During the past days, we have all been hearing about proposals that make you truly wonder how these can be financed since they all rest on a reduction in taxes or an increase of public expenditure.

Moreover, some of these proposals seem to be disjointed as they lack an element of economic strategic focus and also seem to be built on the notion that the future and the so-called ‘new reality’ will be a re-hash of the reality we lived before the pandemic. It makes you wonder whether these proposals are what the country truly needs.

The Malta Chamber of Commerce, Enterprise and Industry has published its recommendations for the next legislature, which seem like a breath of fresh air. These recommendations are based on a realistic analysis of the challenges ahead.

The document clearly outlines the main pressing issues that the country is facing, which can be summarised as the following: inadequate supply of human resources; lack of transparency and unfair competition in public procurement;  excessive public sector employment; a legacy of defective privatisation deals; limited options for passenger connectivity and transportation of goods; a national airline that is making its last ditch attempt at survival; excessive bureaucracy and inefficiency in processes managed by public authorities and financial intermediaries; no long-term holistic urban planning; greylisted status of the jurisdiction by the FATF; an under-resourced justice system that is burdened by a huge case load.

I believe the above to be a truthful and realistic depiction of the challenges that need to be tackled head on. However, beyond the above points, there is one single matter outlined in this document, which I believe is critical when taken within the context of the turbulent situation the world is going through.

The next legislature, besides dealing with an economy that needs to continue recovering from the aftermath of the pandemic, will likely also need to face various headwinds from the Ukrainian conflict. The first that comes to mind is further inflationary pressures from various commodities and energy prices. All this makes a more coordinated approach to policy development even more important. It is also crucial that the various national strategies that will be pursued are well-articulated and truly reflective of the real challenges ahead.

We should engage in a dialogue with the European Commission over how our corporate tax framework can pass through a staggered transition- Silvan Mifsud

This also means that, in this period, as we enter a post-pandemic phase, there needs to be a major rethink of various policies including our education system; the type and level of investment in infrastructure and digitalisation; the integration of sustainability considerations into energy generation; mobility; water and waste management; and urban development.

All these need to be supported by genuine efforts in improving governance at all levels to be able to restore the international reputation of the country.

This improved governance will be heavily needed to focus on fiscal discipline as the European Monetary Union’s Growth and Stability Pact is expected to be reinstated in 2023. One also has to keep in mind that there are various efforts at tax harmonisation, with the EU Minimum Tax Directive expected to come into force. I strongly believe that, as a country, we need to be proactive on this front, rather than bury our head in the sand, hoping that the inevitable will not occur.

Our political capital is not endless and it would serve us well to engage in a dialogue with the European Commission over how our corporate tax framework can pass through a staggered transition to levels agreed to with Brussels, rather than having to implement a complete shock to the system at some point in the future.

Our political capital is also not endless when it comes to our defence of our citizenship by investment scheme and,  hence, I would expect that this scheme would need to be stopped in the near future as further pressure will be placed on Malta by the EU if we do not do so.

This means that revenues from this scheme will dry up and, hence, the importance of pushing economic activity by quality, knowledge-based and investment-driven segments of the private sector is now even more relevant.

Based on all the above, the chamber’s document outlines specific recommendations which have been grouped under five pillars: economic recovery, resilience and growth; good governance; human capital and education; infrastructure and digitalisation; and sustainability.

Any future government would do well to take note of these proposals.

Silvan Mifsud, is chairperson, Malta Chamber Family Business Committee.