07 July 2004

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The need for a finance minister

The Prime Minister’s decision - driven by circumstances - to appoint himself as minister of finance was bound to be controversial.
It carries political risks since it would lumber him personally with the responsibility of a worsening economic situation and it deprives him of the time to focus fully on the big picture of Government.
Prime Ministers are more than just ‘primus inter pares,’ they are responsible for the whole workings of government. In an ideal situation, like Margaret Thatcher, they would have no departments under their direct responsibility but would be fully focused on the workings of the departments falling under their colleagues. This entails benchmarking the performance of ministers, ensuring that political goals are met and creatively driving new policies through cabinet.
We have the distinct impression fortified by the growingingly tired look in the Prime Minister’s face that he has little time for the big picture and all the time for the day to day running of a department with inadequate knowledge of finance or the economy.
The Prime Minister should appoint a minister for finance as quickly as possible. This is a major portfolio requiring expertise and drive. His options are, understandably, very limited. With the departure from Cabinet of John Dalli his party has little expertise in this field. The party should invest quickly in persons from this camp. His options from within parliament remain very limited. He could go for the promotion of Tonio Fenech who to date has shown an aptitude for this task but lacks much experience. Alternatively, we believe, as advised when the vacancy arose, that he should appoint a technocrat for the job. The present Governor of The Central Bank would make an ideal Minister of Finance, a competent technocrat without political ambitions who says things just as they are. This would be a sterling choice.
The Prime Minister’s parting with the responsibility for Malta’s finances, is all the more urgent in view of our commitments in Europe. The Prime Minister is expected to attend many European appointments in his office as minister of finance apart from the numerous occasions he is away from the country on Prime Ministerial duties.
We do not underrate the benefit of having a Prime Minister with the clout that the finance minister’s office holds. However, having a position which can lead to a higher sense of responsibilities from the mandarins and the senior civil servants when called in to Auberge de Castille to explain the spending in their departments, would be more advisable.
In addition to a new finance minister there is a need for a sense of creativity in how to generate economic growth. The cutting of expenditure is fine and necessary, but it does not generate growth and very often has quite the opposite effect. There is a clear need for the creation of a number of schemes that generate economic growth for the country. Very little seems to have been done in this field.
Schemes could be set up encouraging owners to develop abandoned properties by incentivising them to develop them. More often than not the abandonment arises from inheritance disputes. Surely a legal mind could solve this web. It would help lessen the amount of new buildings which are having a deleterious impact on tourism and our quality of life.
Government could sell a lot of its idle assets in the form of both movable and immovable properties that are rendering no income to government as they are not being used; or are subject to a tenancy with little income and at the same time are not being used. Surely a solution could be found to this problem too. Government could further boost the selling of Malta as a location to learn English.
Much is already being done by the private sector in this sphere but surely even better results could be achieved if more focus was applied. Government must invest more in education. This is the key to creation of jobs in an ever-growing knowledge based society. It is useless attracting investments to Malta if there are not the qualified personnel to add value to these enterprises. Government could yet again introduce a scheme to encourage people to bring funds invested abroad back to Malta and specifically tie this benefit to the creation of job opportunities in the country.
Finally there is the growing feeling that a lot of the Prime Minister’s time has been applied to solving internal party squabbles. He must be aware that this kind of internal squabbling threw the Sant government off the track. It is hoped that with the conclusion of the Dalli affair he can now be fully focused on running his job, which more than anything else involves keeping a constant watch on the big picture of

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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