Budget debate | De Marco pinpoints absence of economic blueprint

As Parliament started debating the General Estimates from the 2014 Budget, the PN deputy leader for Parliamentary affairs Mario de Marco highlighted the absence of blueprint for the creation of jobs and new economic niches.

"We need to look beyond the established sectors such as tourism, manufacture, the maritime sector, financial services and gaming. The economy does not stand still, it is dynamic and I am worried at the lack of substance in the finance minister's budget speech and plans in regards to creating new economic niches."

De Marco asked what sectors Malta Enterprise was targeting and what was the agency's strategy in attracting new investment.

"This government has a responsibility to create an environment that stimulates job creation," the PN deputy leader said.

Reiterating that the budget delivered positive measures, de Marco insisted that the opposition was recognising the good measures and identifying the sectors which could be improved.

"Malta has performed a little economic miracle in recent years. While other countries and companies sank, Malta stayed afloat and performed well," he said.  

However, de Marco said that this was not down to politics but "the merit should go to investors and the business community who invested heavily."

Insisting that not everything revolves around the Labour government's plans to reduce energy tariffs, de Marco said that the Labour government should at least have the "political honesty" and recognise that the BWSC power plant which was constructed by the previous administration played an important role in driving the energy costs down by at least €50 million.

On the introduction of night tariffs, de Marco said that this was especially important for hotels and industries which work around the clock.

He added that irrespective of what auditing company KPMG said in the infamous email sent to the previous PN government, "it makes sense to introduce night tariffs for the benefit of our industries."

Conceding that the economy was not on the verge of collapsing, de Marco warned that the economy needs a hands-on approach because it was showing worrying signs.

Calling for a bi-partisan approach, de Marco said that both sides of the House have the same aims and both want the country's economy to flourish.

The former tourism minister also said that if things go as expected the tourism sector will keep growing and this was also down to the introduction of new Air Malta routes in the last 12 months.

Hitting out at the "patronising" speech by the Prime Minister Joseph Muscat, former finance minister Tonio Fenech said that the budget should also be judged on the figures in the estimates and not only on the words in the budget speech.

Describing the budget as a "bad accounting exercise," the opposition MP added that the finance minister Edward Scicluna should come clean on the conflicting information on the increase in car licenses.

Insisting that the 2014 Budget lacked a clear economic strategy, Fenech said that new government had the added advantage of a favourable international economic climate as compared to the financial crisis in recent years.

Pointing out that the Micro invest programme had been closed by Malta Enterprise, Fenech said that this was a serious mistake.

"You do not have an economic plan. This is confirmed by the budget speech which shifts this responsibility on the Malta Council for Economic and Social Development. This is paramount to the government telling the council 'please draw an economic plan for us because we don't have any.' The budget was nothing but a PR exercise which conceals the ugly aspects and spins the good measures."

He added that the financial services sector, which was created by the PN administrations, attracted thousands of foreigners who work in Malta and bought or rented property in Malta without being granted a passport.

In reaction to the Prime Minister's disclosure of Fenech's endorsement of Henley & Partners, the company chosen to run the citizenship scheme, Fenech said that he had endorsed the company after it had provided free advice on the residency scheme to the previous government.

"Apart from giving us advice on the residency programme for free, they had also given us different advice on the citizenship programme from the one implemented by this government," Fenech said, adding that the government had backtracked on its original plans to ring-fence the funds and was now looking to make a "quick buck" and inject the funds in the consolidated fund.

The former finance minister said that the Individual Investor Programme, lived up to its name, because "the individual is the only one to benefit."

Opposition MP Claudio Grech said that the 2014 Budget also lacked clear plans on the knowledge-based economy and information technology.

Highlighting legislative lacunas, Grech the former head of the Malta IT Agency, said that the country needed to urgently address this aspect to enable it to overcome future challenges.

Echoing the PN deputy leader's call for greater efforts in creating new jobs, Grech underlined the value added of jobs in the wide-ranging IT sector which is globally valued at around €15 billion. 

He added that other countries had used residency schemes to attract individuals who start up venture capitals in the sector, creating jobs and strengthening their knowledge based economies.

In a tongue in cheek remark, Opposition MP Kristy Debono said that judging by the Joseph Muscat's knack for economics, "Muscatism" could soon be up there with well-known schools of thought such as Thatcherism and Regeanism.

On the citizenship scheme approved by Parliament on Tuesday, Debono said that the scheme "might boost the country's finances to the detriment of Malta's reputation." 

Without providing their names, Debono said that three foreign banks were closing down their operations in Malta

"Without causing alarm, I would like to point out that three foreign banks operating in Malta have already informed their employees that in the coming weeks and months they will be terminating their operations in Malta."

Debono said that government was certainly aware of the situation, and was duty-bound to give an explanation. 

Following the series of speeches by government MPs, economy minister Chris Cardona said that the government was turning white elephants such as the White Rocks project into projects which would foster economic growth.

He revealed that in just a few months, Malta Enterprise and the Malta Investment Bureau approved 23 new factories covering 25,000 square metres, including the new Lufthansa Teknik hanger. Moreover, other companies were in the process of expending their operations at the aviation park in Safi and the Bulebel industrial park.

On the reduction of energy tariffs, Cardona said that the government was proving the opposition's claims that this was an 'Alice in Wonderland proposal,' wrong and pointed out that industry would also enjoy the reduction. Cardona added that the private sector took a sigh of relief following the election because it no longer has to endure sleepless nights in fear of incurring former finance minister Tonio Fenech's ire.

Turning to investment incentives, Cardona said that economic growth was not only about introducing initiatives but it also depended on how these initiatives are implemented.

Insisting that the government was incentivising the manufacturing sector, Cardona denied that his ministry's allocation had been cut by €16 million, explaining that the former economy ministry's budget was split between different ministries following the March election.

Dispelling criticism that the government had no plan to create new jobs, Cardona said that the Labour administration was committed to create new jobs.

He said quantifying how many new jobs would be created was not the government's style of doing things and quoting Eurostat, the minister said that 5,000 jobs were created up to June 2013.

"The government was elected for five years and it is harmful to have the opposition sending out negative messages on unemployment and the economy. We are committed to cut down bureaucracy and increase the number of persons in employment."

In reply to criticism on Malta Enterprise's strategy, Cardona said that the agency was in the process of attracting foreign investment in the engineering, life sciences and gaming sectors, mainly from EU countries. 

Moreover he said that more investment was needed in other sectors and pointing out Malta Enterprise's priorities included the promotion of Malta as a competitive, innovative, export oriented country which focused on research and development.

He said the government was in the process of fine-tuning investment schemes which were not necessarily new but needed some tweaking to maximise the output of such schemes.