Caroline Muscat
Budget may be postponed
Chamber resisting 'unsustainable path'
The 2010 budget may be postponed to allow more time for discussion among social partners about the cost-of-living adjustment planned for next year, which employers say will seriously hurt business.
The possibility of an unprecedented postponement from the set date of November 9 was first revealed by the Chamber of Commerce, which yesterday expressed confidence that the government would delay the budget presentation to the end of the month. It follows the chamber's rejection of the "unsustainable" package of measures proposed on the grounds that it risked the loss of "hundreds of jobs".
When contacted, Finance Minister Tonio Fenech did not rule out a postponement. He said it was not ideal and that if the date were to be changed the decision would have to be made within the government's logistical constraints. However, he said he would be "looking into" the possibility.
Following the announcement last Sunday that all employees will benefit from a weekly €6.06 increase in cost-of-living adjustment (COLA) from 2009, the chamber said economic circumstances were not opportune for an "unprecedented COLA" without mitigating its adverse impacts with other compensatory measures.
A survey conducted among the chamber's members last September showed "hundreds of jobs would be at risk directly due to the cost effects of the COLA".
Most of the drop in employment is expected to occur in the tourism sector, followed by construction and manufacturing, according to the chamber.
Helga Ellul, President of the Chamber of Commerce, said: "We are concerned that things have taken this turn and that with a date for the budget announced so close in November, there remains very little time to discuss and negotiate ourselves out of this situation."
The chamber said its agreement with a 2010 pre-budget discussion paper presented by the government at the Malta Council for Economic and Social Development was dependant on the acceptance by the social partners of a number of proposals made by the chamber itself.
The chamber insisted it was not against the award of the COLA but it argued for a more balanced approach. Its proposals differed from those made by the Malta Employers' Association, which argued that the government should carry part of the burden.
The chamber is instead suggesting that the COLA should be granted as an allowance rather than as part of the salary, and also that it should be tax-neutral.
A moratorium on all government-induced fees and tariffs would also help offset the added costs of the COLA to business, the chamber suggested.
The chamber is also tying in the COLA to an increase in workers' productivity and argues that its mechanism should be reviewed by a pre-specified date.
"It is unacceptable for the social partners to be pushed towards an unsustainable path in terms of competitiveness and employment," Ms Ellul said, adding that the aim was to safeguard jobs.
The chamber insisted there should be a more structural approach that tackled inflation, competitiveness and COLA.
"One of our long-term proposals is to look at the COLA mechanism, to look at inflation - how it's all calculated - and to do that at the beginning of the year, not so close to the budget.
"That way we would have time to study the situation and the effect on competitiveness because they are all interlinked," Ms Ellul said, adding that a month before the budget was not sufficient time to make a serious attempt at this.
The chamber is recommending that the process of probing these issues should start immediately after the next budget to allow employers a proper perspective of the situation next year.
Referring to the economic recession, the chamber said: "In a time of uncertainty, we want certainty."
Reacting to the chamber's stand, the General Workers' Union said it was not acceptable for employers' organisations to repeatedly threaten job losses.
The union said, however, that it was prepared, as always, to take part in discussions aimed at maintaining competition and retaining jobs.
It said employers' organisations were always critical when the government gave an indication about the amount it would give as the cost-of-living adjustment.
The union expressed surprise that the chamber had spoken about a document discussed at the MCESD after it was agreed that it should serve as a basis for more intensive discussions with the government.
The GWU also had some reservations, but decided not to comment about them pending discussions with the government.
The union said the document stated black on white that COLA for 2010 should be given as in previous years.
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G. Fenech
Oct 23rd 2009, 11:20
I've said this on plenty of occasions before, and i wont stop repeating myself untill this is done.
We have no faith in the PN administration, we know that something is not right, and yet they stay in power doing as they please and making us pay for their lifestyle.
How is it that govt spending keeps on going up and up, and our increased taxes never seem to fill the hole?
WHEN ARE WE GOING TO AUDIT ALL THE POLITICIANS AND GOVT DEPARTMENTS TO SEE WHERE ALL THE MONEY IS GOING?
R. Mallia
Oct 22nd 2009, 09:02
With the ridiculous wages and minimum wage level in Malta, inferior to all developed European countries, I am disgusted that employers are so cheeky as to oppose a mere 24 EUR a month a third of which goes in taxes. The cost of living is much higher than 6.06 EUR a week and employees are increasingly unhappy at work!
maria curmi
Oct 22nd 2009, 07:48
Gejtu and Tony prepare for a general STRIKE if just 6 euros not given to workers
G .Mangion
Oct 21st 2009, 18:51
@ Manuel Micallef (3 hours, 51 minutes ago: True there was some mistakes that happened under MLP of those days. Some ? Why did you Not Commented on how at the mlp Some Mistakes, Were created by the red Regime ? for the benefit of the Klikka !!
