Economic growth can only be considered growth if it is sustainable and if it helps improve the lives of all, Nationalist Party deputy leader Mario de Marco said during the launch of the party’s pre-Budget document yesterday.
Entitled ‘Sustainable Growth and Dignity for All’, the document makes proposals for specific economic sectors and raises questions for the government to address.
This is the first time that a document of this sort has been presented by a party in Opposition, which stressed that its aim was to promote healthy debate.
“The Opposition has long been calling for a frank and open discussion about the state of the economy and of public finances. Yet the government is keener to focus on those areas of the economy performing well and is ignoring areas of concern. The Opposition is duty bound to flag these issues,” Dr de Marco said.
He raised concern over the increase in the public sector payroll while the level of service of government departments and agencies was deteriorating.
He pointed out that the national debt had increased by €500 million even though the government had failed to launch a single new major capital project.
Dr de Marco also underlined the need for good governance.
Acknowledging that the economy was doing well, the PN questioned whether this could be sustained because it was being fuelled by increased government expenditure. The distribution of wealth was also of concern since the number of people at risk of poverty had increased to 100,000 despite the economy doing well.
“The measure of our success is how it improves our quality of life,” Dr de Marco stressed.
The PN deputy leader also pointed to what he said was a lack of transparency that was preventing public scrutiny and limiting the Opposition’s ability to properly analyse situations because it did not have the full picture.
“A number of important agreements signed by the government which have far-reaching consequences are being kept hidden from public scrutiny, contrary to the promise made by the Labour Party before the election,” he said, adding that a lack of good governance had an economic and political cost.
Economy shadow minister Claudio Grech said the document reaffirmed the Opposition’s proactive approach towards fiscal and economic policy. The party had taken the unprecedented step of contributing to the shaping of the budgetary framework.
“The economy we want to create is one that serves the people,” Dr Grech said.
The government is keener to focus on those areas of the economy performing well and is ignoring areas of concern
The party’s proposals were immediately shot down by the government in a statement issued within an hour of the document’s presentation.
Branding the PN as “negative”, it said the document was critical even on sectors where the government was doing well, such as economic growth and job creation.
It said the proposal on second pillar pensions would mean raising social security contributions for workers and employers, harming competitiveness and disposable income. Instead, the government was seeking reform which would not raise costs but leave pensioners better off. On a PN proposal to reduce fuel prices, the government said prices had been reduced several times and this would continue within a context of stability. However, it could not see how a cut in fuel prices would improve the traffic situation.
Addressing the PN’s proposal to reinstate the VAT exemption for self-employed earning less than €7,000, the government said it was never removed.
How Opposition sees economy
• Over the last 10 years GDP growth has exceeded the EU average but this was partly fuelled by higher government expenditure, raising concerns over its sustainability.
• 6,000 people joined the public sector in the last two years when the government had made a commitment to the EU that it would reduce the number by 500 per year.
• €100 million of government income this year came from one-off events (EU grants and payments due to Enemalta) while recurrent public expenditure is increasing partly due to the increase in public sector wages.
• The number of people at risk of poverty increased in the past two years, reaching 100,000 (official data).
• New economic sectors are needed.
• National debt increased by €500 million in two years.
Some of the PN’s proposals
Energy: Further reduce the price of energy tariffs, as well as of petrol and diesel.
Tourism: As it continues to grow, study the country’s maximum carrying capacity and develop a strategy for the way forward – tourism has to go beyond figures.
SMEs: Improve access to finance, especially for start-ups, and reinstate the VAT exemption for self-employed earning less than €7,000.
Financial services: Strengthen efforts to achieve a balance between flexibility and robustness and look for growth beyond Europe.
Construction: Encourage the industry to take on more restoration, regeneration and rehabilitation projects
Green economy: Reverse decision to use land Outside Development Zones for a new university; if public ODZ land is considered for development, it should be given an economic value at least equal to the value of land in prime development zones, and reverse the process of “uglification”.
Pensions: Ensure adequacy of pensions and their sustainability, and seriously consider second pillar pensions (pensions paid from compulsory contributions by employees and employers into a pension fund).
Poverty: Introduce incentives to improve competitiveness by using EU funds to help industries such as manufacturing, wholesale and retail, accommodation and food services and construction industry to help improve workforce earnings.
Traffic: Subsidise transport for all students attending Church and independent schools, ensure better planning with road works and address efficiency.
Healthcare: Prioritise Obesity Bill presented by the Opposition, increase collaboration with NGOs in the health sector and put cancer treatment high on the agenda.
Good governance: Increase resources for police and the Auditor General’s office, and strengthen the parliamentary institution.