Business breakfast meetings are not renowned to serve healthy diet food, but they can at times offer good economic diets that should make the nation more prosperous. The pre-Budget breakfast meeting organised by the Minister of Finance was a sobering reminder of what still needs to be done to put the state of our economy on a sound basis.

Edward Scicluna did not mince his words when defining his priorities for the next Budget. The Government’s intention is to ensure stability following almost two years of electioneering that sapped the nation of the feel-good factor that is needed to promote economic growth. This has now been achieved, but what remains to be done is much more challenging.

The public sector needs to reform itself completely if we are to deliver what we promise in education, health and other public services that contribute to the quality of life that people rightly expect after quite a few years of membership of the EU.

How can we pride ourselves with having a free medical service from the cradle to the grave when the reality that many families are experiencing is long waiting lists for life-saving surgery? How can we boast of a free education system when so many of our young people are leaving school with no qualifications?

The Minister of Finance made it clear that, unless the public sector is reformed to improve its productivity and the service that it gives to the people, we will be living a lie about how free our public services are. Reforming the public service is a daunting task as there are many sacred political cows that refuse to be moved from their comfort zones. But move they must, if we are to modernise the nation.

Another sensitive issue that Prof. Scicluna touched upon was the pensions’ reform. The introduction of the Third Pillar of voluntary savings that will be granted fiscal incentives will be a step in the right direction, but it will hardly benefit those who are most in need of saving for their retirement. Even if this may not be the right time to introduce mandatory savings for retirement, we have to realise that we have to act on this front as we cannot postpone this issue forever.

The EU’s insistence that we should get to grips with our low educational achievement problem remains unaddressed. Many young people are entering the labour market with a big handicap because they lack experience, relevant qualifications and often even basic language and numeric skills. Our economy just cannot grow sufficiently well unless we resolve this problem.

The way ahead is tough and full of obstacles, but it will certainly lead us to a healthier state of the nation

The projections of economic growth for 2014 remain subdued. This is partly due to the adverse economic climate in the markets we serve, but partly also the result of lack of productive investment in our economy over the past decade. As one would have expected from a seasoned economist, Prof. Scicluna explained the big difference between financial investment and productive economic investment. We need more of the latter if we are to reach our ambition of matching the EU standard of living average.

Attracting more women to join the labour force has been the search for the holy grail of the previous administration. Some success has been achieved. We need to build on this. It seems that the promise for free childcare facilities will become a reality relatively soon. This will be a great incentive for more women to go back to the workplace.

The cost of energy remains a sore issue that is pushing down our productivity and competitiveness, besides draining hard-earned cash from the pockets of common people. If during the coming months the promise to reduce energy tariffs turns into reality, then we can all have good reason to hope for a better 2014.

The tragic way in which fuel procurement was made in the last decade will remain a classic example of how to destroy the growth potential of a country with limited resources.

One certainty that we have to manage in 2014 is the increasing scrutiny of the European Commission on our public finances. The steps announced by Prof. Scicluna to make economic forecasts and metrics more credible are inevitable if we want to strengthen the nation’s economy.

The minister spoke clearly while avoiding to resort to political skirmishes. The way ahead is tough and full of obstacles, but it will certainly lead us to a healthier state of the nation.

johncassarwhite@yahoo.com

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