In our preliminary reaction, as a Chamber we welcomed the Budget for 2019 as a positive one in so much that it did not surprise our entrepreneurs with new burdens, and refrained from introducing new taxes. However, the budget, which is being proposed at a time of unprecedented GDP growth in the country, did not seem to give a long-term direction in terms of how Government intends to consolidate this prosperity, through incentives for businesses at a micro level to ensure continuous economic growth.
As a Chamber, we believe that Government should start approaching the Budget from a multi-annual perspective. This would entail planning well ahead on what is required in the medium to long term rather than looking at the budget as purely an annual fiscal exercise. Such an outlook would equip our business leaders with the necessary information to plan ahead. When Government last year announced a seven-year investment plan on our roads network, the relevant business sectors geared-up and planned their strategies for growth accordingly. We wish to see more of this approach applied on a wider scale.
The Chamber welcomed the favourable economic results achieved. In our pre-budget recommendations, we reiterated the need to keep the country’s public finances in check. The economic performances and the standings of public finances have been notably positive in recent years, however, within the next few years, we feel that certain sources of public revenue may not remain reliable and sustainable revenue sources. It seems that Government is taking heed of the Chamber’s constant recommendations in this respect, as this bill of good health is not overly reliant on the revenues from the IIP scheme.
In this context the Chamber must once again call on Government to invest the proceeds of existing revenue streams in order to foster a more sustainable economic model for Malta – one that is not overly reliant on the constant attraction of foreign assets and resources.
Focusing on more domestic matters, we welcomed measures aimed at promoting fair enforcement, the promotion of new emerging segments in the economy such as the establishment of Tech.mt and the strong focus on pensions.
One disappointing feature in the announced budget revolves around the Manufacturing sector which we feel deserved a stronger focus. Constant improvements in export competitiveness factors is of crucial importance to industry, for which the Chamber is constantly advocating. It is clear from the data published that industry requires more attention, especially within the context of its 2018 gross value added which registered an overall significant decline compared to 2017. The Chamber is a strong believer in Manufacturing and believes that with further assistance to help increase value, and lower operating costs, the country can manage to scale up some of these companies in the value chain.
Unfortunately this budget also falls short of addressing a crucial issue which the Chamber has been very vociferous about in the past years. In fact, sadly, very little of the practical recommendations we presented to the Ministry of Finance to address the issue of lack of human resources in Malta, were taken on board.
Although our recommendations in favour of reducing early school leavers, and others conducive to active ageing amongst public-sector employees were featured, others such as strengthening Identity Malta with more resources to deal with increased volume of permits; organising a marketing campaign promoting living and employment in Malta targeted at selected EU markets which have a surplus of skilled workers; creating a public campaign highlighting the valuable contributions that older workers provide as mentors and role models to the many younger employees; and extending types of work-based learning across all the post-secondary and tertiary level educational institutes, were not.
The Chamber has also suggested that the National Skills Council ought to be re-dimensioned to focus solely on skills forecasting needed by Industry in the years to come.
In conclusion, the Chamber reiterates that a thorough impact assessment of the country’s ongoing growth should be initiated with a view to set sustainable targets for maximum carrying capacities and output levels, in the country’s economic segments. This study would further recommend a way forward towards reaching the set output levels and maximising returns with the highest efficiency of resources. Once this analysis is concluded, a national debate on a new long-term economic, societal and environmental master plan for the country post 2020 would be in order.