A drop in exports, imports and the retail trade should not be ignored by the government even if statistics showed economic growth and a drop in unemployment, the shadow minister for the economy warned yesterday.
Speaking in Parliament, Mario de Marco said that while exports amounted to €4 billion in 2012, the value dropped to €3.9 billion in 2013 and to €2.8 billion in the first nine months of this year.
Economic Services Minister Chris Cardona had blamed the decrease on one factory. However, the problem extended over a number of export sectors including IT, which recorded a slide of 24 per cent, pharmaceuticals (20 per cent) and printing (15 per cent).
The decline in exports had, in turn, led to a deterioration in employment and working hours of those engaged in the manufacturing sector.
The decline in exports has, in turn, led to a deterioration in employment
The hours worked in the IT sector were down by three per cent and those worked in the pharmaceutical sector dropped by six per cent. In the printing sector, employment was reduced by 12 per cent and working hours were cut by five per cent.
Dr de Marco said Malta Enterprise had to focus better on export market development.
The government could either ignore the facts and let companies drown or take urgent action to help them. Cutting utility tariffs was not enough.
The fall in the price of oil meant that other countries could reduce their prices, making Malta less competitive. The government should take all steps to ensure the island remained competitive.
The World Economic Forum’s Global Competitiveness Report placed Malta in 147th position, a drop of six places.
In an EU report, Malta placed in the last category, titled ‘Member States with modest and stagnating or declining competitiveness’. There was an eight per cent drop in imports in 2013 and 10 per cent in the first seven months of this year.
While other EU member states posted an increase in retail trade, Malta had experienced the highest reduction. The government argued this was because of internet shopping. Was not internet shopping also available in other EU member states, Dr de Marco asked.
Imposing tax on the local wine industry, without prior consultation, would make Malta less competitive.
The government imposed a new tax on fish farm food on the pretext of raising environmental awareness. What sort of environmental impact did fish farm food have?
The biggest concern, however, was the higher fees for government services, which would mean €500 million in taxes in 2015.
Dr de Marco criticised the government for not increasing the funds allocated to the Malta Tourism Authority.
There was only an increase of €1 million for new route development, but not for marketing purposes.
The Budget should give a sense of direction and the government should focus on how to diversify the economy in light of increased globalisation.
Yet the Budget for 2015 lacked measures to boost the creative economy.