[WATCH] Export sector remains social partners' major concern, MCESD consultant says

Social partners submit 450 proposals in pre-budget feedback

In the runup to Budget 2016, social partners submitted a total of 450 proposals and suggestions. While praising the country's economic growth and low unemployment rate, the social partners however expressed their concern over the exports sector.

The Malta Council for Economic and Social Dialogue met this morning to discuss the proposals submitted by the unions and organisations. Professor Joseph Falzon, consultant to the Council, said the unions had come up with very good suggestions and also suggested a two-day seminar to discuss their ideas.

Summarizing their feedback, Falzon said the social partners all agreed that Malta's economy was doing well, deficit was under control and there was a low unemployment rate. However, the social partners said there was an urgent need to address current and inherent problems in the export sector - the "engine of our economy".

"It's useless having a nice car with leather seats if the engine is not good," a Falzon said. "Exports are the real engine of growth."

Falzon said that growth in tourism was being attributed to growth in numbers, when it should be quality-driven.

The financial services sector was facing the threat of tax harmonization by the EU and, to keep it alive, there needed to be a plan to make this sector of higher added value.

"We need a coordinated plan for the exports sector," Falzon said.

Dubbing them "dragons", Falzon said the economy faced a number of problems that have even there for years.

"We lack skilled workers and we lack adequate education. Our education has failed our students and this is clear," Falzon said, adding that this was causing a two-tier economy.

"The second dragon is energy cost and there are calls by several partners to further reduce bills in the short-term and a call to reduce energy costs in the long-term."

Social partners spoke of Malta having the fifth highest cost of finance while government services remained inefficient.

"Traffic and pensions are also of concern," he added.

In a preliminary comment, Finance Minister Edward Scicluna said the government's vision and targets for the country were becoming more ambitious.

"While deficit is going down, we are more restricted in our choices. Every measure must be accounted for. Some might say that the IIP could be an exit route. The budget is not dependent on the IIP and we have to ensure that the budget is sustainable on its own," Scicluna said.

30% of the income from the citizenship-by-investment programme will go into the budget.