Employment sector 'revolutionised'

Education Minister Louis Galea said on Friday that the government had revolutionised the employment sector and was showing it knew where it was heading and what it wanted to achieve.

Speaking in parliament on an opposition motion on the employment situation, he said that the government had created the services sector from nothing, tripled part-time work in 10 years, trimmed the public sector by eight per cent and raised the labour sector participation rate from 54 to almost 60 per cent.

This government had improved the infrastructure needed for investment, such as the communications sector.

The Labour Party had had its chance to contribute to this change, but in its two years of government, it failed. He would not say that the present government did not make mistakes. The government shared the hardship of those workers who lost their jobs.

This year and last year showed an acceleration of economic restructuring due, among other things, to a global economic slowdown. Furthermore, with Malta having decided to join the EU, tough decisions had to be taken now so that the country would be able to embrace the opportunities which EU membership presented.

The government was not happy with the current situation and was working hard to get Malta out of it as soon as possible. He was sure more jobs would still be lost, but the creation of new jobs to replace them and boost economic growth was already being seen.

And it was worth pointing out that unemployment levels were basically at the same level as at the time of the Labour government.

The present government was tackling the employment situation through higher investment in worker training and restructuring of the public service, which was also essential for private sector growth. Important reforms had been carried out in the education system, notably in vocational training, where MCAST was set up.

EU membership was important for job creation as it meant access to the huge European market for Maltese exports and the provision of €86 million in financial assistance over the next three years, which would go for economic growth. Indeed, Malta, even during the accession process, was already working within the European Employment Strategy.

The National Action Plan for Employment would seek to bring closer coordination between all sectors of the government while also seeking to raise labour participation, including that of women, encourage further training and boosting entrepreneurship. It was hoped that a process of dialogue within the MCESD would be completed by May so as to set guidelines for the years to come.

The government, Dr Galea said, clearly knew where it was heading and what it wanted to achieve.

Prof. Josef Bonnici, former economic services minister, said investment in the first nine months of last year reached Lm35 million, double the figure for the comparable period in 1998, when Labour was in government. Some 3,500 jobs had been created in the past few years, whereas under Labour jobs only increased by 81. Unemployment now was at the same level as in 1998. It needed to be reduced, but the situation was not disastrous. True, the economy was not growing as fast as one would hope, but one needed to consider the situation all over the world.

Prof. Bonnici said the depreciation of the dollar against the Maltese lira had hurt Maltese exporters, such as textile firms. Yet a strata of companies had expanded, including pharmaceutical and medical companies, Dowty, de la Rue, Lufthansa Teknik, which opened last year and was continuing to grow, and Methode, along with smaller companies like AC cars, which was recruiting people. All this showed that the situation was very different from the way the opposition was painting it.

Tourism Minister Francis Zammit Dimech said the opposition wanted the people to believe there was a crisis in tourism in Malta.

But whereas, according to World Tourism Organisation figures, tourism dropped by 1.2 per cent worldwide last year the decline here was of 0.6 per cent and tourism earnings and bed nights rose.

Indeed, stakeholders had continued to show their confidence in the sector through new investment to the tune of Lm50 million in 10 projects including new hotels and extensions, apart from an investment of Lm170 million in the Cottonera project, the cruise liner terminal, and the Tigne' Point/ Manoel Island project.

People tended to forget that the 450-room InterContinental opened only a year ago and would recruit more people. Le Meridien were about to open another hotel at St Julian's. A large new hotel was being built at Ghajn Tuffieha, the Fortina had doubled in size, the Mercure Selmun and several other hotels were expanding, including a Lm1 million investment by San Lawrenz Resort, while the Westin and the Grand Hotel would spend Lm500,000 each. The Cavalieri Hotel would also reopen.

The government and the MTA were placing greater emphasis on conference and incentive travel. Several leading companies were holding the worldwide launching of their products in Malta, such as Nike and the relaunch of tour operator Frosch.

Parliamentary Secretary Edwin Vassallo said Opposition speakers could hardly speak about job creation and investment, given their failure when in government. It was worth recalling how under Labour, the VAT rate of 15 per cent was replaced by a cumbersome tax of 21 per cent. The power and water rates went through the roof, as did public debt, while consumer demand dropped.

Under the present government competitiveness had been raised, to the extent that the World Economic Forum placed Malta in 19th place among some 250 countries.

Contrary to what the opposition said, the government was keeping a close watch on market developments. Following the VAT increase, some businesses had decided not to raise their prices by three per cent, so as to attract customers. Others, however, had sought to abuse with price increases well above three per cent, which the government would investigate.

The unemployment rate in Malta, at 5.2 per cent, was lower than in Japan, Canada, Germany, France, Italy and the UK. But how high would it have been had Malta not decided to join the EU?

The present government had a track record of job creation and of improving working conditions. Workers now refused overtime. Under Labour there was a wage freeze, which some in the opposition wanted to return to.

Jason Azzopardi (PN) said there was no doubt that Malta, like other countries, was facing the challenge of competitiveness.

It could not compete with the cheap labour of China, where wages stood at Lm10 to Lm20 a month. What it needed to do, therefore, was to attract value added concerns, and this was the work being undertaken by Malta Enterprise.

He was pleased to note that rather than spreading its investment promotion net too widely, the agency was focusing on particular areas which appeared particularly attractive, such as pharmaceuticals.

A key ingredient for investment was certainty, and that was what EU membership would bring for Malta.

Tonio Fenech (PN) said the motion moved by the opposition was alarmist, and aimed at souring the investment climate. The motion was not only inaccurate but deceptive, because alternative jobs had been created in the services sector to make up for job losses in other sectors.

The Labour Party spoke about the need to create jobs, but was showing very little in the way of ideas.

MLP documents spoke of the need for stability while at the same time the MLP was trying to create instability by giving the impression that there was a crisis.