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

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.”