Rising unemployment, declining tax revenues and a sharp drop in tourist occupancy are indicative of the malaise affecting Gozo where unemployment went up from 644 in 2005 to 768 in 2009.
On the tourism front, NSO statistics show that while the new use of bed places in Malta went down by 15.6% between May 2008 and May 2009, in the same period occupancy fell by 18.8% in Gozo.
With some hotels reporting occupancy rates of 35% in the peak of Summer, the situation has been described as critical by the Gozo Tourism Organisation.
The Gozitan property market has also experienced a significant downturn: the finance ministry attributed a €4.2 million drop in tax revenue from Gozo to a decrease in property sales. The drop in sales led to a corresponding decrease in capital gains revenue, leading to a total 26% drop in collected income taxes in Gozo, from €16.2 million in 2007 to €12 million in 2008.
In fact income from capital gains taxes alone – which is paid on profits from property sales – in Gozo decreased from an all time high of €8.1 million in 2007, to €5.2 million in 2008. Between January and March 2009, capital gains taxes from Gozo contributed a mere €1.3 million to the government coffers, an indication that the number of property transfers remains low.
The bleak economic situation in Gozo could have been a factor in the Nationalist Party’s fall from grace in last June MEP election. For the first time since 1955 the Labour Party has surpassed the Nationalist Party in the Gozitan 13th district.
In Gozo alone the party in government has seen its support fall by 8%. The magnitude of the defeat can only be partially explained by the decrease in turnout.
With Gozo increasingly becoming a key district where elections can be won or lost, the government could be tempted to relax its guard on welfare abuse and tax evasion which seem to be rampant in Gozo.
This is substantiated by figures showing that of the 6,346 people in Malta and Gozo who have been ‘boarded out’ of employment for medical reasons and are in receipt of a supporting pension from the State, 974 (15%) are from Gozo, (32,000 residents or 7.7% of the Maltese population).
However the social policy ministry has revoked the invalidity pensions of 376 Gozitan beneficiaries, following decisions of a medical board. These constituted 21% of all those removed from the boarded out list in the past two years.
Still, other figures also point to rampant tax evasion in Gozo: having 8% of the islands’ population, it only contributes 2.2% of total income tax in Malta and 2.1% of total social security contributions.
Gozo continues to teeter between the government’s promise to turn it into an eco-island and the extravagance of overdevelopment seen in Malta. It would also be tragic for Gozo if the government succumbs to pressure from property developers by issuing more ODZ permits or if it seeks to address the decline in tourist fortunes by sacrificing more countryside to build an airstrip.
Gozo simply cannot afford to lose one of its best global adverts: the world heritage status enjoyed by the Ggantija temples. And yet development has been allowed to mushroom on its buffer zone.
If the eco-island promise translates in more eco-friendly jobs in sectors like agro tourism and information technology, Gozo can become a hub of modernity without losing its natural beauty. Nothing like that can happen of its own accord or as a result of indecision and the lack of commitment to a known and pre-determined policy destination.
Any comments?
If you wish your comments to be published in our Letters pages please click button below. Please write a contact number and a postal address where you may be contacted.
Download front page in pdf file format
All the interviews from Reporter on MaltaToday's YouTube channel.
