The latest unemployment statistics issued by the NSO saw unemployment in July increase by 600 compared to July 2012, a staggering 9.7 per cent. This is summer, when unemployment should fall, but nobody seems to be worrying, especially this Government.
In the past six months, Finance Minister Edward Scicluna’s Budget speech and the Pre-Budget document had no mention of job creation. We were given a very high-level economic lecture, but nothing about how this Government intends to create economic opportunities, incentivise investment and create enough new jobs.
When asked in a recent discussion programme on One TV how this Government intended to create new jobs, Economy Minister Chris Cardona waffled about how the Government is not there to create jobs but merely not stand in the way of the private sector initiatives that may create jobs. With such little effort from this Government, unemployment will only increase.
The Pre-Budget document authored by the Minister of Finance once again gives an impressive certificate of the economic achievements attained by the previous Nationalist administration over the past 10 years but says very little of the future plans in terms of wealth and job creation that are paramount to continue sustaining education, health and our social obligations.
The Pre-Budget document highlights the competitive gains that Malta made over the past 10 years where Malta also started to have a trade surplus in the latter years, maintaining our international market share in the manufacturing sector and increasing our international market share in the services sector.
In its industry-based evaluation on page 30, it states: “One notes that three-quarters of industry’s gross value added in Malta is generated by fast-growing industries on the international markets. More than half of total gross value added is concentrated in fast-growing industries in which Malta had additionally gained a competitive advantage relative to their EU counterparts.”
It further states: “Indeed, from an economic sector perspective, one may conclude that during the 10-year period under analysis (with the PN in government) Malta has gained a European competitive advantage in the fast-growing sectors of pharmaceuticals, financial services and online gaming, gained also in agriculture and fishing, printing, manufacture of non-metallic minerals, manufacture of computer, electronic and optical equipment and furniture.”
Even in terms of Scicluna’s pet subject on the real effective exchange rate, the report states that between 2009 and 2012 this improved “by 4.8 per cent, supporting a strengthening of Malta’s competitiveness”. It adds: “Malta gained substantial export market shares in the services and maintained a stable share in total world exports of goods”. In terms of productivity and unit labour cost it states that “Malta continued to register competitive gains even during the recession”.
This is good, but what about how this Government intends to create enough jobs to prevent unemployment increasing, when month on month under the present Administration, unemployment has been on the rise?
It has now dawned on the Finance Minister that the world economy is still in crisis, when pre-election we seemed to be living in another world.
It has now dawned on the Finance Minister that the world economy is still in crisis
The signs of a slowdown are apparent to all, and will only worsen unless this Budget seriously addresses the needs of the economy. Despite having a Parliamentary Secretary for Economic Growth, the Pre-Budget document talks only about IMF and European Commission forecasts for growth, without this Government telling us what its targets are.
The only detailed section in the Pre-Budget document focuses on the establishment of a Fiscal Control Framework, a framework we are obliged to follow by the new EU Fiscal Pact rules.
They used to call me an accountant. Today the minister seems to have forgotten that the Budget is an economic document and not an accounting exercise. It was for this reason that in the previous legislature the Minister of Finance was also responsible for the economy, in contrast to this Government.
In this Government we have a minister who prides himself on being an economics professor who sees himself only responsible to balance the books and meet the deficit targets, and a Minister of the Economy who tells us that creating jobs is not in his hands. Job creation is falling between two stools.
I wonder how the various ministers will react when they discover that there is not enough money to sustain present programmes, let alone implement electoral pledges, such as paying police force overtime arrears or refunding VAT on imported second-hand vehicles.
Will the minister tell his colleagues he is sorry but they will have to make do with what they have been allocated?
Will he drastically cut costs, consequently grounding the economy, increasing hardship to the needy and increasing unemployment?
Will he increase taxation levels?
Or will he take no new economic growth initiatives needed to sustain our tourism product, industry and SMEs or incentivise new economic sectors like the creative economy, research and innovation, the green economy and other segments, initiatives and programmes that we are accustomed to seeing in recent budgets?
Dear minister, this country needs urgent action if this Government wants to make job creation its priority.
Let’s hope we hear something in the forthcoming Budget.
Tonio Fenech is the Nationalist Party’s spokesman on finance.