During the Budget debate, the Government was challenged to contain the deficit, which seems to have engorged, placing it above or, at least, close to the eurozone’s three per cent maximum.
We probably all agree that it is the Government’s duty to support the economy and to encourage the private sector with a view to delivering sustained growth. It is in duty bound to be at the forefront to design policies that sustain the economy and provide the necessary support where it is most needed: families, pensioners and businesses.
However, I also believe that the Government is obliged to outline the responsible course of action to support the economy during this ongoing global economic slowdown. On the one hand, we have all seen the benefits of globalisation, reflected in cheaper goods, but, on the other, we are also facing the difficulties that need to be overcome in restructuring if Malta is to withstand the competitive pressures of the single market rooted in a global economy.
The economy can only be successful if it works for everyone and there is no respectable economic policy without an equally virtuous social policy.
Malta needs to embrace social policies that match the economic realities. Sensible social policy implies that no risks with inflation are taken and the public deficit remains checked.
Malta must persistently restructure and improve in order ‘to keep up’. Anti-competitive practices should be dejected and solidity, judiciousness and job opportunities should be a main concern.
The Government should aim for an even split between raising additional revenue and lower spending. Given the scale of the deficit, there is need to spread the burden of adjustment to make it cost-effective and socially credible.
It is doable to achieve savings in social welfare by instituting modern application and work practices. In addition to established economic processes, new ways of generating and distributing wealth must be instituted, particularly in view of the need to increase the participation of effective micro-enterprises, which can help diversify Budget activity.
Another challenge worth engaging in is that of initiating an honest public debate about what kind of economy we would like to have. Even so, a sustainable economy is constructed around myriad policy foundations. Let’s say the Government should substantially boost funding for energy efficiency projects that will make for energy proficiency in homes and businesses.
A modern economy sees significant opportunities for developing businesses, which are not constrained by Malta’s size, in new areas such as biotechnology, information and communications technology and design. Malta Enterprise and the Malta Council for Economic and Social Development, among other entities, should be properly resourced to enable progress, rethinking and vision.
We live in a consumerist society that is constantly enticing citizens to spend, with media pressure spasmodically pushing people to the brink, especially when the purchasing power of the individual falls short of one’s ‘expectations’. We need to have systems in place that guarantee consumer security and, at the same time, have purchaser education embed in public policy.
It is important that the State guarantees the necessary regulation for the protection of the consumer. Good corporate governance and sustainable development at the macro level are as important as the promotion of ethical financing. We also need sustainable land and water management, food production and supporting farmers who are hardly represented within civil society. The country will benefit incalculably through the promotion of a solidarity-based economy, cooperative societies and social enterprise.
Malta’s main resource remains the individual and one’s sense of community. Particular emphasis needs to be laid on continuous professional development of the work force, fair and just rewards, making work pay and a safety net that offers security.
Economic policy needs to serve this resolve. It has to be framed within a strategy of just distribution of social and economic capital with a vibrant commitment towards the abolition of poverty and social exclusion.
The economic debate lies closely within a social policy discourse that ensures industry and services, production and consumerism are closely affianced within a scenario of mutual respect between citizens, regard towards our communities and reverence to the environment.
We need to be particularly vigilant of the differences developing between the different social classes and groups in our communities. If the economy and social policy are rooted with each other they will most certainly bridge the social fissures becoming too common and customary a sight.
Andrew Azzopardi is senior lecturer at the University’s Department of Youth and Community Studies