The last decade has been characterised by a focus on fiscal rectitude as many EU countries struggled to control their public spending. On the other hand, Malta has been successful in reducing its fiscal deficit by promoting economic growth, and this has often exceeded the EU average.
As the government prepares to announce its budgetary plans for next year, it is important to identify the areas that need immediate attention in order to guarantee that the fiscal and economic success achieved in the past few years is underpinned by medium and long-term strategies for success of the socio-economic kind as well.
Minister of Finance Edward Scicluna has rightly remarked that the time is right to address quality-of-life issues in the next Budget to meet the aspirations of many who may now be taking economic growth for granted.
The Prime Minister has, for example, often remarked that the lack of infrastructural investment in the past several years needs to be addressed with robust plans to improve the economic and social infrastructure. Part of the price that Malta is paying for the substantial economic activity generated in recent years is traffic gridlock on our often inadequate road network.
The seven-year commitment to improve the roads now needs to be defined in more detail in a plan that identifies specific projects, the anticipated commencement and conclusion of each project, as well as the financing plan. Similarly, the public transport system is under great stress and needs to be revamped, or better still, reinvented. Only in this way can people believe that the government is serious about tackling the traffic problem.
In the tourism industry the number of visitors is constantly on the rise. This positive development is not without its collateral damage. Malta has a growing public cleanliness and waste management problem partly caused by its population density that balloons in the summer. Other factors that contribute to the waste mountain are a lack of civic pride, a laissez-faire attitude adopted by law enforcers who often turn a blind eye to abuse, and infrastructure that is inadequate to deal with the demands of keeping the place clean and managing our waste streams. The Magħtab landfill, for instance, is still billowing nasty fumes after years of promised proper management of this site.
The construction industry is among those going through a good phase, partly as a result of increasing demand for rental property to accommodate foreign workers being recruited by our tourism, financial services and gaming industries. This, however, has led to an escalation of property rent and purchase prices, making it almost impossible for many families to procure a residential property. At the same time, investment in social housing has been almost non-existent for at least a decade. This is destroying part of our social fabric.
The next Budget, and those after it, also need to review the short and medium-term planned construction projects and strike a balance in providing the right number of properties needed to achieve both social and economic objectives. And these projects must prioritise the protection of our natural environment that is quickly deteriorating as a result of overdevelopment.
Equally important is the reduction of noise and other forms of environmental pollution impacting the health of many and damaging the image of Malta in the eyes of locals and visitors. Enforcement of environmental laws and regulations must be strengthened if the government really does have the political will to improve the quality of life of people.
Perhaps the most challenging priority is providing the necessary human capital to support future economic growth. Malta is now heavily reliant on imported labour to satisfy the demands of industry and support economic growth. In the short term the demand for imported labour can be accommodated. But future socio-economic success depends on how successful our labour policies and education system are in offering quality jobs to our own people.
Economic growth has also resulted in a widening gap between the haves and have-nots in our society. The next Budget must start tackling this serious issue.