Encounters

It was the first Budget to be presented by Dr Lawrence Gonzi as Prime Minister and Minister of Finance. On Wednesday night Dr Gonzi opted for a managerial and highly focused approach. I could easily compare the Budget presented to a precise electoral programme that needs to be implemented over one year.

Targets and benchmarks are not hedged or presented as vague promises. They are not only spelt out very clearly but are also backed by timeframes that need to be observed. The Budget, apart from containing information on revenue and expenditure levels, indicating in the process how the deficit targets are being met and improved upon, is structured in an Action Plan format.

I am enthused by the strong signals that the Budget offers in favour of tourism and culture. That is not merely a personal assessment but is very much shared by people in the industry and within our culture and arts circles who approached me immediately after it was read out to express their own satisfaction and stronger motivation to do their own part.

The day after the Budget speech, I attended the entire proceedings of the Malta Tourism Authority's annual general meeting, and then on Friday I was delivering the concluding address at the MHRA annual conference.

Outgoing MHRA president Winston J. Zahra reflected the mood of all participants on both occasions when indicating that there has never been a Budget that gives such a positive message in favour of the tourism industry, and then proceeded to highlight a few of the concrete steps that will be taking shape in favour of tourism and that are precise commitments in the Budget speech.

Many other participants at both events have approached me to express their gratitude and satisfaction.

The Budget makes it clear that the measures and initiatives which the government is announcing are drawn up around man in the centre of our political work. "We want everyone to benefit from all the opportunities to develop as a person," the Prime Minister stressed. He then dwelt on the three pillars on which we shall be together renewing our country: healthy public finances and an economy which grows at a faster rate; quality education for all; and a nice, clean and healthy environment.

Within the context of Government's first pillar, tourism and culture have been given the importance and stimulus that have been much needed.

The Government is declaring that our aim is to have an increase of between 100,000 and 150,000 tourists by 2006/2007, which means an increase of 50,000 a year for the next three years.

Government has also decided that a strategic tourism policy should address two aims. The first is to keep the market share of tourists who visit Malta to enjoy the sun and sea and who book through established tourist agencies and specialised tourist operators. The second is to dedicate more financial resources and marketing efforts to attract tourists in the following categories: cultural tourism, spot tourism, language learning tourism, conference tourism, Gozo as a tourist destination, and other niches such as cruises and stay, health and retirement, short breaks, agro tourism, gastronomy, events and yachting.

Fully conscious of the fact that there is an intimate link between our heritage and the tourist product we offer, Government will next year be increasing the allocation to Heritage Malta by Lm400,000 to Lm1,650,000, and in addition Heritage Malta will keep the Lm1 million revenue that it generates. Moreover, Government will be boosting restoration and rehabilitation initiatives.

The signals in favour of the tourism industry do not stop there. The Prime Minister declared in his Budget speech that in the coming weeks, the Government will be taking the necessary decisions about an additional two golf courses, one of which will be in Gozo.

Moreover, an additional Lm100,000 will be allocated to draw up a schedule of restoration and conservation of the Ggantija temples to improve the tourist product in Gozo.

A clear message in favour of benchmarking and setting deliverable targets is being given to the MTA. Over and above a fixed allocation of Lm8 million to the Authority, Government is allocating an additional Lm500,000 if certain arrival targets are met through its operation. This innovative approach is being applied for the first time ever and it is suggested that this could become part of the financing formula.

Then, apart from retaining the reduced VAT rate of 5% on hotels, Government will also be drawing up a scheme of refunds on part of the VAT paid on international conferences held in Malta. This is one of the measures that, in the consultative process leading up to the Budget, was submitted as a recommendation by MHRA.

It all proves that right up to the drawing up of the final text of the Budget speech, Government was welcoming constructive suggestions that were being made by the country's social partners. I have lived this experience when on Tuesday evening, less than 24 hours before the Budget speech was read, MHRA informed me of a proposal they had made to Minister Austin Gatt regarding spreading out differently capping levels on the new water and electricity surcharge (to absorb in part the astronomical increase in oil prices). Both Austin and myself forwarded a copy of MHRA's proposals to the Prime Minister and a commitment that Government would consider different options on the capping levels so that more hotels benefit in the process was in fact inserted in the Budget speech at the eleventh hour.

References to tourism are also made in Appendix C to the Budget Speech where Government reiterates that it intends to go ahead with the implementation of the restructuring report drawn up by Deloitte and Touche to have a more efficient and cost-effective Tourism Authority. A consultation process with the Opposition as well as with stakeholders is being set in motion to enable us to take all the relevant decisions in favour of the industry and the country's renewal as a whole.

The fact that we have had an increase in tourist arrivals for each month as of May makes our challenge even more interesting. There is no room for complacency and we must work hard together to try to secure further growth. Overall tourism has had increase of 2.1% for the first nine months of this year as compared to the first nine months of last year and we are expecting positive results for October, which will further consolidate the overall performance. Moreover, earnings from tourism in the first nine months of this year have increased by 3.5%.

Nonetheless, tourism remains a volatile sector and requires the commitment of all stakeholders and the public. Tourism represents the best possible joint venture between Government, the industry, local councils, voluntary organisations and the public at large.

When the Budget makes the crucial point that it should lead to renewing the country together, there is a message that cannot be missed by each one of us.

Renewal depends not only on Government actions but also on what all of us do to ensure success for the country as a whole. We all make choices on a daily basis. With regard to tourism, those choices include how we behave towards foreign visitors, what prices we charge, whether we treat our clients well, whether or not we are living up to our tradition of hospitality or whether we are letting ourselves down in this regard, whether we are extending a genuine smile or not to the visitors we work for and who in turn account for no less than a quarter of our economy.

At the MTA annual general meeting I reiterated what has already been emphasised by different persons - ultimately no-one owes us a living. The outgoing tourist leaving any of our source or emergent markets. Tourists are more spoilt for choice than ever before and it is up to each and every one of us to offer visitors value for money.

The political will is hardly lacking and the Budget makes that point more than eloquently. Now it is up to us to be part of the renewal process, to be positive and to make it happen together.

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