Finance Minister highlights concerns about birth rate and education

Finance Minister Clyde Caruana has highlighted the need to talk about the value of education, saying that this constitutes one of the two main problems that the country currently faces, the other being shrinking birth rates.

Speaking in Parliament, Caruana said that his speech was intended to weigh both the economic benefits that the government has introduced to the country since coming to power in 2013 and the problems that the country will face in the years to come.

“What the government has done since coming to power over the last 10 years has not only worked, but has placed Malta near the forefront of various rankings,” said Caruana.

“We have increased the amount of people working in this country. While the percentage of those aged between 20 and 64 who were in gainful employment stood at 64% in 2013, placing us in 19th position amongst EU countries, this figure stands at 81% today, placing us near the top of the EU rankings.”

“At the end of the decade, we aim to see the employment rate standing at 85% to be in the top 3 of this ranking.”

“Those youths who were not in education, employment, or training when we came to power stood at 12% while, today, it stands at 6%.”

“When looking at statistics showing women in employment, 2013 figures stood at 48% but today we have increased this rate to 74%,” Caruana said. The rate of older workers has also increased, from 35% in 2013, to 55% today, he continued.

“What does this all mean?” asked Caruana. “All these supply-side measures are such that our population has greatly benefited,” and “we should be proud of these measures.”

“The reason for these results is because Labour ‘worked’ at the end of the day,” said Caruana.

But there are two main problems related to demographic concerns and the dearth of properly valuing education, .

The first problem that he mentioned concerns falling fertility rates.

“In 1985, there were 5,430 individuals who were born. Last year, in 2022, there were 3,300 individuals born, which is a drastic reduction of more than 2,000 individuals over nearly 40 years,” he said.

“We are guaranteed to see a smaller native workforce in the future.”

The second challenge, which the Finance Minister said is not being addressed at all, concerns the fact that we “fail to recognize the value of education.”

“In order to solve this problem, it’s not a question of throwing more money at it because we can throw all the money in the world at it without tackling it,” Caruana said.

“If this country wants to compete in economic sectors that matter, then it must have competent and educated citizens. We need to look at the quality of work too. The government can offer incentives in this regard but this also depends on the individuals and their assumption of personal responsibility,” Caruana said.

“The race between countries for employability will be based on human skills and technological know-how; the world is moving forward, and advances wait for no one. Everyone has a responsibility to recognize this and do everything possible to enable their children to get the best possible education.“

“Here is a statistic that might shock some: the difference in income between someone who has no tertiary qualifications and someone who has, can amount to over €1.5 million over the course of 40 years in today’s money,” said the Finance Minister.

“Since assortative marriages, wherein couples match the level of education of their significant other, constitute over 70% of all marriages, this means that graduate-level couples can earn more than €3 million more compared to their uneducated citizens, over the course of 40 years.”

“We can talk about tax allowances and reductions but the most important thing to address is our attitude towards education. This is the challenge that we have in front of us and there is a serious need to talk about and address this issue in a non-partisan way,” he said.

“That’s how the economy grows and the country becomes affluent: the more education people have, the more people can add value.”

“I raised this point because the country needs to look at economic development too, not merely economic growth. We need to focus on quality not merely quantity and this is only possible if people have more skills,” the Finance Minister concluded.