MP underlines government's responsibility for job creation

Labour MP Evarist Bartolo insisted yesterday that the government should shoulder its responsibility to create the right environment for investment and job creation.

Speaking in parliament during the debate on a bill to implement budget measures, Mr Bartolo said the government should not simply blame globalisation for rising unemployment.

A government did not encourage investment when it raised costs, the national debt and the tax burden and made it difficult for investors to borrow from the banks because of its own borrowing.

What the government needed to do was to examine why other countries were more attractive for investors. It needed to list Malta's investment strengths and weaknesses and create the factors needed for investment to rise.

It was because of the government's mistaken policies, for example, that Malta now had one of the lowest skilled workforces in Europe particularly in areas of engineering and technology.

Unemployment, Mr Bartolo said, caused serious social problems. The unemployed could not be seen as numbers but as individuals who had families to support. A psychologist was recently assigned to help MDC employees , but it would be better if the workers were not driven up the wall in the first place.

Many workers felt betrayed because circumstances now were very different from what the PN had said they would be only a short time ago, Mr Bartolo said.

It had now transpired according to revised figures, that Malta's GDP was 71 per cent of the EU average, meaning that Malta would soon not be eligible for funds given to regions where the GDP was below 75 per cent of the EU average, as the MLP had predicted.

Mr Bartolo said the need for job creation was underlined not only by unemployment, but because Malta also had one of the lowest European participation rates in the labour sector, particularly among women.

Clearly all parties should work on an economic recovery plan so as not to threaten Malta's very future.

What the government needed to attack in the budget were not social services, but squandering. What had become of the increase promised to pensioners in terms of the two-year-old civil service agreement?

Mr Bartolo also criticised the government for not showing any enthusiasm to equip parliament with the structures and facilities it needed to effectively participate in the EU decision-making process.

Earlier in the debate, Labour MP Anglu Farrugia said the Nationalist Party used to tell the people that a vote for EU membership would lead to economic progress, but soon after the elections, large companies started dismissing their employees and more than 1,600 people to date had ended up jobless.

One reason was a lack of collaboration between Metco, the MDC and IPSE and the delays in their amalgamation to form Malta Enterprise.

With the economy going backwards there needed to be an all round national effort to solve the country's problems. The opposition would continue to defend workers whatever the circumstances and if the government was burnt out, it should resign and let Labour administer the country.

Urgent action was also needed to shore up tourism, especially since competing destinations such as Tunisia were doing much better than Malta.

Dr Farrugia also criticised the government for raising taxes on the sale of inherited property and raising the contribution which residents of old people's homes had to make.

Nationalist MP David Agius said the Maltese economy was competing in an increasingly competitive environment and changes were therefore needed to maintain competitiveness.

The government was laying increasing emphasis on investment promotion. Investment would not come as a result of the street protests the GWU was advocating. Rather, such actions would raise tensions, which was not conducive to a healthy investment environment.

Mr Agius also pointed out how the government was investing in well-built roads and taking other measures such as the re-development of the crafts village.

Noel Farrugia (MLP) said the budget proposals went against common sense. International trade bodies were insisting on the lifting of import controls but Malta, in contrast, was raising duties on imports of food products of the kind not produced in Malta, such as canned tuna. The government should list which food products would see higher duties as provided in this bill - including feed given to animals.

The government could not remain passive as prices rose steeply for consumers, processors and the tourism sector.

Clyde Puli (PN) said year after year, measures taken by the government proved to be the best in the circumstances, even when they were not popular. The introduction of VAT was a case in point and the MLP now accepted this tax.

Now the MLP was organising a campaign of street protests against the budget measures, when it was well known that the economy was not boosted in this way. What the economy needed was for all to work together on new measures for new circumstances. What the opposition should do was to propose solutions to the problems it saw.

The opposition was trying in vain to make the people believe that the recent spate of redundancies in the textiles sector was due to EU membership. Malta's workforce needed to be retrained to remain competitive. EU membership was a means for Malta to remain competitive globally.

Dr José Herrera (MLP) hit out at the government over its borrowing requirements, observing that the public debt had reached Lm1.1 billion with interest amounting to Lm75 million. Borrowing another Lm100 million, as the government was making provision for, would raise debt servicing to Lm90 million, which was very alarming.

Referring to powers being given to the minister to issue regulation on new taxes in line with EU decisions, Dr Herrera insisted that there should not be taxation without representation and such issues should therefore first be moved before the House.

Dr Herrera said notaries had justifiably protested when it was found that new taxation on the sale of inherited property affected properties over which promise of sale agreements had already been made. The new tax was made worse by the fact that in the past the PN used to be against succession duty. This measure would further fuel the increase in property prices.

Having promise of sale agreements registered was positive in itself, but one hoped that architects would do their work seriously and property value assessments were realistic.

Dr Herrera said the high taxes to be charged on imported second-hand cars were socially unfair and negatively affected those who can least afford to buy a new car.

Chris Agius (MLP) said growing unemployment was in stark contrast to the "new spring" the Nationalist Party had promised.

Both trade unions have expressed their concern over the worsening situation. Not only were more workers losing their job, but many others were being forced to accept inferior working conditions.

The government should have done more in this budget to help the manufacturing industry. Two years had been wasted on the setting up of Malta Enterprise and he hoped the corporation would now be able to make up for this lost time.

Unfortunately, government measures, such as the increase in VAT and income tax revenue, would not make the situation any better.