Let’s take up the challenge!

The budget for 2018 is another first – the first ever without any taxes and no increases on existing ones. It continues along the process of a fair distribution of wealth with prosperity with a purpose and a solid projection for the future.

Finance Minister Edward Scicluna’s budget speech last Monday spelt out the various measures towards these ends, and listed how individual categories of people will benefit from such measures, increasing their wellbeing over the coming year and beyond. In this respect, I am also proud to note that budget for the Gozo Ministry will be increased next year.

SMEs in Gozo

It was a welcome opportunity for me on Thursday to addess an important gathering of local entrepreneurs about the prospects and challenges for small and medium enterprises in Gozo. I always keep in mind the wider picture of the country’s strong economy and the government’s unfailing commitment to transpose this into opportunities for everyone to share and contribute to.

As Minister for Gozo, it is my duty to focus on the real situation in our island-region, with its particular strengths and challenges. It is an understatement that at the basis of this scenario – however challenging – there is always the typical Gozitan potential and resilience, both individually and collectively. Both values need to be understood and appreciated by any administration. Eventual support – fiscal or otherwise – will always be based on these values, to which we add our trust in the strong entrepreneurial spirit.

Dialogue leads to further understanding and better planning, and I have ensured that I personally discuss business-related issues with all constituted representative bodies. It was precisely in our initial meetings, in the very first weeks of my appointment, that we acknowledged the increasing difficulties in recruiting the required numbers of Gozitan workers. And we specifically commissioned professional studies, particularly to analyse the skill gap on the island and the kind of employment Gozitans were seeking in terms of the career they wish to follow. This is already in progress.

Dialogue and participation

We also agreed that Gozo’s business community will be involved in the planning and implementation of major projects so that the resulting economical benefits can be fairly enjoyed by the widest number of people, including both larger and smaller enterprises. This commitment emanates from the Labour government’s election manifesto, overwhelmingly approved by the vast majority of the Gozitan and Maltese electorate.

As Minister for Gozo, my remit includes all that Gozo requires and deserves, and this entails full and constant attention to all categories of people and activities in our island-region. Without any doubt, small and medium-sized enterprises are of major importance in the economic, social and family texture of the island’s population.

We know that SMEs are the backbone of the European economy. In the case of Gozo, microfirms are its bread and butter: the success, weakness and potential of the Island-region crucially hinge on the way in which micro-firms are managed and nurtured to grow.

A closer look

From a macro-economic perspective, the Gozitan economy is growing. Its GDP has increased by over €80 million over the past five years, which is around €2,500 per inhabitant. It is evident, however, that a more focused consideration indicates that the economy of Gozo has not been able to keep up with the spectacular growth of the national economy.

This calls for action from two perspectives: firstly, Gozo may yet need to realise the full potential of its contribution to the national economy and secondly, the situation may be resulting in higher regional disparities across Maltese society.

This is also apparent in the context of the outflow from Gozo of the younger workingage population, often highly skilled, to obtain better paid employment, with a higher potential for advancement, in Malta and beyond. It is perfectly acceptable to consider that this may be prompted by the characteristic ambitions and aspirations of young people to achieve higher goals in life. But we have to ask ourselves why they do not seek such achievements locally, and keep hovering within the faster digital world beyond Gozo’s shore and explore a better personal development, fulfilment and living.

These considerations are very much mirrored by the patterns of activity of business enterprises in Gozo. A quick look at the situation shows that, for many years, the Gozitan economy has been more dependent on the public sector than on business enterprise. The public sector generates one-fourth of economic value-added in Gozo, compared to one-seventh in Malta. Furthermore, while Gozo accounts for around seven per cent of the national population, it accounts for only 6.5 per cent of enterprises and the employment within them is only 3.3 per cent of the national total.

Gozo’s success story

This is not to say that Gozo has not been a success story in its own right through the achievements recorded in the national economy over the past four years. Let us be true to ourselves: in many ways, Gozo’s success story has been the fruit of local entreprenours as much as it has been to our own families.

We need to look beyond: the prospects are there for the taking. Apart from the growth in gross value-added registered through tourism and construction activity, there are a number of projects in the pipeline including the fibre optic link, the new hospital and medical training facility, the home for the elderly in Għajnsielem and related initiatives within the elderly and disability sectors, together with the Gozo Museum and the new ICT business-related centre in Xewkija.

On their own, these are expected to generate over 1,000 jobs in a period of five years and then there is also the new SME park, with the planning approval process underway. But I strongly believe that there remains strong potential to be realised through the promotion of modern, competitive and outward-looking private enterprise in Gozo.

The way forward

This requires us to come together from the various fields of governance, business representation and workers to create the critical mass needed to promote the right environment for business growth in Gozo. The ultimate aim is to generate a variety of different job opportunities on the island, targeting high valueadded sectors in traditional and new economic activities whilst tapping into Gozo’s location and uniqueness.

Under my watch, the Gozo Ministry is currently working on an Economy and Human Resource Strategy within the ambit of a far broader Gozo Regional Development Plan, which will be launched early next year. We want to ensure that the right decisions are taken, at the same time reducing disparities with the national economy, creating non-seasonal employment and raising the employment levels of specific groups. These will not to be shelved, but implemented within set time-frames.

The ultimate aim of this Strategy is to balance job generation with the attraction and retention of our own people’s skills, so that we can increase the number of jobs in Gozo over a period of 10 years. I am confident that we can achieve this together.

The Budget for 2018 has already indicated new capital projects and innovative measures through various schemes and in various fields. Business start-ups will be encouraged, with appropriate fiscal incentives in key priority areas, while micro and small businesses will be strengthened in order to grow whilst fostering job creation.

We need to be a team! As a Gozitan and a government minister, I am fully committed to work – together and hand-inhand with all stakeholders – towards more initiatives to ensure a healthier and better life for future generations. This is our collective challenge.