Malta should capitalise on opportunities by developing Islamic banking, the Malta Employers' Association is proposing in a memorandum to political parties.
In its memorandum, presented to the media yesterday, the MEA says the proposal would complement Malta's strategy of a centre for excellence in the financial services.
"MEA members report there is mounting interest in many Arab countries to use Malta as a hub for financial services. This will have a synergetic effect with the SmartCity project that is attracting considerable attention in Middle East countries," it said.
Association president Pierre Fava said the MEA was recommending that, during the next legislature, the party in government should base its policies on sustainability, competitiveness and pro-activity.
The memorandum states that the government should set a balanced budget as one of its short-term fiscal targets. Public employment should be cut to 27 per cent of the total labour force.
The management of the fiscal balance should aim to control expenditure while generating revenue arising from increased economic activity, rather than added taxation.
Fiscal policy decisions had to be assessed in terms of their economic impact before implementation and should be preceded by consultation with the social partners. Tax systems should be simplified and unambiguous and the consolidation of government finances should remain a priority.
On the welfare system, the MEA said this should be designed on the basis of affordability. Although a gradual raising of the retirement age and social security contributions was inevitable, the introduction of the second-pillar pension should not become mandatory.
Welfare benefits should be available only to those who genuinely needed assistance. Efforts to control abuse should be continued and training for registering unemployed should be mandatory, particularly to those who claimed to be illiterate or unskilled.
The MEA said it was against the idea of reversing the decision regarding public holidays falling on weekends, as proposed by the Labour Party, whereby such holidays would be added to one's leave entitlement.
The decision to supplement the cost of living adjustment with an additional wage increase as announced in the last budget was inflationary and set a dangerous precedent which political parties should never repeat.
It called for the formulation of a national human resources strategy to match labour demand and supply. The labour market also had to be flexible to cater for the different needs of employers and employees through a legal framework that allowed for atypical work arrangements, such as temporary agency work.
Mr Fava warned that labour cost increases that resulted from labour shortages, rather than through enhanced productivity, could be detrimental to Malta's competitiveness.
The MEA also referred to Labour's proposal on the introduction of a reception class, saying this was too generic and treated all students as a homogenous mass irrespective of ability and social background. A better idea could be to extend school hours and offer facilities and added tuition to students who required special attention.
The Business Promotion Act needed updating to reflect the economic restructuring that Malta was passing through.
The port reforms did not live up to the expectations of the business community and many companies reported that port charges remained too expensive. There was also need for a weekly shipping service to the UK.
On the MCESD, the MEA said this should retain its role as a consultative body from which the government could seek advice and constructive recommendations.