Nationalist MP Claudio Grech urged the government to focus on start-up assistance initiatives, assistance tied to knowledge-transfers and the family business act as three elements that could result in the long-term strengthening of Malta’s economy.

Mr Grech’s comments come during the budget debate on the economy, investment and small enterprise in parliament  yesterday.

He cited heavy dependence on Foreign Direct Investment for financial services as a challenge. He said that when looking at FDI statistics, there has been a heavy reliance on financial services.

The Opposition’s concern is that relatively, other sectors are not growing at the same pace, which is creating challenges in job creation of specific types of jobs.

Dependence on fiscal measures and tax structures were also cited as challenges to the Maltese economy. These are some of the primary factors that attract investment, however it is very risky and also attracts a lot of criticism from foreign financial regulators, Mr Grech said.

Access to finance and human capital were also cited as big challenges for Malta’s economy. Mr Grech said that one need only look at bank lending to see that access to finance is limited for businesses and start-ups.

He stressed the importance of fostering innovation whilst highlighting the importance of economic performance continuity.

Weak capital spending and low labour force participation have also been mentioned as challenges to the Maltese economy.

COLA

Nationalist MP Kristy Debono slammed the government during her portion of time for not steering the Cost Of Living Adjustment to reflect the high rate of inflation currently underway.

Mrs Debono said that Malta has the highest rate of inflation in the EU, which stands at 1.4%. Inflation of food is currently at 3.5% she said.

While many economists dub this as a healthy and desirable rate of inflation, government’s COLA does not reflect these rates of inflation, leaving people with less cash at hand then 2 years ago.

Mrs Debono repeated a promise that was made by Prime Minister Joseph Muscat prior to the last general election, where he promised to decrease public sector employment by 1000 persons per year.

In contrast, the government has increased 2000 employees into civil service, and has made a large number of replacements.

CEOs do not make good salesmen

Nationalist MP Robert Arrigo said a sales man does not make a good CEO, but incidentally Malta’s CEO is calling himself a salesman. Selling off the company without caution or regulation is dangerous, during his speech in the ministerial budget debate.

Turning to the issue of corporate sponsorship of government initiatives, Mr Arrigo called for its removal stating that the onus should not be put on companies.

“The government makes proposals and the companies pay,” he said.