Reforms to go ahead - Gonzi

The country’s planned reforms should not be postponed because of the current economic climate, Prime Minister Lawrence Gonzi said.

Addressing a conference “Post-Recession Scenario”, organised by the Malta Employers’ Association, Dr Gonzi said history showed that the Maltese always managed to transform threats into opportunities and an example of this could be seen in the EU and Euro membership.

Major sectors of the economy, such as tourism and manufacturing, were witnessing transformation and the key to success was to embrace change and reforms.

Employment remained a priority for the government and the g ainfully occupied increased in the last quarter of 2008.

Between January and April, the Employment and Training Corporation had 2,329 vacancies. The government embarked on implementing a strategy in partnership with employers and unions and 2,000 jobs were protected as a result. In return, the government got a commitment of retraining and investment in human resources.

Dr Gonzi pointed out that EU funds were being used for the benefit of labour demand and supply and there were three ETC schemes to this effect, which were expected to target 26,000 employees.

Other reforms were being undertaken to increase the people’s willingness to work. Apart from the income tax cuts there was the reform whereby pensioners could work and receive a pension. This saw an increase of 1,167 workers in the 61+ age bracket. Fiscal incentives for mothers to return to the labour market saw an increase of 1,309 in the past three years.

Employers should now draw up more family friendly measures to attract more people. Flexitime and tele-working, the Prime Minister said, were working in the public sector.

The number of self-employed had increased by 232 in the past 12 months and now stood at 17,150.

“It’s a difficult scenario, we were hit but not as hard as others... The time will come when there would be a turnaround... We have to focus on what is crucial to make a success out of every opportunity,” he said.

Opposition leader Joseph Muscat said that the necessary steps had to be taken to hit the ground running and be proactive rather than reactive.

Action which brought together employers, employees, the self-employed and students was needed

In an obvious reference to the social pact, Dr Muscat said that there were crucial issues on which consensus could be found.

“We have to really work together. It is high time that we really try again to forge a plan for the future... We need an agreement that goes beyond principles and beyond a five to 10-year period,” he said.

Dr Muscat said that the MCESD should be used better and should not be treated with arrogance and government bullying. For although all social partners were allowed to express their views, then, as in the water and electricity tariffs issue, there was imposition, forcing employers to make a choice between paying bills or their employees.

AD chairman Arnold Cassola said that the way the government was helping certain companies was “penny wise pound foolish”.

He criticised the government’s opposition to reducing VAT on restaurants saying that the money that would be lost in VAT revenue would still be invested into the economy.

He criticised the choice of a power plant that worked with heavy fuel oil. He said it was true that this would be 30 percent cheaper to run but what was its the social and medical cost? It was better to go for 30 percent higher and choose cleaner technologies, he said.

Finance Minister Tonio Fenech said expressed satisfaction at how Malta managed to contain the impact of the international downturn but said that people had to continued to be assisted through this global turmoil and the country had to be prepared for the opportunities of the future.

He said productivity was a key element that would ensure that Malta was able to compete internationally.

Medicine importer Reginald Fava pointed out that importers of medicines were still owned money by the government. He appealed for accounts to be settled saying that many were facing serious cash flow problems.

Dr Gonzi acknowledged that accounts were still with arrears for a number of years but said he had instructed the minister to come up with effective solutions especially at a time when cash flow was under extreme pressure.

Photo: DOI - Clodagh Farrugia O'Neill