Dr Mus­cat de­clared that if the Op­po­si­tion is go­ing to in­sist on tak­ing credit for their eco­nomic poli­cies from the pre­vi­ous ad­min­is­tra­tion then they would have to take blame for the crum­bling in­fra­struc­ture.

He said that he wel­comes the Op­po­si­tion’s pre bud­get doc­u­ment, which was launched yes­ter­day, and looks for­ward to see­ing com­mon pro­pos­als. He then said that he hopes the Op­po­si­tion will then ap­prove the bud­get, calling it an im­por­tant step for­ward.

Di­ver­si­fi­ca­tion of ef­forts to at­tract For­eign Di­rect In­vest­ment is a com­mit­ment for this govern­ment, how­ever Dr Mus­cat also spoke of ef­forts to help lo­cal in­vestors.

“In one year we had three times the num­ber of firms ap­proach­ing Malta En­ter­prise to ex­pand op­er­a­tions than in pre­vi­ous years,” he said.

Dr Mus­cat turned to lo­cal ef­forts that help the public in a di­rect way – like the com­mit­ment to in­creas­ing the pur­chas­ing power of fam­i­lies. He said that the em­ploy­ment rate of sin­gle par­ents have in­creased by roughly 20 per cent.

“Thanks to rein­vig­o­rated Jobs+ (for­mer ETC) we now have seven out of ev­ery ten young per­sons who were on the un­em­ploy­ment reg­is­ter now in em­ploy­ment.

“In the fu­ture we need to have more pro­duc­tive work­ers to make up for the de­clin­ing work force.

“It will be the first time that de­vel­op­ments are not looked at case by case, but holis­ti­cally which would al­low for im­por­tant in­fras­truc­tural projects to take place.

“Does this mean that we can rest on our lau­rels? I do not think so. Three years at the helm of this ad­min­is­tra­tion has made us more con­scious of how to im­ple­ment changes. Our strate­gies are evolv­ing to re­flect the new chal­lenges – let us de­liver a bet­ter ac­cess to fi­nance to firms so they can ex­pand.

“In the com­ing years we will con­tinue to work to be­come one of the best, if not the best, economies in the world. We want Malta to be a hub for var­i­ous ser­vices – Dr Mus­cat re­ferred to Barts med­i­cal school in Gozo that is newly be­ing built now and the con­tro­ver­sial Amer­i­can ‘Univer­sity’ of Malta – that has re­ceived the nec­es­sary per­mits to op­er­ate as a univer­sity for just five years.

“I con­cur that growth will come from fi­nan­cial ser­vices and iGam­ing, but I will not be the one to leave man­u­fac­tur­ing be­hind. I be­lieve that man­u­fac­tur­ing can have a cru­cial role to play – and the re­cent Crane Cur­rency in­vest­ment (worth €100 mil­lion; will cre­ate 200-300 new jobs) shows that Malta is com­pet­i­tive with re­gard man­u­fac­tur­ing.”

Ad­dress­ing the same con­fer­ence, Op­po­si­tion Leader Si­mon Busut­til said he be­lieves that cur­rent ram­pant cor­rup­tion found within the govern­ment “cre­ates a rep­u­ta­tional risk to­day that dam­ages our (Malta’s) fu­ture to­mor­row.”

He an­nounced that the Na­tion­al­ist Party will be launch­ing its sec­ond pre-bud­get doc­u­ment, in­clud­ing 91 pro­pos­als, that same day. Deputy PN Leader Mario De Marco will be per­son­ally launch­ing the doc­u­ment, also for the sec­ond time run­ning.

Dr Busut­til tack­led a num­ber of is­sues in his ad­dress of the an­nual EY at­trac­tive­ness sur­vey, such as in­fra­struc­ture, public fi­nances, connectivity, cor­rup­tion, sustainability and the en­vi­ron­ment.

On cor­rup­tion, Dr Busut­til said: “This is the big ele­phant in the room. Ear­lier this year, Trans­parency In­ter­na­tional made an un­prece­dented state­ment calling on our govern­ment ‘to clean up its cor­rup­tion mess.’ Now you know as well as I do that cor­rup­tion is not pro-busi­ness; that con­flict of in­ter­est of peo­ple in high public of­fice un­der­mines the level play­ing-field that in­vestors need and ex­pect; and that well, the Panama Pa­pers scan­dal may well have been swept un­der the car­pet, but it is still there for all to see.

“All this cre­ates a rep­u­ta­tional risk to­day that dam­ages our fu­ture to­mor­row. It makes us less at­trac­tive for in­vest­ment; it makes our ne­go­ti­at­ing po­si­tion weaker on tax har­mon­i­sa­tion and it com­pli­cates our life at a cru­cial junc­ture where we are about to take on the Pres­i­dency of the Euro­pean Union in Jan­uary. So my strong ap­peal to the prime min­is­ter is to sort this out be­fore go­ing into the EU Pres­i­dency.”

On public fi­nance, Dr Busut­til slammed this govern­ment for al­low­ing public spend­ing and the deficit to bal­loon through­out the leg­is­la­ture.

“Public debt has in­creased in ab­so­lute terms by €748m over three years since the end of 2012. Was this nec­es­sary if the econ­omy has been per­form­ing so well?

“Public sec­tor em­ploy­ment: the 25-year-long trend of de­creas­ing public sec­tor em­ploy­ment has been re­versed.

“The qual­ity of public spend­ing is a mat­ter of con­cern be­cause govern­ment has been con­sum­ing more but in­vest­ing less. For in­stance: salaries have in­creased by €26m in the first eight months of this year; and sub­si­dies to govern­ment en­ti­ties have in­creased by a fur­ther €42m in the first eight months, but cap­i­tal ex­pen­di­ture has dropped by €83m in the first eight months.”

Dr Busut­til said that the en­vi­ron­ment should nei­ther be seen as an ob­sta­cle or a vic­tim of eco­nomic growth – but that rather, it can act as a driver of growth, if thought out smartly.

Re­new­ing calls for lo­cal in­vestors to en­ter a strate­gic part­ner­ship with Air Malta, rather than govern­ment plans to en­ter into one with Al­i­talia, Dr Busut­til said: “Our na­tional air­line is not just about tourism: it is about our connectivity to the world and there­fore it is about our econ­omy. We say yes to a strate­gic part­ner­ship, but let’s re­tain con­trol at na­tional level. The de­ci­sions on our connectivity to the world can­not be taken in Rome, Mi­lan or Abu Dhabi. This is why we favour a model that re­tains na­tional con­trol over our na­tional air­line.”

On the heated is­sue of in­fra­struc­ture, he again spoke of a light rail­way that can con­nect Malta and Gozo. In com­ments to the press, he said that this is vi­able and would take a few years to build. “We are wit­ness­ing an in­creas­ing in­fras­truc­tural deficit - the state of our in­fra­struc­ture. Traf­fic con­ges­tion has be­come a prob­lem for our econ­omy. We need an al­ter­na­tive public trans­port sys­tem, such as a tramway or light rail­way that con­nect Malta and Gozo.”

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