PN MP Clau­dio Grech says eco­nomic poli­cies must be geared to­wards sus­tain­able eco­nomic growth

Malta Independent - - NEWS -

PN MP Clau­dio Grech said yes­ter­day that eco­nomic poli­cies must be geared to­wards sus­tain­able eco­nomic growth.

Par­lia­ment was dis­cussing the bud­getary es­ti­mates for the Min­istry for the Econ­omy, In­vest­ment and Small Busi­ness

He said that in the bud­get, there were a num­ber of mea­sures men­tioned in pre­vi­ous bud­gets such as the De­vel­op­ment Bank, and the risk in­vest­ment scheme.

“If one has to look at how this coun­try’s econ­omy has grown, one would see that this govern­ment kept build­ing on al­ready ex­ist­ing sec­tors.” He said that this was done while look­ing at the short-term im­pact, rather than long-term which would bring about sus­tain­able growth.

He said that one can­not stop with short-term mea­sures, as if the econ­omy de­pends on one-time mea­sures “then one is not con­struct­ing new eco­nomic pil­lars that would ben­e­fit dif­fer­ent in­dus­tries. When one analy­ses wages, di­vid­ing the date across sec­tors, one sees that real wages did not keep up with the pace of eco­nomic growth. So one has strong eco­nomic growth at macro level, but this does not re­sult in ben­e­fit­ing the work­ers. This shows how the econ­omy is not ben­e­fit­ing and giv­ing value to wages.”

He spoke of the need to struc­ture and create leg­isla­tive struc­tures for new sec­tors to help bring in for­eign op­er­a­tors.

Turn­ing to the fis­cal pol­icy, he said that it is mov­ing to­wards cer­tain changes. “I be­lieve we have to grasp this op­por­tu­nity and move away from in­vest­ments based on fis­cal at­trac­tion, to­wards those that have more sub­stance. If we end up with a sit­u­a­tion where one has a re­duc­ing fis­cal el­e­ment, which would re­sult in a flight of in­vest­ment, then this could have neg­a­tive im­pacts.”

He spoke about in­fra­struc­ture, and said that this is the life­line of the Mal­tese econ­omy. “Without proper in­fra­struc­ture, the coun­try would not be able to con­tinue grow­ing in its op­er­a­tion. For the se­cond con­sec­u­tive year, I can­not un­der­stand how govern­ment ear­marked less cap­i­tal funds than the pre­vi­ous years.”

He stressed that we are now half way through the EU pro­gram­ming pe­riod. “Last year I could un­der­stand why it was lower than 2014 as we were in the be­gin­ning of it. I hope that next year we will see a turn­around and see more cap­i­tal funds al­lo­cated.”

PN MP Kristy De­bono men­tioned the prop­erty bub­ble. “We need to en­sure that, since cer­tain sec­tors can­not stand the test of time as they are not ro­bust, we di­ver­sify.” She men­tioned that there are pos­si­ble sit­u­a­tions that can im­pact the igam­ing in­dus­try as well.

She also spoke about the man­u­fac­tur­ing in­dus­try. “While this govern­ment says it is do­ing well, fig­ures show oth­er­wise. In this sec­tor, govern­ment has not yet pre­sented an ac­tion plan. The truth is in­dus­trial pro­duc­tion and ex­por­ta­tion are be­low the 2012 lev­els.”

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