The annual pre-budget document published by the government a few weeks ago signals the imminent return of a fresh political season. The document has become a useful tool for this administration as it seeks to outline its principal strategies and proposed intended projects for the coming fiscal year. Furthermore, the pre-budget document creates a valid platform for interested parties to comment and present suggestions for the budget’s improvement, adding much needed input for a comprehensive and successful allocation of the country’s resources.
This year’s document has been given a specific title − “Together we work to create jobs for you” (Flimkien Noholqu x-Xoghol Ghalik) The very title encapsulates the principal aim on which the government has striven throughout this legislature to create an environment that is conducive to investment and job creation.
The last few years have undoubtedly been an ongoing process of transformation in the mechanics of the labour market that has led to changes in work practices and methodologies. This accelerated change has stimulated an environment that is economically stable and hence conducive to both further inward investment and also from abroad, and this in a period of turbulent financial times that have dominated European politics for the last five years. In the present economic situation, the challenges faced by this government to create jobs and work has been great, as most of our trading partners are struggling against the ravages of a prolonged recession. This environment has required our policy makers and employers to be creative, flexible and sensitive to economic trends that are constantly changing the business and investment landscape.
This year’s pre-budget document presents a comprehensive assessment of the economic and financial performance of Malta of the last few years. It also seeks to compare and contrast this performance against international benchmarks, highlighting the nation’s achievements in its ongoing attempt to preserve jobs while creating fresh possibilities for investment and hence employment.
Beyond partisan rhetoric, Malta’s economic achievements in the last two decades have been impressive. One has only to consider that in the last 25 years Malta’s GDP has increased nine-fold rising from €1 billion in 1987 to €9 billion last year. This growth is proof of the successful policies adopted by the Nationalist Party in successive legislatures. These statistics confirm not only an increased productivity but also an even greater participation in the labour market and a subdued level of unemployment.
In the last few weeks, the death of Dom Mintoff rekindled some memories of the economic choices and realities that preceded 1987. Clearly, the Socialist’s economic style of the seventies and eighties is in complete contrast to those adopted by Nationalist policy makers that followed. Successive PN governments understood the need for intense long-term investment especially in education, infrastructure and communication. This massive investment has transformed Malta’s economic landscape and produced a revamped workforce that is highly skilled and capable of handling added value services and industries.
Chief among these industries are informatics, pharma and financial services. All this investment requires vigilance and servicing. In a globalised economy, it is paramount to have an up to date work force and comprehensive legislation that copes with an international trading platform. As we can witness from our European neighbours, specialised skills are necessary but not infinitely sufficient. Competitiveness, productivity and a flexible workforce are essential not only to preserve jobs but also constantly create new ones.
Another thorny issue addressed in the pre-budget document is the critical national debt and annual financial deficits that seem to plague all modern democratic governments with their attendant costs. This government has made it clear that although it accepts the realities of state borrowing, especially for long-term projects, annual and persistent deficits erode a country’s long-term financial prospects. The government has committed itself to reduce its widening deficits, which although in many cases are a necessity, will, if unchecked, lead to undesirable consequences.
The document recognises the importance of a healthy and stable economy that guarantees a sustainable system of social services, a comprehensive educational system and an efficient health sector. Furthermore, this budget seeks to boost an underfunded research and development sector. In fact, it appears that the government intends to substantially increase the national budget for R&D up to €4 million by 2014. This move signals the government’s intention of refining our technical skills that will in turn further inward investment.
Obviously, this document is unlike others published before it as in the course of the upcoming fiscal year a general election will confirm or renounce the present administration. In this sense, the document is more an indication rather than a solid statement of intent for the coming fiscal year.
More than anything else, the document confirms the government’s long-term ambitions for this country while celebrating the economic achievements of this legislature. Moreover, it confirms a PN vision that offers economic and political continuity, which in turn guarantees a stable environment for the continued creation of work for all the citizens of this country.
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