Finance Minister Edward Scicluna may have good grounds for arguing, as he did in Parliament, that “confidence indicators” are positive, but there is no denying that there are problem areas.

Exports and imports are down and unemployment is rising. It would be wrong if, riding high on the political success in the Euro-Parliamentary elections, the government were to play down the concerns being expressed by people in industry over what their representative organisation has called “unfavourable conditions” that are faced by industry today.

The deficit may have been brought down, but there is more for the government to think about and do to help in the country’s efforts to generate greater economic growth. The Chamber of Commerce, Enterprise and Industry has just come out with a comprehensive industrial policy that has put its finger right on what is troubling industry today: declining competitiveness, lower order books, declining business sentiment, and, also, loss of regional aid for large companies.

What the government needs to go into first is why business sentiment is declining. There must surely be a combination of factors for this, most of which could have been eroding industry’s competitiveness for a number of years. The Chamber has spoken about “unprecedented stiff competition” coming from countries that have gone through the difficulties of the economic crisis. It is arguing that countries such as Spain, Italy, Greece, Portugal and Ireland are now adjusting and shaping themselves and becoming more competitive in the process.

The implication is that Malta, which had managed to weather the financial storm and the recession that followed in the time of the Nationalist administration, is now finding it harder to compete with countries that had pulled up their socks, put their house in order, and are becoming more efficient. The Chamber is proposing no fewer than 63 recommendations to improve competitiveness, and, as expected, high on the list is a call for an urgent revision of the cost-of-living adjustment formula.

The government has kept the formula, known as COLA, on grounds that it has managed to keep industrial stability, arguing also it is a good mechanism to make up for inflation. But employers want the rise to be linked also to productivity, rather than inflation. The problem, a bone of contention among trade unions and employers, is bound to continue to put industry at a disadvantage when compared with the situation in industry in competing countries.

The controversy is likely to get more complicated if the government moves ahead with its plan to make employers pay a higher social security contribution for their employees in order to be able to fund the cost of maternity leave. When, as industry is saying, labour costs in this country are increasing at a faster rate as compared with those in the rest of Europe, attention ought to be focused on ways and means of reducing them, not going into the opposite direction.

In fact, the Chamber is asking the government to reduce the energy rates for industry now, not next year. Not only that, but they are arguing that the planned reduction of the tariffs by 25 per cent would not be enough to make up for the loss of the regional aid. In Malta, the electricity rate stands at 16c per unit, whereas in Tunisia, a competing country, it stands at just 6c.

There are many other matters that would need to be seen to if industry is to have any chance of growing.