Opposition deputy leader Mario de Marco this morning urged the government not to ignore consistent drops in exports, imports and retail trade, warning that although figures showed economic growth and a decline in employment, there would be problems in the future unless action was taken now.
Malta saw a 27 per cent drop in exports between January and June, the steepest in Europe.
This, he observed, came on top of a 12 per cent drop in exports last year, reversing what had been a practically consistent increase in exports in the previous years.
Speaking in Parliament during the Budget debate, Dr de Marco said that while he was not, for now, saying that the drop in exports was the government's fault, the worrying thing was that the government was giving the impression that nothing was wrong.
At one time, minister Chris Cardona had blamed the exports drop on one factory, when that was not the case. This was an problem which covered various exporting sectors including IT (down 24%) pharmaceuticals (down 20%) and printing (down 15%) and it was a problem which was showing up in the official statistics month after month. This deterioration in exports had in turn led to a deterioration in employment and the hours worked in the manufacturing sector.
Dr de Marco said Malta Enterprise needed to give a stronger focus to export market development. More assistance needed to be given to companies which wanted to export. Indeed, possibly a mistake was made in the past with the merger of Metco and the MDC, resulting in a greater focus on inward investment than exports.
Alas, no headway was being made on improving competitiveness. The Global Competitiveness Index showed a drop of some six places to 147 for Malta and an EU survey placed Malta in the category for 'countries with modest and stagnating or declining competitiveness'. Malta had also performed very badly in an EU survey on what was needed to start a business.
The drop in electricity costs for business was important, but it was not enough, Dr de Marco said. The international price of oil was falling for everyone, and competing countries would therefore also be expected to reduce their tariffs, which meant that Malta woudl not made a competitiveness gain. Furthermore, Malta was not reducing gas prices.
Malta also needed to safeguard its competitiveness in financial services and should continue to resist tax harmonisation initiatives within the EU.
Rather, than boosting competitiveness, budget measures raising taxes on the wine industry and fish farming, would undermine it. The government had also said it would raise fees for government services. Which services would these be?
Earlier, Dr de Marco produced figures to show that contrary to the government's claims, public service recruitment was up sharply under this government.
Under the former government, the number of state-employed workers had been in a consistent decline. But under the present administration, recruitment had spiked, to the extent that it was now, at 44,000, even higher than it was in 2006. In 2012 state workers totalled 40,000.
The prime minister had tried to ridicule the Opposition, describing it as amateur when it based its calculations, among other things, on the number of people who had retired. Dr Muscat had said fewer people had retired than the opposition claimed. Yet, Dr de Marco said, the Opposition got its figures from a document issued by the Ministry of Finance of the present government.
He said that it was not only exports were was declining, but also imports. In 2013 imports were down 8% and this year up to July then were down by 10%.
Retail trade in Malta had seen the steepest decline in the EU, at a time when trade in most of the EU was actually increasing. It was useless of the governemnt to blame internet shopping. The other EU countries also had internet shopping.
The Nationalist spokesman expressed concern that several measures announced in the last Budget had not been implemented, including measures to attract foreign direct investment. How many factories had been opened in the past year?
What progress had been reached on on the cruise liner terminal in Gozo, land reclamation, which possibly should not take place, the maritime hub and other promised projects?
On the granting of casino licences, Dr de Marco regretted ministerial intervention in this process. The minister had claimed there was conflict of interest and he therefore dissolved a technical board. But who had appointed this board and what was this conflict of interest?
Concluding, Dr de Marco said the Budget had failed to set direction and had not pointed to the areas of the economy targeted for growth now and in the future.