Issue link: https://maltatoday.uberflip.com/i/1483500
13 maltatoday | SUNDAY • 6 NOVEMBER 2022 OPINION Beyond the budget PROVIDING stability and visi- bility in such uncertain times is a commendable economic strat- egy. We could, however, truly capitalise on this by leveraging today's stability and create the building blocks of tomorrow's economy. One which delivers quality and prosperity rath- er than stand-alone economic growth. In the weeks leading to the budget, it was clear that the government's intention was to cement economic stability, all the while providing solid coun- ter-inflationary measures to those who need them most. This was achieved through the unequivocal commitment to maintain energy price stability for as long as needed. Undeni- ably, a significant segment of small and family-owned busi- nesses would not have been able to cope with a COLA increment of €25 and larger entities in the tourism and manufacturing sec- tors would have been forced to scale back operations. With this measure alone, the Maltese government has not just provided stability and visibility to our economic operators but very probably avoided stagfla- tion – a bleak economic outlook coupled with high inflation and unemployment which is now the baseline for many European economies. Today's stability, tomorrow's sustainability It is on this very same stability that we should take the opportu- nity to uplift our economic mod- el and invest in our own long- term competitiveness. We need to effectively change the economic mantra from growth at all costs to prosperity for all. We hear a lot about sustaina- bility and the new green econo- my, but what this really means is that we need to ensure that our industries are all geared towards generating economic growth to- gether with – and not at the det- riment of – a better quality of life for our citizens. We can only do so if we truly develop and transform exist- ent sectors which can produce wealth by valorising the envi- ronment rather than polluting it. This can be intertwined with an economic model which champi- ons fairness and quality careers rather than the dependency on cheaper sources of labour. Numbers don't lie On the environmental front we have three sectors which can de- liver a tangible positive impact on people's standard of living if they are truly committed to this qualitative transformation. Energy, Construction and Transportation alone add up to 75% of Malta's carbon footprint. It is only by catalysing a trans- formative change in the way these sectors operate, that we can truly deliver on our ambitions for a better economic model. The ongoing energy crisis ex- acerbates the importance of diversifying and investing in re- newable sources. Undoubtedly, capital investment in cleaner and greener energy requires proper planning and a decisive commit- ment towards modern energy infrastructure. We also have to be pragmatic. Our limited land-based capacity can however be overcome by our off-shore opportunities. Malta should lose no time to reap the potential of maximising its mar- itime territory by incentivising investment in the energy sector through our own exclusive eco- nomic zone. This new sector can provide significant socio-economic op- portunities including the crea- tion of green jobs for our work- ers and improved local value chains. Enabling a near-zero construc- tion industry Similarly, we need to drive a sustainable vision of our con- struction industry in a manner which would not stifle economic growth. Just like with other industries, the profit motive will remain the driver for future projects, so we need to support the demand for truly green construction as op- posed to conventional blocks of concrete. One thing we must put on the agenda, is redirecting demand for greener and cleaner real es- tate. We can do this by halting our practice of treating CPE certification as simply a tick box exercise. Instead, we can convert this into a proper quality cer- tification which measures the energy efficiency of buildings together with the level of sus- tainability of the construction material used. This will provide a practical tool for government to effec- tively incentivise demand for property with near zero nega- tive impact on the environment through the redirection of ex- istent fiscal measures which are currently used to support home ownership to certified green construction as opposed to a carpet treatment of properties. In a similar move, development rules should be changed to allow a level playing field for large real estate development to be contin- gent on net-zero certifications such as LEED and BREEAM. For large developments, this should become the baseline norm rath- er than the exception. Maltese banks can play a huge role in transforming the proper- ty industry. Two thirds of their loan book and 90% of the collat- eral they hold is tied to the prop- erty market. Banks should stop giving lip service to their social commitment and tangibly com- mit to support near-zero con- struction by offering green loans with lower interest rates. We hate traffic but we love cars more Improving our road infrastruc- ture, together with key incen- tives such as free public trans- port are undeniably good steps in the right direction. However, this does not mean that we should simply stop there- and it starts with a ges- tation of a total mindset shift in our mobility culture. The cold reality is that we all love our cars more than we hate traffic. Sustainable mobility can only be achieved if we, as indi- viduals, start making choices that reduce the dependency on private car usage. One way of tackling this is by having local councils charge non-residents for parking spaces in urbanised village core. This is the same sys- tem used in every other Europe- an city. The revenues collected, which in areas such as Sliema or St. Ju- lians could amount to millions of euros annually, would be used to fund the local council's own budget and directly returned to the community. An initiative like this will in- crease the opportunity cost of using a private car without imposing draconian measures which are realistically difficult to implement. All of this is achievable. It all hinges on our willingness to drive positive change and taking our economy to this next level. Steve Ellul Steve Ellul is a financial consultant and a lecturer at the University of Malta steve.ellul85@gmail.com