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Karl Schembri and Kurt Sansone
Prime Minister Eddie Fenech Adami called for “an end to confrontation and divisions” so that the country could “move forward” during a Union Haddiema Maghqudin General Conference this week.
Referring to UHM’s proposals for a social pact, the prime minister said: “Now we have a concrete document for all social partners to discuss in the country’s interests.”
He said that for social partners to agree on the social pact they would have to “abandon systems of confrontation and divisions” between workers, employers and the government, and link pay rises to productivity levels.
The prime minister said he was satisfied to see a leading union such as UHM take the initiative and launch a debate on the social pact although he added that he had not yet read the document.
The best infrastructure to discuss it is the Malta Council for Economic and Social Development, Dr Fenech Adami said.
“A social pact would assure that we get the best out of our human resources,” Dr Fenech Adami said. “It’s a logical step, in my opinion, as the time for short-term solutions is over.”
UHM Secretary General Gejtu Vella said the country was at a crossroads and decisions had to be taken.
“We have eradicated ‘us and them’ phrases, now it’s time to gain each other’s trust,” he said, referring to employers, unions, the government, opposition, AD, the Church and civil society.
Mr Vella said he hoped “parties would not launch an electoral campaign everyday” and warned them to “stop promising shelter to some parts of society when this was impossible to give”.
He said the Opposition leader had accepted the UHM’s invitation to participate on the MCESD but this was followed with “some not so clear signals” a few days later.
Mr Vella asked who was going to shoulder responsibility for more than Lm360 million government revenue that remained uncollected. He also asked who was responsible for a pay rise to AirMalta employees when it was clear this was unsustainable.
He criticised government agencies and authorities calling them “small gods appointed by the government” which were adding to the red tape and appealed to politicians to let the civil service work without any interfering.
He also made it clear his union would no longer tolerate empty talk about the country’s problems.
“We won’t let anyone say there are alternatives without telling us what they are,” Mr Vella said. “From now on, whoever says ‘no’ has to tell us what his alternatives are. … We have to make sure we convince the minority which still does not believe the social pact is a solution.”
Alternattiva Demokratika Chairman Harry Vassallo was far from optimistic. He lambasted the two major political parties for dividing the country.
While he had words of praise for UHM’s “courageous step” in taking the initiative and making its own proposals, Dr Vassallo said his party was not ready pretend there were no problems facing the country.
“We have a shocking situation … all of a sudden we’ve realised the health service and pensions are unsustainable, the dry-docks issue has been supposedly solved and government is saying it will stop all the misguided investments at Air Malta … I ask, who is Malta’s prime minister, Eddie Fenech Adami or Calisto Tanzi? Had our country been a company we would be under the magistrates’ investigation.”
Dr Vassallo said the government “had to lie” before the general election when it said that the country’s finances were sound because otherwise it would have lost it.
“I’m not criticising Dr Fenech Adami,” he added. “I’m criticising our political system.”
For the social pact to work, the country’s foundations needed to be changed, Dr Vassallo said. The government has to be truly transparent and publish all the information required by social partners.
The AD chairman said a change could happen on 12 June if the Green candidate for the European Parliament elections were to be elected.
“It will bring about political pluralism which is so badly needed here,” Dr Vassallo said. “If someone says that is not enough, I would say that is definitely not enough, but that’s all we can do to change the foundations.”
UHM sets the social pact
ball rolling
The UHM’s 52-page document contains a comprehensive list of proposals that bind unions, employers and government. Some may argue the proposals do not go far enough to address some of the more burning issues that hound the economy such as exorbitant port charges, monopolies in the transport sector, overstaffed public entities and a bloated public sector. The report also makes no mention of the summer half days for government employees and whether these should be curtailed.
Nonetheless, the bold exercise undertaken by the UHM has produced a blueprint on which the social partners may start discussing the best way forward.
Among the more controversial proposals the UHM is suggesting a limit on the percentage of wage increases for the period 2005-2006. The wage increase for 2007 would then be tied to sectoral productivity rates, calculated according to a pre-determined mechanism. The UHM is also suggesting the cost of living increase announced by government in every budget to be incorporated in any wage increase thus employees would get one increase rather than two separate increases further reducing costs for industry.
Tied to these proposals is a suggestion for employers to annually reinvest a percentage of their profits in their business for employee training and the purchase of modern technology.
As for government, the UHM is proposing a moratorium on direct and indirect taxation for the next three years and any increases in the prices of services offered by government controlled entities should be introduced in a phased approach after consultation with the social partners.
The UHM leap frogs what is possibly another controversial subject – the number of public and national holidays – by suggesting any holidays falling mid week be shifted to either Monday or Friday to reduce the cost of having to reset and restart machinery.
An important element in the UHM document is the insistence on the efficient use of human resources particularly by encouraging greater participation of women in the work force.
In this respect the social pact should include measures to assist working parents to meet costs of childcare services such as tax relief, allowances and social welfare payments targeted at low income families.
Other family-friendly measures in the report speak of innovative working concepts such as flexi-hours and tele/e-working. The UHM also proposes the removal or reduction of fiscal disincentives associated with part time work that may discourage women from re-entering the work force on a part time basis.
Targeting the unemployed, the UHM suggests introducing a ‘loans of honour’ scheme whereby government acts as guarantee for unemployed who want to take out a commercial loan to set up as self employed.
The report also stresses the importance of a multi-skilled workforce and the need to have better links between the education system and industry. These issues are reflected in a chapter dealing with innovation.
Proposals linked to these issues include fiscal incentives for employers to take on apprentices thus ensuring new entrants in the labour market will also have practical work experience, an education system that emphasises linguistic capabilities and a tertiary education stipends system linked to performance and utilised to support students in those areas of studies where additional manpower is required by industry.
The UHM is also proposing the setting up of a research and development fund to facilitate access to finance for innovative SMEs. The fund could be financed from a percentage of income tax government collects from corporate entities.
Bureaucracy also finds its place in the report with two particular proposals aimed at trimming expenses for business. UHM proposes the setting up of an independent regulatory impact assessment unit whose job would be to evaluate the impact of new legislation on business. It also proposes that ministries must undertake annual ‘anti bureaucracy’ exercises and creating action plans to reduce unnecessary bureaucracy.
Identifying tourism as a priority area for the economy the report proposes the introduction of environmental wardens to safeguard natural environment. The report says that a culture of service has to be built and cleanliness must become a top priority. However, apart from the usual rhetoric there are few concrete proposals on how the tourism product could be improved over all.
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