A couple of weeks ago I had issued a press statement on behalf of the PL complaining about the government’s structured mission to impose austerities immediately and delay forever the introduction of the budgetary incentives for small businesses.

The government had then replied that I was living on the moon and that the budgetary measures are truly in place. Well, that same week GRTU chief Vince Farrugia went on a rampage at an MCESD meeting accusing the government that it was taking small business for a ride. So I was correct after all.

Last week the government gleefully pounced on NSO statistics showing a sharp increase in economic growth by 3.4 per cent in real terms over the same period last year. Finance Minister Tonio Fenech welcomed the latest figures saying they were a clear sign that the recession in Malta was over.

Now I am on record in stating that an analysis of economic activity reveals that the Maltese economy is still fragile as the recovery in economic activity has only been concentrated principally in three sectors, namely banking, online gaming, and business services, and that several other economic sectors, including construction, were still in recession. That is the truth that is emerging from the statistics.

But the minister said, “we have to continue working at fiscal consolidation, monitor closely what is happening internationally, especially in certain southern European countries, and continue to make Malta attractive for investment.”

I am always amazed at the speed with which the minister makes bizarre and totally incorrect statements. If there is one sector that has been a consistent disappointment, it is that of investment. The decline in investment was the steepest among euro-area countries in both 2008 and 2009, while Malta also recorded the slowest increase in investment during the pre-crisis years of 2006-2007 among euro-area countries. But the minister has the effrontery to state that Malta must “continue” to make itself attractive for investment! Go tell it to the marines.

If you heard the minister interpret the statistics you would really think that we are out of the woods and that we are living in paradise. Ignore for a while what I have been saying all along about the new data. You might think that as the PL man on the economy I am trying to fudge.

But barely a few days had passed from the minister’s upbeat comments about the economy when the GRTU summoned a quick meeting with the Prime Minister for the construction industry, one particular sector that was hard-hit during the recession and still continues to be. Developers have made a number of proposals to the Prime Minister to counter the slowdown. Indeed the GRTU is, like me, concerned that the trade is almost at a standstill.

So, on the one hand you have the minister harping about economic recovery and, on the other hand, the GRTU is complaining of slowdowns!

The construction industry has far more spin offs for the economy than any online gaming and financial services can produce. Not that the latter two’s contribution to economic growth is not welcome, but wages accounted for only about 17 per cent of this contribution to growth, with the remainder accounted for by higher profits, almost entirely accrued to foreign investors. In other words, the profits fly abroad.

The construction industry has a telling effect on the trade of a multitude of other small businesses – carpenters, tile layers, plasterers, bathroom designers, domestic appliances suppliers and retailers and so on. If the industry fails the others fail too.

It is more than evident that the strong growth shown by the last data has been underpinned by a number of specific factors that have little effect on domestic households. The GRTU knows this. Is it possible that the minister doesn’t?

Dr Gulia is the Opposition’s main spokesman on the economy and the self-employed