Aaron Farrugia, Parliamentary Secretary for European Funds and Social Dialogue
When this government came to office in 2013, one of the immediate actions of my colleague Edward Scicluna was to unshackle Malta out of the “excessive deficit procedure” imposed on us by the European Commission the previous year. This was a government priority. We were determined that Malta needed to avoid the situation some member states were faced with, severe spending restrictions and the effective loss of sovereignty and control by the national authorities on important decisions needed to be taken for a country’s well-being.
This government has always been fully committed to safeguarding Malta’s fiscal sovereignty as a lever to stimulate economic growth, reduce government debt and delivering a budget surplus year on year. We have achieved these targets for the last three years and will continue to do so in the coming years.
Another priority has been to generate enough wealth to create job opportunities not only for our citizens but also for other individuals who want to come to our country and work here. In this regard, the government is exceeding targets and expectations.
We now have full employment; by attracting foreign workers, we are sustaining our position as one of Europe’s fastest growing economies with annual growth of more than five per cent.
The benefits of a booming economy are being felt, and we must leave no one behind. The significant reduction of those at risk of poverty issomething I am incredibly proud of. The quality of life for Maltese people is improving.
We now face new challenges brought about by our economic success, and we must be ready to meet them head-on. Improving road infrastructure and the availability of affordable housing are two big examples.
This year we have embarked on a massive seven-year plan, whereby we will be rebuilding the entire road network of the islands. We are moving ahead within the stipulated timeframes and the visible improvements on our roads are there for all to see.
We will bring forward proposals to help deal with the housing challenge in the coming budget, unveiling concrete initiatives to address the issues we face. However, it is important not to blow a problem out of proportion. Malta is fortunate that close to 80 per cent of our households are property owned. We have to make sure we introduce initiatives to make housing affordable for those 20 per cent of the population.
This government’s overarching priority is to keep building an economy that works for the many, not the few; to ensure that the wealth being generated is distributed fairly and in particular to those who are most in need. The forthcoming budget will continue do just that. It will be a budget for pensioners, the disabled, low-wage earners and the middle classes.
Mario de Marco, shadow minister for finance
The Nationalist Party has published its pre-Budget document entitled ‘An economy by the people, for the people’. In this document, we made our assessment of the country’s economic and financial performance. We also listed suggestions and proposals the government can consider in the upcoming Budget.
In a nutshell, the document says two things.
Firstly, we need an economy by the people, an economy that grows through our collective contribution. The government is pursuing an economic model that is based on population growth. This is not sustainable in the long-run. We are already a heavily densely populated island. Our infrastructure is suffering and the price of essential goods, including accommodation, is skyrocketing.
We need to grow our economy by enabling those who live in Malta to increase their contribution not least by ensuring that our education system brings out the very best from each and every one of us. We want an economy that is competitive and based on high value-added jobs rather than cheap labour that, sadly, is increasingly becoming the case in some industries.
Secondly, our economy has to be for the people, which means the benefits of economic growth needs to cascade throughout society in a fair and equitable manner. This is not the case. Sections of society, including pensioners and low- and middle-income earners, are finding it impossible to make ends meet. We also need to think of future generations. What kind of future are we building for them?
Broadly speaking these are the main considerations we focused on when coming up with our proposals, some of which are listed below.
Clustering our economic sectors to increase our competitive advantage in key economic sectors.
A study on the revision of the individual income tax rate.
If the government is projecting a period of Budget surplus, then it should ring-fence some of the savings and spend them on long-term investments.
Invest in skills that are not necessarily university-based, particularly trades.
Give incentives to highly-qualified foreign personnel working in Malta to share their knowledge and experience with the locals.
The government should increase the number of beds in residential homes.
Introduction of lower energy tariffs for pensioners.
Incentivise our elderly to continue contributing to the country, while, at the same time, enjoying their hard-earned retirement.
Assess the impact the introduction of a second pillar pension would have.
Local councils should be given a more prominent role in administering social affairs within their locality. The government should ensure local councils are better staffed with more professional employees.
It should set up a task force to combat domestic violence.
The Opposition is calling for a sensible and planned approach to development, including high-rise development.
The first-time buyers scheme should be retained for another year.
Marlene Farrugia, Democratic Party MP
The economy might be growing but so is the divide between the materially wealthy and those deprived. This Budget should address this fast-developing new reality directly.
The spending power of people must increase, so if salary hikes cannot happen because of competitivity and sustainability issues, then the main salary guzzlers have to be addressed for immediate relief and future hope of improvement.
‘A room of one’s own’ is key to a human being’s full development. Housing is proving to be the biggest issue for many. Longer contracts as suggested in the recently-published White Paper will not solve the affordability issues of those who cannot meet the costs of the high rent in the first place. Longer contracts of high rents will not allow room for individuals to ultimately save and start their own climb up the property ladder. Protracted renting at high levels perpetuates a hand-to-mouth stressful existence.
The Democratic Party insists the government should either guarantee interest-free loans (for a number of years) or that first-time buyers can purchase so their loan repayment goes towards building capital. Should they sell at a profit before a stipulated time, they can pay off the government plus a minimum established fee to replace the government’s ‘lost’ interest. That way, people with zero capital will have an opportunity to ultimately own their own home.
Rent-to-buy schemes can serve a similar function. The government can acquire properties, which it can rent out, the difference being that the tenant is each month building equity.
Malta is choking in traffic. While other land-rich cities like Madrid are reducing car lanes, Malta is increasing them.
This Budget should address the huge infra-structural deficit that will compromise our economic growth.
The punctual efficient underground system that serves each town and village and that slashes the need for car use should be made a reality. With the critical mass of the population approaching big underground project viable levels (population soon reaching 700,000), this Budget should give a clear plan in this direction. It should also specify the cut-off date for the importation of fossil-fuel-fired cars and full transition to electric car use, freeing village cores from traffic, freeing bus lanes for punctuality and making cycle lanes continuous and safe.
Law and order is the other thorny issue worrying many. An effective, political partisanship allergic law and order force can materialise in the future if we start sending students in the field to do their entire training abroad (Denmark, France, The Netherlands) from now.
This Budget needs to invest in improving what we have now but the solution is to build an impartial, respected law and order force from scratch.
If you would like to put any questions to the parties in Parliament send an e-mail marked clearly Question Time to editor@timesofmalta.com.
This is a Times of Malta print opinion piece