Finance Minister Tonio Fenech has set up a task force to focus on the challenges facing industry as a result of today's global economic climate and to coordinate ways of helping this sector.
The setting up of this task force, which is chaired by Mr Fenech, comes in the wake of calls by the private sector for the government to introduce a stimulus package to kick start the economy and the announcement by STMicroelectronics that it intends to shed 450 jobs at its Malta plant this year.
Mr Fenech was lukewarm in his response to some of the proposals by the Chamber of Commerce and Industry and the Employers' Association for an economic stimulus package. He told The Times Business: "A stimulus package in the form of increasing demand will have little impact for the STs and the other manufacturing concerns, since these are primarily export oriented and therefore no impetus from our end will generate external demand".
He added: "To address these challenges I have specifically set up an internal task force which encompasses the key organisations that relate to industry to ensure a speedy coordination and response.
"The role of the task force is to meet the industry that is being impacted and seek to support as best we can their plans, including further investment opportunities, and other support measures that could be needed in these circumstances. In doing so we are considering extending our support measures and also tailoring some specifically to the needs of the present circumstances," he said.
Mr Fenech said that the newly-appointed executive chairman of Malta Enterprise, Alan Camilleri (see story on page 3) is a member of the task force and would play an important role in identifying the individual needs of industry.
The Finance Minister said the task force for industry would adopt a micro approach and tailor-made solutions would be proposed for individual companies that need help. He said now was the time for investment and the upgrading of technology so as to be in a better position when the international economic situation improves. "2009 should be the year for investment", he said.
Mr Fenech said that the situation in those countries which introduced economic stimulus packages was very different to the situation in Malta.
"Clearly the economy at large is still in a reasonably good shape, in terms of general economic activity, unemployment levels still low, and notice of redundancies limited, with even the employment levels reductions announced by ST within manageable reach.
"The government should not allow itself to fall into the trap of mirroring the difficulties in one particular sector on the whole economy which today is significantly well diversified and able to take an amount of stress without necessarily falling into a crises," he said.
He added that the Maltese economy was still showing signs of growth and credit was still widely available "unlike in many other countries".
Mr Fenech said that the two sectors affected, industry and tourism, are being closely monitored, addressed "and where possible supported, and this we intend to continue doing".
He told The Times Business that the government had already presented a stimulus package in the budget for 2009 which the EU Commission valued at 1.7 per cent of GDP in terms of impact.
"This is primarily focused on a high investment programme in various sectors of the economy to the tune of €300 million. The package we presented included higher investment in marketing to address the challenges we are facing in the tourism sector; €20 million in specific schemes for industry, €30 million in projects and initiatives relating to renewable energy and the rest in capital projects and also further income tax reductions," he said.
Mr Fenech said it was imperative that the measures announced in the budget are implemented as quickly and efficiently as possible. He said he agreed with the private sector's demands that EU-funded projects in Malta should be speeded up as much as possible.
Asked if the government would stick to its 2009 deficit target of 1.6 per cent - the European Commission had forecast a deficit for Malta of 2.6 per cent - Mr Fenech said: "The Commission forecast came after deterioration in the global economic situation. Let me stress that despite the economic climate it is still imperative to aim at sustainable public finances and this is also the opinion of the European Commission and the European Council."
The setting up of this task force, which is chaired by Mr Fenech, comes in the wake of calls by the private sector for the government to introduce a stimulus package to kick start the economy and the announcement by STMicroelectronics that it intends to shed 450 jobs at its Malta plant this year.
Mr Fenech was lukewarm in his response to some of the proposals by the Chamber of Commerce and Industry and the Employers' Association for an economic stimulus package. He told The Times Business: "A stimulus package in the form of increasing demand will have little impact for the STs and the other manufacturing concerns, since these are primarily export oriented and therefore no impetus from our end will generate external demand".
He added: "To address these challenges I have specifically set up an internal task force which encompasses the key organisations that relate to industry to ensure a speedy coordination and response.
"The role of the task force is to meet the industry that is being impacted and seek to support as best we can their plans, including further investment opportunities, and other support measures that could be needed in these circumstances. In doing so we are considering extending our support measures and also tailoring some specifically to the needs of the present circumstances," he said.
Mr Fenech said that the newly-appointed executive chairman of Malta Enterprise, Alan Camilleri (see story on page 3) is a member of the task force and would play an important role in identifying the individual needs of industry.
The Finance Minister said the task force for industry would adopt a micro approach and tailor-made solutions would be proposed for individual companies that need help. He said now was the time for investment and the upgrading of technology so as to be in a better position when the international economic situation improves. "2009 should be the year for investment", he said.
Mr Fenech said that the situation in those countries which introduced economic stimulus packages was very different to the situation in Malta.
"Clearly the economy at large is still in a reasonably good shape, in terms of general economic activity, unemployment levels still low, and notice of redundancies limited, with even the employment levels reductions announced by ST within manageable reach.
"The government should not allow itself to fall into the trap of mirroring the difficulties in one particular sector on the whole economy which today is significantly well diversified and able to take an amount of stress without necessarily falling into a crises," he said.
He added that the Maltese economy was still showing signs of growth and credit was still widely available "unlike in many other countries".
Mr Fenech said that the two sectors affected, industry and tourism, are being closely monitored, addressed "and where possible supported, and this we intend to continue doing".
He told The Times Business that the government had already presented a stimulus package in the budget for 2009 which the EU Commission valued at 1.7 per cent of GDP in terms of impact.
"This is primarily focused on a high investment programme in various sectors of the economy to the tune of €300 million. The package we presented included higher investment in marketing to address the challenges we are facing in the tourism sector; €20 million in specific schemes for industry, €30 million in projects and initiatives relating to renewable energy and the rest in capital projects and also further income tax reductions," he said.
Mr Fenech said it was imperative that the measures announced in the budget are implemented as quickly and efficiently as possible. He said he agreed with the private sector's demands that EU-funded projects in Malta should be speeded up as much as possible.
Asked if the government would stick to its 2009 deficit target of 1.6 per cent - the European Commission had forecast a deficit for Malta of 2.6 per cent - Mr Fenech said: "The Commission forecast came after deterioration in the global economic situation. Let me stress that despite the economic climate it is still imperative to aim at sustainable public finances and this is also the opinion of the European Commission and the European Council."