We need to be ambitious for our country, if our society is to prosper. Soon we will know what the government’s plans are for the coming year. One hopes that issues on which our future prosperity depends are tackled with urgency.
The review of the economy’s performance in the last year is encouraging. Tourism has picked up, even if profitability continues to decline; GDP has grown and is now back to 2008 levels; unemployment has been contained, but our employment rate remains the lowest in the EU. The financial and e-gaming sectors continue to perform well, exports are again picking up, and Smart City is taking shape.
A review of our performance in the last decade is less encouraging. Our GDP per capita was 84 per cent of the EU average in 2000, but it fell to 78 per cent in 2009. Our employment rate was 57.2 per cent in 2000 and only increased to 58.8 per cent in 2009. Private investment by the private sector amounted to 13.3 per cent of GDP in 2000, but fell to 11.3 per cent in 2009. Our early school leavers’ record remains the worst in Europe, just as it was in 2000.
The coming budget will, for the first time, be scrutinised by EU officials “to detect any inconsistencies and emerging imbalances”. The Finance Minister has already ruled out any income tax cuts, as public finances still need to be improved before we can ease the taxation pressure on Maltese families. One can also rule out any drastic reductions in the public sector which employs about 28 per cent of workers. So, like many others, I do not expect any headline grabbing news about significant cuts in either tax or expenditure.
To have a realistic chance of getting anywhere near the EU 2020 targets, we must address the issue of job creation. We may have a relatively low unemployment rate, but our low employment rate is worrying. Fiscal measures to encourage employers to create new jobs; administrative measures to reduce the bureaucracy with which small businesses are burdened; and further reforms in VAT to encourage those who work in the black economy to join the official workforce can go a long way to address the problem of low employment.
Another qualitative measure that I would like to see is a more sincere commitment to empower female workers in the workplace. Married women caring for young children or elderly parents are still not being given sufficient support by their employers, including the government itself, to cope with their overwhelming family and work duties. This is more a question of attitude where employers must have the courage to be flexible, even if this means changing work rules to help female workers with onerous family obligations to continue functioning effectively in the workplace and at home.
I would also like to see reforms to improve the quality of the services offered to the public by state organisations. These organisations include government departments, local councils, corporations and their offshoots (like ARMS Ltd), polyclinics and hospitals. We are paying for the service, but we do not get the value for money we are entitled to. A reform in the way these organisations are managed is long overdue, especially since these public servants have a guarantee of a job-for-life that workers in the private sector do not.
Pensioners, and other groups facing poverty, also need to be supported more effectively. I fear that we will not see any effective effort to reform our health and pensions system as these issues are obviously hot potatoes that are best left to cool down before they are handled. But, in the meantime, many people are suffering in silence because they no longer have the power to help themselves.
Anything that threatens the economic recovery must be avoided. I would include as a threat, increases in wages in the public sector, unless it is linked to measurable productivity gains. However much a reduction in income tax this year or, more likely, in the coming two years would be welcomed by taxpayers, our priority should be the upgrading of our health, pensions and educational systems which continue to under-perform.
Our commitment to defend the quality of life of our families will be tested not so much by well meaning rhetoric, but by our concrete plans to define a long-term plan with identifiable milestones and binding targets that will help us catch up by 2020 with the EU average of indicators that define prosperity.
jcassarwhite@yahoo.com