Remember all the talk about the world changing after Covid-19, that nothing will be the same again, that businesses that fail to restructure risk falling behind? Remember the comparison with the 1929 crash when giant businesses of the turn of the century shrivelled into husks? Remember the analogy of the oil crisis of the 1970s when the rules of the world trade needed reinventing because to have and to have not acquired a new meaning?
Robert Abela and his government remember none of that.
Look, I have no complaints that couples that had their wedding cancelled get compensation to have a party next year. And I certainly don’t disagree with improvements on in-work benefits for low income families.
I will ignore the reduction in fuel prices and the subsidies on commercial electricity rates because those reductions climb down from artificially high rates fixed for us by Konrad Mizzi for whatever it is he pocketed in the process.
But I do think that the economy-boosting ‘incentives’ announced by the government yesterday severely lack imagination. The government is behaving a bit like a restored monarchy after a revolution acting as if nothing ever happened.
Consider the incentives to the hotel and restaurant business. In a world living with Covid-19, the tourism industry worldwide will have to deal with phenomena that did not exist last Christmas. Foremost among them the fears of their clients. Potential tourists from all over will add more criteria to their choice of where to travel. The usual – cleanliness, comfort, activities, accessibility, affordability – will now be complemented with anti-infection measures that do not detract from the fun.
This will require innovation. Some products in the tourism industry will likely not be viable for some time. I’m using some inexpert imagination here but do you think people will be just as comfortable sharing water-slides in a water park like the one in Baħar iċ-Ċagħaq as they might have been last year?
There are things that may appear smaller but will go into the choice travellers make. Take the ban on hotel room remote controls. You can either comply with that requirement and switch off in house entertainment or give your customers apps so they can manage the hotel TV using their own phone. That simple change will require a cost. One of many costs that tourism operators will have to incur to offer tourists a fun and safe experience.
Malta’s tourism industry is competing with everyone else to bring home our share of a much-reduced market. How does our government support innovation, restructuring, improvements and the marketing of the same on the world stage? Does it give grants, loans and tax breaks for investment in Covid-busting refitting? No. It hands out vouchers for pizza.
The small-minded thinking with this voucher business is based on the idea that some people need help in overcoming the fear of going to restaurants and hotels and paying their first bill might be a way of nudging them out the door.
Restaurants will look fuller than the rather depressing sparseness of today. Things will look better. The government needs that.
But the government ignores the fact that our hotels and restaurants do not balance their books on the basis of local consumption. Sure, it is important, but it is nowhere near enough. The €100 pizza voucher will do nothing to help the Maltese tourism industry present itself to a tighter global market and get people to fly here for their breaks instead of towards other competing destinations.
The government’s ‘solution’ learns nothing from Covid-19 and continues to expect it to go away like the ashes from the Icelandic volcano that stopped tourism for a few days some years ago until the crisis, quite literally, blew over. Dishing out a one-time cash payment to consumers changes very little beyond this summer.
It is comforting to know that the government knows we have a tourism industry. No other economic activity got any attention in these ‘incentives’ apart of course from the much-loved construction industry, the only activity that was not required to pause by the health authorities.
More on construction later. But inasmuch as tourism needs innovation, so does, say, manufacturing. Indeed, you would have thought that the problematic of social distancing or the prevention of contagion could have created an opportunity for new found competitiveness. If we are quicker to innovate on factory design, virus-free packaging and so on, we might actually be sharpening a competitive edge in a job-creating sector. But why bother?
Service industries also need to innovate. Many offices are inadequate for what today we would consider safe distancing. Work places need to innovate replacing air-conditioning with clean ventilation, deploying shared desks, improving infrastructure to increase working from home. We need innovation in transportation that goes beyond switching off the A/C unit and forcing people to smoulder in 40-degree temperatures. The list is endless. And yet the government is providing no support for businesses to find new and safe ways of doing things so that they can outlive this sea change to the world’s economy.
We’re expected not to think about this as we convert a €100 voucher into wine, a bit like the Cana miracle that achieves little more than cover for the numerically-challenged quartermaster.
And then, the only economic activity that seems to matter in this country because of the artificially high value of land purely because there’s so little of it: buying and selling property. The government cures us of the potential risks of living with Covid by spending more on our favourite hallucinogenic drug. For as long as we can continue to inflate prices on property that swaps hands without anyone living in it, we can continue to waddle through a false economy fuelled by commissions, mortgage interests and the ever-stretched elastic of a speculative bubble.
But we’re ignoring something here. The appetite for buying and selling was propped up by a growing population, tens of thousands of immigrants who came here to work in our service industries and our tourism and a booming demand from tourists themselves for short-term accommodation.
If we are unable to remain competitive in those industries the air that keeps our property bubble nice and tight will let off and when the bubble deflates, it will look ugly.
Not even €100 worth of wine and pizza would make up for that.