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The National Action Plan for Employment launched by Government, as a draft guideline for consultation with all the stakeholders in the labour market is, barring certain omissions, a well-thought out and forward looking initiative. It deserves and indeed has already received the approval of all the main stakeholders in the market place. It embodies a consultation process: prepare a plan or rather guidelines, discuss with all interested parties, put it up for public discussion, amend where necessary, establish consensus and implement.
Its success will ultimately depend not only on the willingness of all the stakeholders to compromise and on Government to enforce all the measures agreed to, but mainly on how competitive our country is in the global market place. In essence this plan can serve as the basis for the social pact, the brainchild of the UHM.
The leitmotif running throughout the plan is that growth depends on the productive jobs created in market place. The creation of these productive jobs, with an emphasis on the word productive, together with foreign direct investment, increased revenues from tourism and ruthlessly controlling Government expenditure is the essential recipe towards reviving our economy. If all of this is achieved Malta will take a few giant steps in the right direction. But, what is being suggested, is not enough.
The plan is not a job creation strategy, but merely aims to create an environment which will allow jobs to be created - it talks about how to create more and better jobs. The link between education and job creation is self-evident. An essential part of creating an environment for jobs is the creating of a competitive climate whereby investors are attracted to invest in Malta as they did in the late sixties and early seventies. There can be no job creation outside a competitive environment.
Investment is a very shy bird! To its merit the plan does recognise: the need to reduce burocracy; that Government induced costs are adversely affecting business; and that the better enforcement of tax and employment regulations are a necessity to ensure fair competition between regular and irregular businesses. It highlights the need for more fiscal support for small businesses and the need to develop a sound venture capital market since bank financing still depends on high collateral. The plan is spot-on when stating that entrepreneurs create jobs and recognising the consequent need to make the regulatory framework more business friendly.
The plan is target setting. It includes a number of targets, a three percent increase in jobs over a three year period, an increase in female employment by seven percent and a formal provision for child care. Tied to the realisation of these targets there are beneficial fiscal and taxation measures, all planned to introduce more people and especially the female population into the market place. Strangely, the figures in the action plan and those in the contingency plan presented to the EU are different, with the local targets being far less ambitious.
Foremost amongst omissions in the plan is the failure to highlight sufficiently the problem that the public sector is over-manned.
This problem although mentioned en passant is not really tackled in this action plan. Any analysis of the country's finances would highlight the high yearly burden of the mainly unproductive public sector.
Immediate action needs to be taken to lessen this burden. There must be no more public sector employment except where the recruitment of specialised persons is really required. Persons retiring should not be replaced. Persons retiring should not be re-employed as consultants. Job creation must be directed towards the private sector. The creation of unproductive jobs in the public sector will not bring about growth, let alone sustainable growth. Malta’s public sector is costing the tax-payer a substantial yearly amount. Is the citizen getting value for its money? Government after Government has continued to fatten the public sector.
It is now time to bite the bullet here too. Too many citizens lament the fact that their hard earned tax money is being used to keep unproductive civil servants in their jobs. The plan should include a study on just how large a staff Government needs to function. It should examine the need for overtime payments in the half-day summer months. It should also consider whether half days should be retained during the summer, what levels of absenteeism exist, whether sick leave is abused, and - perhaps more importantly - whether civil servants give a full day’s work.
Are all these matters being monitored? The plan simply does not go into these matters and focuses on the infringements in the private sector which affect government finances adversely and the action it intends taking to counter abuse.
Accordingly, Government is right to enforce control on persons working with the private sector who do not register their employment. There is little mention however of persons who work for Government and do not manage more than an hour’s work! Productivity levels in the public sector gets little attention, barring a few fleeting references to greater centralisation of authority from the Public Service Commission to department heads; the results based accountability in the civil service and public entities as enshrined in the White paper on the Public service issued last year.
The plan should include what Government intends doing about public sector employment and productivity. There should be stricter monitoring and appraisal of productivity levels of all in the public sector and not just of the heads of departments and the Permanent Secretaries.
The plan is an excellent beginning. It may not be a magic wand as the Prime Minister stated, but if implemented together with the need to focus on the over-manning levels in the public sector it could go a long way towards creating an environment for the creation of new productive jobs.
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