The Malta Independent 16 June 2025, Monday
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Needed: A pro-business ministry

Malta Independent Sunday, 17 January 2010, 00:00 Last update: about 16 years ago

In these, supposedly pre-reshuffle days, there is one plea I would like to make to Prime Minister Gonzi: the country badly, but badly, needs a pro-business ministry.

This is not an issue about personalities but more about strategies.

Let’s start with the obvious. With an ageing population, and with a sizeable chunk of over 50-year-olds taking early retirement (the bane of past years), Malta has the lowest working population in the EU. There is absolutely no hope that the economy will grow unless the number of people who work increases.

So the first consideration to make is that the way forward for the government is to find ways and means to make work more attractive and, equally, to make this life of indolence and low standards unbearable to an increasing number of people. For, let’s face it, with some social assistance and easily gained social benefits, and if one does not have high expectations, one can get by.

People may grumble and complain about rising prices, that they cannot make ends meet, and yet not enough find the situation so desperate that they go out and look for work. Malta has the lowest female participation in the economy in the EU and in general Malta has the lowest working population as well. How can our economy grow on an ever-dwindling workforce?

Every Christmas the retailers complain that sales have been worse than the preceding year. While this, of course, is indicative of the health or otherwise of the economy, one tends to forget that the number of retail outlets is always on the increase, that people nowadays tend to cross over to Sicily and get what they want from there, sometimes at a fraction of the price they find in Malta. And people are now getting used to buying on eBay and whatnot. But fundamentally, if less people were working, there would be less and less people with money in their pockets out shopping.

With an ageing population, the government’s finances are skewed beyond recognition even if the spending remains the same, for government revenue necessarily has to come from a declining number of taxpayers or from their decreasing consumption. Let alone then all the various good reasons for the government to increase its expenditure, whether on health, at the hospital, on roads, on infrastructure, and so on.

I recently wrote (in another paper): “The country at large is sullen and angry, blames the government for all sorts of things, from pot holes in the roads to the price of fuel and electricity and no one dares find anything positive to say about the government. It is proof enough that the government media itself finds nothing better than to attack the Opposition – there is nothing else for it to say.

There is one and only one way how the country can get out of this rut – by going into overdrive and ratcheting up its economic potential. The sooner we do that, the sooner we are out of recession, the sooner government finances sail out of the red, the sooner we can afford what we today cannot – healthcare, education, tax cuts…

“There is however, one big problem: the present government, for all its pro-business credentials, is not business-friendly at all. It has changed so much since 1987 when it came up as a definitely pro-business party, when it gave free rein to private enterprise, when it removed the shackles of a centralised economy and licence regime. The present government, supposedly the heir to the 1987 one, seems to have brought back the controls, the shackles, the anti-business mentality which so kept us back in the dreadful 1980s.

“First of all, the present government keeps saying it is not its role to run a business, and that it does not intend to interfere in businesses, but that is what it is still doing, mostly with disastrous effects. We thought we only had the dockyards, and once that was solved, all would be fine. Now we find that the government still runs Enemalta through its appointed board, and the country is still suffering from years of no investment, from years of no forward planning. We hope not, but we now seem to have discovered a potential dockyard in the national airline. The government must understand it has no business to be in business.

“Secondly, it has almost become the norm for people in various levels of government to downplay and bad-mouth the business sector. Maybe, just maybe, they seem to have the impression that people in business are those who go whining at their doors trying to get a factory on the cheap, or who just don’t want to let go of the factory they were given even if it is more than clear they do not need all that huge structure, or all that space. Or they just can’t afford the rent.

“No, fortunately, not all business people are like that. On the contrary, most are definitely not like that. They have courage, they have initiative and are enterprising. And they rarely need any help or leg up from the government. On the contrary, as they would tell you, many times when they approached a government officer to get what the government itself advertises as ‘Come and get it’ – EU funds, help for restructuring, they are rebuffed with all sorts of minutiae, forms which must be filled right, or refilled again, or forms and applications that cannot be accepted. Sometimes, it’s true, many of us, true Mediterraneans, lack finish, lack precision. But also, many times it is just the civil servant not giving a toss.

“The government, this government, for all its denials, has covered most areas of business with so many rules and regulations, with so many enforcement regimes, agencies and authorities, sometimes in conflict with each other, that the poor businessman has to spend hours and days just doing the paperwork or running from office to office. For all the government’s repeated promises this will be slimmed up, nothing seems to happen. Rules and regulations win, and win again.

“What the government promises the private sector it then does not deliver. Take the notorious SME parks, the Crafts Village, all that was promised loud and clear by Minister Tonio Fenech in his last budget speech, measures in favour of the SMEs that were supposed to kick in as from 1 January. Where are they?

“And the final cherry on the cake: government-induced costs, from the price of electricity to what were supposed to be the benefits of port liberalization which was meant to bring down, through competition, the price of getting anything from ship to factory instead of this costing more than bringing the article from countries far away.

“Lost in their cocooned offices, cut off from the real world, the smart guys in government think they know it all whereas they little realise how much they are keeping the nation back. And there seems to be no one strong and powerful enough in government to listen to what the people who run the enterprises are saying. When you get people from international companies complaining that once they come here, the people from the government who left no stone unturned till they got them here, suddenly disappear and leave them to face the messes, then you realize that not until a huge change occurs will we be able to emerge from the depths of recession.

“If it does not change, it’s not just its loss, it’s also ours.”

End of long quote. To get back to what I was saying at the beginning: we need a pro-business ministry. We do have a Finance Ministry but that is a pro-Treasury ministry, as it should be, ensuring that the government gets all the revenue it can (actually, it is not doing enough here) and ensuring that government expenditure is kept under control (again, not enough is done here). But we do need a ministry to spur growth, to focus on attracting investment, to focus on macro-economic means to foster growth, to see that businessmen do not find undue obstacles in their way, and to ensure that no government measure impacts negatively on business and jobs.

All this is conceptually different, very different, from what a Finance Ministry should be doing.

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