Yesterday we followed EY's attractiveness survey results.
#Malta’s attractiveness dropped a worrying 25 percentage points. All through the questions asked, the figures spoke of economic handling in dire need of revision.
The survey is held amongst our most precious business leaders, those attracting foreign direct investment to our shores, those investing capital and time on our soil, on our people. For the last 20 years the survey spoke of their ambition to grow, to expand, to invest further. This year, for the first time, the answers to Malta’s attractiveness hits below the 50% mark – a meagre 37% consider Malta attractive right now as an investment destination. A 25% drop from last year’s 62%. Last year’s was already a drop in itself compared to previous years.
While the government plans to collect 34% more VAT, banking on an economic miracle next year, the businesses are telling us that they do not really intend to expand operations or investment. In fact, while 53% of businesses were considering further investments last year, this year that figure is down to 39%.
Behind the figures, is the worrying truth about Malta’s economic and political handling right now. The greylisting coupled with the Maltese government’s evident lack of foresight or control of its effects and the way out of it are sending all the wrong messages to local and foreign investors. Coupled with this, the survey identifies two other very important points, the quest of business itself for sustainability and the growing concern with a government which is weaker and weaker in Brussels, prone to concessions on Malta’s all important tax sovereignty.
On Monday we saw a glimmer of hope with direct and indirect answers to all the points of concern arising from EY’s business survey. The budget reply of the opposition by Bernard Grech touched upon the obvious open questions like the greylisting, where Grech explains that a change of management will send out a clear message to the international community that the Maltese want to start a fresh page.
Grech also mentions the need to sustain with direct measures the businesses feeling the brunt of the grey list, for instance through support with insurance Services and with due diligence burdens through state sponsored assistance.
More importantly however, Grech charts the way for new growth by identifying the triggers which can attract new FDI interest. One idea I found particularly interesting is the proposal to establish a new regime attracting innovation start-ups with a zero tax for the first 1 million in profits and the proposal to abstain from taxation for profits reinvested in company development, research and innovation of human capital development.
The above ideas together with a clearly informed pitch on attracting investments in the two main pillars of the green economy and the digital revolution, with a strong emphasis on upskilling with the help of EU funding, puts Bernard Grech in a better light when compared to the incumbent labour government, as judged by the businesses themselves.
On a more general note, Bernard Grech’s tone in Parliament on Monday was a breath of fresh air to Maltese politics. I found it to be significantly different to what we normally follow in Maltese Parliament. First of all, Grech recognises the good points proposed by the Labour government in Minister Caruana’s budget announcements. More importantly, the Leader of the Opposition then builds upon, in a creative way, the Government’ s own proposals, proposing ways for these to deliver better.
It must be as I was brought up to the tune of ‘Hey Jude’ by the Beatles, or because of an innate desire to see Maltese politics mature to a discussion on policies and political choices to be made, rather than jumping from one scandal to the other, but I feel that Bernard’s pro-active pitch provides the opportunity for a national discussion around Malta’s main political choices. The questions of sustainability and reputation and the growing doubts on the Government’s competence and vision to handle our economy are to be the basis of that discussion.
I think that in this country we discuss the past too much and the future hardly at all. Grech’s future oriented proposals to reconsider Malta’s foreign investment regime, with a focus on innovation and charting the way for new industrial sectors in the green economy and the digital transition, definitely merit a nationwide debate.
Robert Abela seems intent on calling an election ahead of its time this year. The attractiveness survey confirms Abela’s reasons and his imperative need for that election. Abela is risking it. The glamour of labour’s propaganda is coming to be tested with the realities on the ground, where people are paying the price for government incompetence and its greed to feed the few apparatchiks at the expense of all the rest of us. The Electrogas and Vitals contracts are now revealed as the massive parasites on a shrinking economy running on debt to the tune of 4 million a day
Whatever Abela decides, he will find us ready, with vision, policies and proposals to put on the table for a nation-wide discussion. They will strive to ridicule that with petty points. They will strive to demean serious discussions with irony and drama, but we will not fall into that trap. We believe that the people of Malta deserve to be able to make their decisions based on clear political choices. Then let the people decide.
Peter Agius, PN spokesperson & MEP candidate
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