It is a call to “arms”. On behalf of our industry.
For the benefit of the nearly 23,000 families whose livelihoods and wages depend on our industry. For the greater good of our economy.
This is not cheap and petty partisan politics.
But if there’s one thing I’ve learned, as I’ve waded and plowed my way through the political prairies over the past five legislatures, it’s the moral imperative that falls on all of us to erase “short-termism” to the detriment of long-term good.
It is in this spirit and in my heart that last January I undertook to exercise my new duties as Opposition Critic for Industry, as detailed by the Leader of the Opposition.
The multiple meetings with the main stakeholders, actors and operators of the local manufacturing industry painfully made me aware of a major puzzle with which they had been grappling for several years: the exponential increase in transport costs and logistics.
In the long run, this inevitable skyrocketing costs that our employers, and therefore we consumers, must pay is simply unsustainable. It is a major contributor to the excruciating increase in the cost of daily living from which we suffer.
Some indisputable facts:
- In 2016, a detailed study carried out by one of the main players in the Maltese industry revealed that while Belgian and Italian industrial employers had on average 2% and 6% respectively in transport costs, their Maltese counterpart had almost 20% for the same transport.
- Over the past 18 months, container shipping costs from China to Malta have increased from around € 2,000 per unit to € 11,000 for the same trip and the same container.
- Since 2012, Malta has been lowering the World Bank’s logistics performance index every year. From 43rd place in 2012 to 69th worldwide in 2020 and the EU Member State occupying last place in this index. An index that is consulted by foreign investors to assess how easy or not it would be to import and export to and from a country.
- The same 2016 study showed that a minimum of 20 million euros is paid each year by our local Industry players in additional transport costs simply because we are surrounded by the sea, costs that their competitors on the European continent do not suffer.
- The NSO Industrial Producer Price Index for August 2021 released this week is very gloomy. It recorded an increase of 4.22% compared to the corresponding month of 2020. This index monitors the evolution of the selling prices of all flagship products. In other words, it provides an important x-ray on how competitive our industry is or can be.
- What struck me the most about this index is the very strong and unprecedented increase in prices over the past year.
- I invite you to consult the attached table issued by the ONS which emerged from a discussion I had with an old salt from the Maltese industry on the day of its release. These objective truths can neither be denied nor hidden:
- Compared with August 2020, the industrial producer price index increased by 4.22%. The price of intermediate goods increased by 7.82% (in other words, the price of raw materials imported by our factories and semi-finished products soared);
- The price of industrial products was the highest since August 2017 (with an index of 110 to 134), increasing every year;
- August 2021 saw the largest ever increase in industrial producer prices in the past 12 months, a steady and steady increase month after month since August of last year;
- August 2021 saw the largest monthly increase in the industrial producer price index since August 2017 (from 1% to 6% compared to the previous month);
These grim numbers show how fair and timely the PN proposal, launched last month, for a national and annual fund of 40 million euros is so that our industry can compete on an equal footing with its counterparts. This aid will be a boost in raising the wages of our existing factory and industry workers and will be an irresistible incentive for new players in the industry to relocate to Malta.
This money will be disbursed, in consultation with stakeholders, to offset all logistics and transportation costs incurred by the industry each year due to our insularity. With this money, our GDP will grow by around 10% per year.
I am satisfied that our signal proposal has already received public support from the Chamber of Commerce, the Chamber of SMEs and the Employers’ Association of Malta.
In order for this national fund to materialize, we call on the government to immediately agree with the opposition to present our convincing arguments to the European Commission for the regulation on state aid to be changed and for this crucial aid to begin. to be granted.
I believe we can do it. I believe we can change the status quo that is choking our industry. I believe that the long-term gain of our industry takes precedence over all short-term antics.
Where is the government?
Jason Azzopardi is a nationalist MP and industry spokesperson