Opposition leader Simon Busuttil this afternoon called for a smaller, more directional role for the government in business, and said it should not ignore warning lights which had lit up in a survey of Malta's investment attractiveness.
Speaking at a conference which discussed an investment attractiveness survey conducted by Ernst and Young, Dr Busuttil said the visions laid out for Malta 50 years ago with independence, and 10 years ago with EU accession, had served the country well. The vision for Malta 10 years ago was not narrowed to the EU. It was a global vision that used the EU as a platform to trade with the world.
Trade and investment had taken off, but the report showed some warning signs, such as a worrying increase in the number of 'don't know' among investors who were asked whether they would be here three years on, and the concerns of the manufacturing sector.
The future success of the country, he said, depended on how smart it was to update and revamp today an effective vision for tomorrow. Malta needed to have a vision which was outward looking and flexible to face the new challenges, with investment in education and worker-training remaining critical factors.
It was imperative that policy decisions were not centred on short-term benefits at the risk of jeopardising long-term sustainability, such as by excessive public sector growth.
Political maturity demanded vigilance over an economy which, according to indicators, was driven by domestic demand while reporting a below-par performance in exports and a sluggish manufacturing sector.
Dr Busutill said there was no justification for the mentality that the government had to be a big brother as a cost to taxpayers, posing a threat to financial stability.
He insisted that Malta should not budge an inch in EU efforts to bring in tax harmonisation. The tax regime was one of Malta's competitive advantages, he said. Even the states within the US did not have tax harmonisation. Why should the EU?
Turning to the role of the government, he said the administration needed to be re-dimensioned The government should play a more directional role to nourish business rather than being directly involved in it.
But the business sector should be less dependent on government-induced demand and protection.The private sector needed to take up a more central role in the economy, becoming more dynamic and export oriented with partnerships in Malta and abroad.
The Opposition leader underlined Malta's need for excellence in everything it did, and for a clearly communicated strategy that included a stronger focus on education and innovation which developed human resources to the maximum.
"The ingredients to continue to attract investment are there, but we need to build up and gear up for the next fifty years," Dr Busuttil concluded.