The FOI claimed industry has been calling for action over the past several years. “The country had fallen behind on its factory-building programme, and it seems that Government is still in the initial phases in its efforts to find private financing for this purpose. Unfortunately, Government spent several years not really decided whether Malta’s future economic development should depend on investment in manufacturing activity, thinking that services were a better proposition,” announced that federation.
These policies back-fired badly, according to the federation, however the Government is not showing the right level of determination to encourage investment in manufacturing. “E-Government aimed at business and the tax incentives being offered to small firms, for innovation, research and development and the general provisions for assistance to industry are weak and will not give the required boost to investment that could make the difference in the expansion of the economy and the provision of new jobs,” it furthermore claimed.
The Government’s agenda for public sector reform tallies with what the FOI has been repeating for a number of years. There is now a promise by the Government to move ahead with control of public expenditure, and privatization of state-owned entities that were involved in commercial activities. These entities were absorbing subsidies that were unjustified, especially when they were contributing to further deficits and increases in taxation, continued the federation.
The FOI welcomed Government’s move to continue with its efforts to combat evasion in social security benefits and the invalidity pension. The FOI believes this should yield further savings in public sector expenditure and help in achieving control over public finances. The federation also deemed the Government subjecting all un-employed persons to training schemes in an effort to make them employable, and avoid as much as possible abuse by persons working without a workbook and worse still registering as un-employed and getting benefits without justification, as a good move.
The Federation said it believes that the situation in public sector employment is still unacceptable, and that the proposed measures are certainly not sufficient.
On the positive side the FOI noted the all-out effort by Government to install quality assurance in the education system and the investment for the future improvement of the education sector. The FOI reminded the Government that Malta spends relatively the same percentage of GDP in Education as other EU member states without achieving the good results both in numbers and quality. The FOI and Government have a standing arrangement for consultation with industry about the relevance of education to the business world but the emphasis should now be to optimize the value for money spent in this regard.
The FOI finally appealed to Unions and Government for renewed and genuine efforts to negotiate and finalize a Social Pact in the national interest. All the Social Partners should be mature enough not to allow the discussion on the Social Pact to degenerate to a mere exchange of views without ultimately reaching agreement. “Only a consensus at national level on the measures needed, can lead to further successes in attracting new foreign and local direct investment. Such an approach is the only way to enable the economy to expand on a sustainable basis and to create the needed level of jobs,” concluded the FOI.
Read more about this year's budget on MaltaMedia's special feature: Malta Budget 2005.
Autor: Ruth Davies
Quelle: Maltamedia Daily News, 04.12.2004
