Tomorrow's budget will be the third presented by the Nationalist Party in government since it was re-elected in 2003, and the 12th since it was elected in 1987. Except for a brief period of 22 months, the Nationalist Party has been in government for the last 18 years. So there is no doubt that the Nationalist Party is responsible for the state our country is in.

Over the last few months I have been meeting voters who tell me that they have always voted Nationalist, yet they now say that they will definitely not vote Nationalist next time. When I ask them whom they will vote for, I get a range of answers. Some tell me that they will not vote at all, others that they are undecided and will make up their minds closer to the election. Others, especially in the Sliema, St Julian's, Swieqi and Pembroke area, tell me that they will be voting for Alternattiva Demokratika as they did in the June 2004 elections for the European Parliament. Some others tell me they will be voting Labour for the first time in their lives.

I always ask these people why they have already decided to break with their personal and family tradition and not vote Nationalist in the coming election. I always get practically the same answer: "I feel cheated. For many years we were told by the Nationalist Party that money was no problem and that the deficit did not exist and the public debt was no problem. Just two years ago we were being told the country's finances were on a sound footing and that jobs, prosperity and better governance, a healthy environment and a better quality of life were all within our grasp. The Nationalist Party has certainly not delivered what it promised just over two years ago."

They tell me that their families are finding it hard to make ends meet as taxes and bills devour a big chunk of their disposable income. Pensioners have also seen their quality of life deteriorating and health costs have increased and are undermining their pensions and savings.

Businesses are finding it hard to survive as the economy stagnates and taxes and government bureaucracy take away most of their earnings and energy. Businesses have to cope with the problems caused by government. Small and medium enterprises involved in tourism, trade and industry are finding it very hard to survive. They have been sacking workers, recruiting part-timers, and doing most of the work themselves to cut on costs.

Often I hear these words when I meet business people: "The Nationalist government is running us out of business. Profits are being squeezed and our businesses are not remaining viable. Persecution by the Tax Compliance Unit, increasing VAT, introducing the eco-tax, a high tax on inherited property tax, having to pay higher prices for fuel and stiffer charges for water and electricity... taxation is killing us. Government is not just our partner taking what is due to invest in education, roads, health, social services and environmental protection. Government has become like a giant leech sucking our blood dry."

Most of the former PN voters also resent the fact that a handful of persons well connected to the party, and most of them responsible for the mess the country is in, are still enjoying their bonanza.

Creating wealth

Many people are worried about the future of their children. Where is economic growth going to come from to provide them with good jobs when they grow up? Government must create the right conditions for the economy to start growing again.

 Tourism must be given a new lease of life, not only to make it attractive again for new investment but also to help create the jobs we need for our young people. We also need to strengthen the service sector of our economy. As islands we need to exploit our natural maritime resources better. People in the financial and banking sector feel that besides financial services, we need to concentrate more on ship management services, support services to the North African offshore oil and gas industry, and ship chartering services.

We can also have a thriving educational services sector offering more advanced training services ranging from the teaching of English to foreign professionals (not just young students), to training in maritime skills and banking in conjunction with recognised international institutes. Government must do more to help this sector to grow and must not impose new taxes on host families while facilitating visa procedures to attract persons from the growing global market of non-EU countries.

We are finding it difficult to attract foreign direct investment because of our lack of competitiveness. We have simply become too expensive for the low skills industry entrepreneurs. The Baltic and the Balkan states, quite apart from China and India, are much more attractive to potential foreign investors.

We must also address the structural problems in our tourism if we do not want it to decline further. We need to reinvent ourselves and discover what makes us different and better than other competing destinations. We must then exploit our natural and cultural resources much better than we are doing at present.

Our educational system is also letting us down. We still produce semi-illiterate young persons who are unemployable in today's economic environment. We also have one of the lowest records for science and mathematics graduates who are so much in demand in a modern economy.

Finally, our worst enemies are our own unrealistic expectations. After having poisoned the attitudes of a whole generation of Maltese citizens by creating an illusion that we could keep living beyond our means, we are now crashing back painfully to reality and realising that we no longer have the natural ability to face the tough challenges of survival in an economic climate which does not tolerate mediocrity.

The future of manufacturing industry in Malta, as indeed in most of Europe, is bleak because of the competition coming from China and globalisation generally. We need a clear industrial policy and the country remains with a national strategy in the economy. Putting all our eggs in the property business is very shortsighted. Investment in property is no guarantee of risk-free returns.

In the Maltese context we need to distinguish between the market for land, which is and will always remain scarce, and the market for residential and commercial property. The latter two markets are undoubtedly more subject to the economic laws of supply and demand because the supply is not fixed. The evidence is that the stock of residential property in Malta is growing at a much faster rate than demand both from local and foreign buyers. Yet thousands of new properties are still being constructed. Apart from making our islands uglier, how long can this building frenzy go on?

It is a fallacy to believe that the property market in Malta is different from anywhere else, simply because there is a limit as to how much people are prepared to pay to acquire a residence or a commercial property. It only takes a price stagnation of three years to shave off 20 per cent or more of the value of property belonging to developers who borrow heavily to finance such property. Persons who follow the property market closely feel that there are already signs that price stagnation has set in.

evaristbartolo@hotmail.com