(Adds Opposition leader's address)
Small businesses will be benefiting from a €15 million first-loss portfolio guarantee.
This essentially means that the government would cover losses suffered by banks when dealing with these companies, deputy Prime Minister Louis Grech announced.
He said that more details about this guarantee would be announced over the coming days. It would be offered to commercial banks and followed an EU initiative to be first implemented by Malta and Spain.
Mr Grech was speaking during a Malta Council for Economic and Social Development conference at the Dolmen Hotel in Qawra that dealt with competitiveness and social inclusion.
He spoke about the need to further fight bureaucracy that was impacting competitiveness.
In his closing speech, Mr Grech also spoke about the suffering caused around the world due to the economic situation and added that, perhaps, it was time to review certain state aid rules.
He said he believed there was an inextricable link between competitiveness and social inclusion. This was a point also made by Opposition leader Simon Busuttil who said a thriving economy should be there for the people.
"The vision of the Opposition is to work together to see what type of economy is needed in the next 10 to 20 years and to ensure that this economy is a tree everyone gets to eat from," he said.
Mr Grech spoke about the importance of addressing cash flow problems to encourage investment.
Speaking about the Employment and Training Corporation, he said it had many good schemes and was doing a good job but more needed to be done to identify those people who were being excluded and draw up a tailor-made programmes for them.
Efforts were also needed to encourage people who reached retirement age to continue working and to address the low pensions.
OPPOSITION LEADER OUTLINES PN'S VISION FOR THE ECONOMY
The meeting was also addressed by Opposition leader Simon Busuttil who said that in the last seven years, Malta proved resilient in front of the most serious economic recession since the beginning of the last century.
This was due to the diversification of its economy, a prudent banking sector and the previous administration’s surgical approach in tackling badly-affected industries.
Dr Busuttil said that what needed to be stressed now was how could Malta reap further success from a recovery in global demand, strengthening its competitive edge and social inclusion.
Direction and incentives from the government were required to help facilitate further steps in the country’s continuing transition to be a centre of excellence in high value-added sectors.
The government, he said, could not passively expect the private sector to go it all alone and needed to do much more to facilitate Malta’s future economic success.
Dr Busuttil highlighted a number of issues of concern including public sector employment which in December grew at a faster rate than that in the private sector, stagnating wages, lower productivity and competitiveness and higher than warranted utility rates and fuel prices.
The Opposition, Dr Busuttil said, was willing to contribute to a reinvigorated national vision for the economy. The necessary direction the country should look at in enhancing its economic competitiveness called for a revamp of the national economic and social strategy that would shape Malta’s economic and social performance in the longer term over the next 10 to 15 years.
“This vision should be centred around attracting innovative foreign direct investment in high value added activities, together with discovering and expanding on new niches, fostered by ongoing investment in education of higher quality, together with a highly skilled and flexible workforce.
“There are certainly niches where Malta enjoys high comparative advantage. Sectors like innovative computer games, logisitics, maritime operations and exporting professional services are just a few,” he said.
Another mainstay of the PN’s vision was addressing costs for industry. The private sector, he said, urgently needed stimulus by being offered an environment characterised by easy, flexible and competitive access to financing, especially to SMEs, both by innovative players and properly developed financial instruments.
The present conditions of bank loan financing, he said, were unsatisfactory or worse if the status quo was retained.
“We want to achieve and guarantee a successful future for current and future generations. In this light, the economy and environmental preservation do not exclude one another. Enhancing our environment can, and should, be a source of economic growth.
“I would like to reiterate here that the current controversy about the development of a large tract of land outside the designated development zone is not about inward investment or the higher standards of education we all wish for our students and workers, but about preserving Malta’s long-term environmental attractiveness and quality of life while improving our educational standards,” he said.
Dr Busuttil also said that Gozo, a precious resource for the nation, was at the heart of the Opposition’s proposed vision.
“The holistic strategy of transforming Gozo to an eco-island remains our vision. Every decision and action will have to be evaluated on the basis of four main priority areas: the economy, the environment, society and Gozo’s identity.
A challenging commitment aimed at making Gozo’s economic development drive and be, in turn, driven by Gozo’s environmental protection. This ‘sustainable model’ would prioritise Gozo’s agro-cultural sector, domestic and foreign tourism, and a knowledge-based industry.
Wealth, Dr Busuttil said, had to be Let created before it was distributed as this was the only way social wellbeing could be sustainably improved.
The Opposition, he said, subscribed to the European Social Model putting people at the centre of communities.
The Nationalist Party was rethinking its economic and social policies and seeking to map out the way traditional sectors would blend with the new sectors to form a vibrant future-proof economy and industry while creating a fair and egalitarian society.