Kurt Sansone
The constant barrage by the GRTU and various economists that government lacks an economic policy has left its mark it seems, with the Prime Minister yesterday launching an 88-page document under the guise of a pre-budget discussion paper that outlines the administration’s vision for the next five years.
The document titled ‘A better quality of life: 2006-2010’ seeks to put the forthcoming budget within a wider context of a five year plan that has as its fulcrum “excellence” and a “better” quality of life.
Addressing a press briefing at Castille, Prime Minister Lawrence Gonzi under a banner with budget spelt bagit in phonetically correct Maltese, he said the document was a first of its kind because it outlined government’s vision for the next five years but his constant reference to the “myths” perpetuated by “opinion writers” and “columnists” gave the cat away as to what could have instigated yet another government sponsored plan.
“Statistics don’t lie,” Gonzi emphasised while giving a positive overview of the economy and hitting out at the “columnists” who have drawn up a rather bleak picture of the economy. The harshest criticism of government’s economic policy came from the former chairman of the MCESD, Prof. Edward Scicluna.
The Prime Minister yesterday said registered unemployment was down by 1,000 over a one year period and now represented one of the lowest figures in four years. “Given the restructuring that has been going on in government controlled entities and the pressure this creates on unemployment, the economy is nonetheless managing to generate jobs. Statistics speak for themselves,” Gonzi said.
He also mentioned income from VAT, which saw an increase of more than Lm3 million in the first quarter of the year. “This means that consumption is healthy contrary to the arguments made by opinion writers that people are not spending,” Gonzi exclaimed.
The Prime minister also sought to dismiss another “myth” about employment with the civil service by saying that the number of employees paid out of the public purse was at its lowest in years. “Those employed with Government represent 33 per cent of the gainfully occupied. Our strict controls on public service employment have paid off and we now have the lowest employment rate with government for the last 10 years,” Gonzi said.
“The deficit today is at better levels than last year and I am confident that we can reach the budget target (3.7 per cent) by year’s end,” Gonzi insisted.
Reforming taxation
The discussion document published yesterday steers clear from delving into the nitty gritty of what the budget will hold and in requesting feedback from the public government is hoping that “submissions from the public concerning the priorities set out by this document will be made with the longer term view at their centre.”
The most significant element in the document is government’s commitment to review the taxation system, even conceding that it could be wise to have a shift from direct taxation to environment-related taxation.
The document raises a number of issues such as whether taxation on small and medium enterprise should be on a lump sum tax basis in respect of business activity and whether a business should have an extension in the tax band linked to the number of persons employed.
It also speaks of incentives to stimulate the rental market by introducing the option of a flat rate tax on rental income for residential purposes and further simplification of tax-reporting requirements in order to mitigate the administrative burdens.
For this purpose, government will be setting up a task force with the specific aim to review the options outlined in the document and report to government by not later than June 2006.
Public service employment
The document says that in 2006 government will undertake a further review of its workforce, identifying the core competencies and staff requirements in its departments and entities. Surplus staff will then be attached to a surplus employment pool and provided re-training to fill skills gaps within both government and the private sector. Although the IPSL arrangement for extra employees pertaining to restructured government entities already acts as a surplus employment pool, the document says the next step has to address the disincentives that prevent people from moving into productive employment when this is made available.
To strengthen accountability and transparency in public administration, the document says that in 2006 government will issue a White Paper on freedom of information.
Enemalta privatisation
On privatisation, for the first time government will be considering whether it is feasible to privatise the energy generation and distribution functions of Enemalta as well as water production. The studies should be concluded in 2006.
By year’s end government should also issue the development brief for the proposed golf course in Ghajn Tuffieha.
The document also outlines plans for the “securitisation” of government owned property through the formation of a public company with public investment and run by the private sector. The MFSA is to conduct a study on the proposal to enable government make a decision by December this year.
The document also lists six tourism zones, none of which is to be found in the South, which will receive priority in embellishment work.
|
