|
Chamber warns against complacency
following IMF, S&P’s reports
The Chamber of Commerce has said it would be dangerous for
the country to be complacent about its future needs and performance
following the positive IMF and S&P’s reports.
In a statement, the chamber said that it noted that the IMF
commented favourably on a number of economic indicators as reported
through Official Data. These include inflation, unemployment
and GDP growth. However, the Chamber cannot stress enough that
such comments should not be blown out of proportion by Government
or any section of the media as it would be very dangerous for
the country to be complacent about its future economic needs
and performance. According to recent surveys it has carried
out with its members, the Chamber believes that the local economic
situation is not as buoyant as figures alone depict it to be.
“With reference to the S&P report in particular, the
Chamber is gratified that the New York based credit rating agency
has confirmed Malta’s ratings giving the country a “stable”
outlook. Stability is a fundamental pre-requisite for the attraction
of investment and future economic development. Malta cannot
afford drops in credit ratings issued by international independent
agencies such as Moody’s or Standard and Poor’s,”
the Chamber said.
The Chamber said the IMF has been repor-ted to state that Malta’s
deficit reduction needs to be more ambitious.
“The Chamber considers the deficit problem as a critical
one for the country and, for these last years it made several
representations to this effect mainly through the formal budget
proposals it sends to the Minister of Finance on an annual basis
as well as through its active participation on MCED, now MCESD.”
“The Chamber has always maintained that the deficit should
be tackled through a responsible curtailment in government expenditure
where it is believed that there is still significant scope for
savings in taxpayers’ funds especially through the control
of wastage and abuse. This comment was replicated by the IMF
‘Fiscal deficit reduction would best be achieved through
expenditure reform rather than through further increases in
tax burden’,” it added.
The Chamber said it is against tackling the problem through
increased taxation. A widening of the tax base or the alteration
of taxation parameters which cannot be accounted for beforehand
by investors may only serve to introduce fiscal uncertainty.
“Government’s recent measures to step up efficiency
in tax collection have been noticeable. This is positive in
itself as the Chamber argues that all taxes should be paid,
although it cannot be denied that this has contributed towards
a tight cash-flow situation within the remainder of the economy.
Moreover, this must be complemented with other measures aimed
at eradicating the rampant tax evasion that continues to exist
in many sectors of the local economy.”
It added that a common message from both reports in question
is that economic reforms must continue and Malta must strive
to enhance its competitiveness.
“Again, the Chamber has also felt this need for some time
and to this effect, it has decided to hold a national conference
on Friday, 5 October with the theme “National Competitiveness
– The Way to Prosperity”.
The aim of the conference is to discuss Malta’s requirements
in terms of National Competitiveness in the light of the globalisation
process and the country EU membership aspirations. The conference
will be addressed by local and international speakers. Further
details will be announced in due course.
|
