Issue link: https://maltatoday.uberflip.com/i/1510560
15 maltatoday | SUNDAY • 29 OCTOBER 2023 BUDGET 2024 economic challenges exist that are structural in nature includ- ing unfavourable demograph- ics, low educational outcomes, and fragmented ecosystems. Increasing productivity is the only way to maintain income growth and access to essential goods and services. We therefore would like to see a bigger focus on produc- tivity enhancing measures. On its allocative role we would like to see business support meas- ures and incentive grants given based on productivity enhanc- ing investments. In this vein, we would like to see invest- ments in the digital and green transition as well as in the en- abling environment including infrastructure. Over the past few years, a lot of investment has gone into the hard infrastructure, primari- ly roads. Government has also announced investment in in- dustrial infrastructure through the upgrading of various in- dustrial zones. However, Malta requires investment across a broad spectrum of infrastruc- ture including the energy, sew- age, transportation and the ed- ucational system. Innovation is going to be crit- ical for Malta's economy to remain competitive and attrac- tive in the future. Malta needs to further strengthen its inno- vation ecosystem at all levels especially business investment in research and development. Given the risk involved, there currently exists a market fail- ure in the financial and bank- ing system in their ability to finance such investments. The Malta Development Bank needs to play a key role in mak- ing available 'patient finance' to support research and innova- tion projects. Increasing skills will also be imperative and we would like to see a greater push towards the implementation of the National Employment Pol- icy. From a regulatory and ad- ministrative role, government has already launched several reforms however it is time to delve deeper into institution- al weaknesses, resources, and transformation. A governance transformation reform pro- cess should be started to en- sure that institutions are truly digitally transformed and able to leverage the full benefits of technology to become digital to the core. This will bring about several benefits to society at large, es- pecially businesses that deal so often with institutions and reg- ulators. In addition, we would like to see more regulatory and juris- dictional innovation being ex- ercised with the establishment of new niche economic areas or the further diversification of sectors already well-estab- lished on the island. We also strongly believe that the budgetary process needs to embrace more fully the con- cept of impact assessments and performance-budgeting. Performance-Based Budgeting aims to achieve more effective and efficient implementation of public functions, higher quality of public services, re- duction of general government expenditure and staff costs, and more flexible and less bu- reaucratic management of the government sector. As a small and open island, the economy will continue fac- ing key challenges over time and needs to build its own re- silience to inherent vulnerabil- ities that can be exacerbated by external occurrences. The 2008 financial crisis and the COVID pandemic should remain as stark reminders. It is therefore even more critical for our country to pursue and en- gage in economic debate that is evidence-based and benefi- cial to the country in the long- term. Social partners have a key role in this together with political parties. Above all, we do hope that the budgetary debate in the coming weeks should be more about substance and less about politics. BUDGET 2024 FOLLOW LIVE on maltatoday.com.mt MaltaToday will offer ongoing coverage of the budget throughout the day on Monday, providing a snapshot of proposals made by the social partners. In the evening, we will be providing extensive coverage of Finance Minister Clyde Caruana's speech. Dr Stephanie Fabri and JP Fabri will be our resident economists, giving insightful instant reactions to the measures announced by the Finance Minister. Follow Budget 2024 as it happens on MaltaToday. A special printed edition will be out on Tuesday at newsagents. Budget 2024: MaltaToday special coverage Innovation is going to be critical for Malta's economy to remain competitive and attractive in the future. Malta needs to further strengthen its innovation ecosystem at all levels especially business investment in research and development.