Editorial | Pre-budget document offers important commitments

In the pre-budget document unveiled yesterday, government has made some very important commitments necessary for economic recovery and stability.

Government has pledged to draft a vision for the economy for the next 10 years and a strategy for the next three years as the country strives for resilience and competitiveness.

This forward planning is important, especially at a time of global uncertainty caused by the coronavirus pandemic.

Having a roadmap that allows space for rapid change depending on the prevalent circumstances is going to be crucial, especially if it gives businesses certainty over a span of time.

The Finance Minister’s pledge not to increase taxes to mitigate the higher government spending induced by the pandemic, is also noteworthy.

The government is showing that it is willing to use all the fiscal leeway it gained over the past few years when it registered surpluses and cut public debt to well-below the 60% mark set by the Maastricht criteria.

The important thing is to have targeted spending programmes that no only help to alleviate social and economic difficulties caused by the pandemic but enable existing and new industries to grow and create jobs.

To this end, the pre-budget document reiterates the pledge made in the recovery plan a couple of months ago, for a seven-year investment programme of €400 million to upgrade industrial infrastructure and the creation of new office spaces for new business models.

Government must consider this a priority and adopt the same efficacy it showed in the building of new roads.

Spending must be done diligently and transparently but these must not be excuses for procrastination.

The pre-budget document also speaks of sustaining small businesses through different schemes that help them explore new markets, encourage telework, encourage investment initiatives and help start-ups with implementation of their innovative projects.

Government restates its commitment to attract investment from the medical cannabis industry. Unfortunately, despite having passed legislation rapidly through parliament a few years ago, no such factory has started operating.

Greater efforts are required in this field.

The pre-budget document makes multiple references to the aviation industry and the potential it offers to attract different niches.

To this end, an airport masterplan that was on the cards two years ago has to see light of day. In the wake of an air travel industry decimated by the pandemic, developing alternative aviation-linked initiatives that contribute to growth could help mitigate the negative impact of COVID-19.

But the pre-budget document also lays down other areas of focus, which are as important as those targeted at economic growth.

Emphasis on good governance, the rule of law and the fight against financial crime are key areas listed in the document. Malta awaits its fate next month to see whether it will be grey-listed by Moneyval.

Irrespective of the outcome of this important test, the country must continue its efforts to put all necessary resources at the disposal of regulatory and law enforcement agencies to ensure the country starts prosecuting financial crime.

The pre-budget document states that the government’s efforts will be directed towards achieving a complete recovery in economic activity in the coming year.

And this target will be attained through measures which find a balance between public health and the economy.

A clear way forward, even if it may require tweaking because of changed circumstances, is what the country needs from Budget 2021.

The pre-budget document, although bereft of detail, suggests the government could be charting such a path.