The best is yet to come - Prime Minister
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.”