"We Need To Have A Plan To Identify The Industries Of The Future" – Frank V. Farrugia

30th September 2017

The President of the Malta Chamber expressed his thoughts about Malta’s economic sustainability and how to fix Malta’s HR problems ahead of Budget 2018.

“Malta’s economy is doing remarkably well. This however burdens us with a great responsibility towards our future and what we want it to look like,” Frank V. Farrugia, President of the Malta Chamber told The Business Observer. “Once again the Malta Chamber is focusing its priorities on two over-arching goals which in the eyes of the Chamber determine the sustainability of the economy’s growth - exploiting the current positive standing of public finances to rectify structural issues that threaten long-term fiscal sustainability, whilst encouraging government to further enhance the factors that contribute to Malta’s competitiveness with emphasis on overcoming the severe labour shortages and modernising ageing infrastructure through sustainable long-term planning.”

“We need to look at the long term to fully cater for the sustainability of our sectors in order to safeguard their future. We also need to have a holistic strategic plan that will identify the industries of the future, such as Fintech and Blockchain that will sustain the growth of our economy in 10 or 15 years’ time.”

“Central to our pre-budget proposals, is our call for the government to revise the energy tariffs for businesses. In fact we once again highlighted how energy prices in Malta are 42 per cent higher than the EU average, which means the highest across Europe. This is according to the Eurostat latest report on the subject.  In this light, the Malta Chamber proposed a number of measures that would help businesses overcome the uncompetitive tariffs incurred, including an improved Night Tariff framework, purchasing flexibility as well as the introduction of privately managed energy distribution substations.”

“Labour market issues are also given a great deal of importance in our pre-budget document as we believe they are posing challenges to businesses in Malta and in turn to the sustainability of jobs.  While the Chamber expressed itself in favour of Active Labour Market Policies, it warned that continuous extensions to leave allowances, the potential introduction of parental sick leave and the compensation for public holidays falling on a weekend were considered a ‘grave concern’ which would only serve to further erode Malta’s competitiveness.”

“Malta’s favourable economic performance is commendable and the generation of a budget surplus immediately prompts a long wish-list of where these funds ought to be spent. It is most important that in any case, these funds are invested wisely rather than spent as these are the result of long years of sacrifices that the entire country has worked hard for. We need to make sure that the surplus is invested in what the country will need tomorrow, when we might not be experiencing such impressive growth trends.”

“With this in mind, we believe that we need to start looking seriously at our infrastructure which is growing dated by the year, and see how this can be updated. Our economy has grown impressively in the past years, and this has meant that we have had an influx of people who are exerting an unprecedented strain our infrastructure. We need to make sure that we have a road network that can support the country’s needs as transportation in a small island remains a grave concern. We need to invest in a proper integrated multi-modal transport system which will in theory reduce the number of private vehicles on the road.”

“Certainly the biggest challenge for our businesses will be the recruitment of human resources. The state of ‘full-employment’ has led Malta’s private sector to experience large difficulties to fill vacancies that arise in order to meet the demand for goods and services. We envisage that this labour gap, which exists both in terms of quantity and quality, is expected to persist well into 2018. The solution to this issue is multi-faceted.”

“In our pre-budget document we propose a number of measures to help alleviate this problem, amongst which a more efficient system to issue Work Permits for Foreigners, an Education Reform that better prepares students for the work market, tweaking the Stipends system to encourage students to take up careers that are more needed in today’s economy, more efficient Career Guidance coupled with hands-on Work-based Learning as well as a more competitive Night and Shift Workforce.”

“We, as a Chamber will continue to make a clear call for improvements on the achievements of recent years with an aim to overcome structural issues that threaten future sustainability. Overcoming these ingrained issues is the key to future proof the country and successfully endure eventual periods of downturn.”

“The sizeable mandate achieved by the present administration, coupled with the economic performances of recent years, result in an unrivalled opportunity for this legislature to seriously tackle issues that continue to pose a risk to the country’s long-term sustainability.”

An abridged version of this interview appeared in The Business Observer

8th October 2017

The 2018 Budget will be announced on Monday 9th October, with a livestream on Maltachamber.org.mt – here’s what to expect on the day.

7th October 2017

Shadow Minister for Finance and Deputy Leader for Party Affairs within the Nationalist Party Mario De Marco questions what Government is doing to ensure that our economy continues to evolve, and which new business sectors are being targeted to deliver economic growth in ten or fifteen years’ time.