The Malta Independent 4 December 2021, Saturday

A clear progressive economic strategy

Stefan Zrinzo Azzopardi Sunday, 24 October 2021, 09:07 Last update: about 2 months ago

Last week's budget exemplified the government's social credentials as it sustained the support it has provided all throughout the pandemic. It also underlined the government's readiness to make the necessary transition in the environmental sphere.

Prime Minister Abela's speech on Tuesday endowed that budget with a strong political narrative. It showed there is a deep-rooted social character to the government's plan of action. In shifting the focal point from economic growth as a purely material concept to one that is measured on the quality of life of the citizens, the government raised the profile of its environmental targets on the national agenda. This is felt all-throughout the budget speech and it was equally strongly relfected in the PM's delivery.

ADVERTISEMENT

The budget must be seen against the backdrop of efforts taken since the outbreak of the pandemic and in view of the current global economic climate.

Much was said on the cost of living which many do feel has tilted upwards. In a context of globalised markets this is primarily due to the pandemic's impact on global markets of raw materials - especially steel, and on the energy-producing fuels which is affecting importing States. The Cost Of Living Adjustment (COLA) long established mechanism which needs major tweaking for it to better reflect the present realities. However, the Opposition is mistaken and misleading in trying hard to convey a message that the cost of living increase was only addressed by means of the automatically generated adjustment.

When one considers the funds voted to directly address needs in certain categories especially pensioners, persons with disability and students who will see no less than 10% increase in stipends.

Considering the Opposition's description of the budget as one which overspends, a stark contrast emerges in economic vision. On the one hand there is a party in Opposition that in face of global economic challenges is inclined towards austerity and acted in this manner when holding the reigns of power. On the other hand, a progressive government which faces international economic adversity by investing in people, believing that a stronger general purchasing power stimulates a healthier economic performance sustaining growth while simultaneously ensuring a positive atmosphere and living conditions shared by the many.

This distinction lied at the basis of the message delivered by the Prime Minister who pointed out the way the budget ensured price stability in utilities and fiscal deductions. Together these aim to shift the burden of disrupted international economic activity from the families and instead promote their increased participation through both work and leisure.

Away from cheap political rhetoric, in its second budget this administration is crystallising an economic vision that truly invests in people.

By investing in people we also understand investment in public services. The measure that won the headlines was that making public transportation free for everyone. This is measure which will make Malta only the second European country to provide its residents good quality public transport for free, has environmental benefits as much as social ones. It encourages collective modes of transport and less cars on the road as much as it induces everyone's sense of connectivity.

In a country whose economic backbone consists of small and medum sized enterrises and micro enterprises, investing in people translates into specific measures that address small business. From support to use warehouses to lessen the burden of importation and reduce logistical costs to the support provided to small businesses to switch to more sustainable equipment.

As the Leader of the Opposition focused on the deficit and public debt which are the direct result of the investment made to emerge out of the pandemic-triggered slowdown, Prime Minister Abela underlined the 13% economic growth.

The latter is exceptional in the difficult global climate and it is equally uplifting as it shows that the progressive economic strategy is yielding significant and meaningful social impact.


Stefan Zrinzo Azzopardi is Parliamentary Secretary for European Funds at the Office of the Prime Minister

 


  • don't miss