To by these in the dark Days of the 70's & 80's, We all had to Pay EXTRA L.M For :
land - line Telephone = 50 L.m
T.V Set's more than 50 L.m
Chocolate bar's, at 2 L.m per Bar
and Even Cases of paying more than Hundreds of L.m for a Job !!! Ecc, Ecc.
Are you sure this is the right way for our beloved Malta ? ARE YOU SURE ?
Manwel, Hawnekk Nies bis - Sens hawn, Ghalxejn Tipprova Tghatti Xemx Bl-gharbiel !!!
Regards.
s.caruana
Oct 21st 2009, 15:33
Billi niposponuh ghal xi gurnata ohra l-budget x'ha jkun gara? l-importanti ma jkunux se jilaghbu l-Arsenal dak in-nhar u daqshekk, wara kollox il-budget is-sena kollha!
Manuel Micallef
Oct 21st 2009, 14:19
THE PROBLEM WITH ANTHONY CASTILLO, is that he has a big blue lense in front of his eyes.
True there was some mistakes that happened under MLP of those days. But MLP brought Malta forward to a civilised country - in terms of social welfare, investment opportunties and more.
I just name a few companies which started operating in Malta durign this period:-
SGS
AIR Malta
Mid Med
BOV
Baxter
Lufthansa
Play Mobile
Free Port
..... and you can go on and on.
If one had to remove these from the Maltese industrial landscape, there will probably be no civilised Malta.
The argument of "wage freeze" is just a petty argument - and by the way it is currently being discussed by the conservative party in the UK - to put wage freeze on all public sector employees in the UK.....
Anthony Mizzi
Oct 21st 2009, 12:18
Oh those were the days , when at least there were reductions in the cost of living.
Those were the days when there was true peace of mind for pensioners, widows, workers, persons with special needs, social housing, social welfare, peace of mind was only promised by Dr. Lawrence Gonzi ,his predecessor and agents in electoral manifestoes to gain and retain power.
Anthony Castillo
Oct 21st 2009, 11:59
In the years that when father christmas comes home during the budget of those years the presents was the reduction of prices in (cavalli biz zalza ikel tal qattus,laned incova bil melh u ilma,laned tal cornbeef tal bulkbuying mic CINA,u hafna ikel iehor inferjuri bil bulk buying)plus 6 YEARSOF FREEZING IN WAGES. Father christmas with an empty SACK.Those where the DARK DAYS mostly for the working class people BY THE TRAITOR (TRADITUR).
V. Borg
Oct 21st 2009, 11:42
The Budget is a thing of the Past.
Joseph Buttigieg Attard
Oct 21st 2009, 11:33
This is not just smelling a rat but smelling that many more fat rats that are crippling this most insecure Administration, at the expense of us all and our dear country! Where this GonziPN is driving our dear country no one can ever completely comprehend!
Furthermore, I see no point if presenting a BUDGET!
Since when any PN or GonziPN Administration respected a budget they presented?
We face new taxes throughout the year without any hint in a Budget presentation! No figures presented in any budget are ever reached and National Debt goes up and up! No set goals are ever reached and Public Expenditure rather then curbed, as always promised in any Budget, goes up and up!
The past behaviour of any PN or GonziPN Administrations demonstrates their political deceit and the presentation of a Budget is just waste of time and money at taxpayers’ expense!
M.Buhagiar
Oct 21st 2009, 11:20
GVERN TAL-QASSATAT.
Manuel Micallef
Oct 21st 2009, 11:13
Is this story about "Sant and Mintoff" an attempt to mask the Budget?
Pn have a habit of doing this - creating deviations whilst they impose taxes or face difficulties. Rumour has it that the budget is postponed not because of COLA, but because of dessent amongst PN ranks......
Alfred Grima
Oct 21st 2009, 11:07
I smell a rat!
What a coincident, and all this is happening when the Dr Lawrence Gonzi is facing stiff challenge from his MPs.
g.c.Forte
Oct 21st 2009, 10:52
In the seventies / eighties, we use to wait for the annual budgets, because it was like father christmas coming home. To day we are afraid when it is time to the annual budget ( because this government makes budgets every month ) because everybody knows that for every one the government gives,you have to give him three. So, it is better off without the annual budget.
B Sant
Oct 21st 2009, 10:30
it was the govt that escalated the cost of living when the rest of the world was worrying about deflation. So it would be imprudent for the govt to pass another burden on employers to match up for his own mistakes.
The solution should be lowering taxes, thereby giving more disposable income to people. After all before the election the same party stated that lower tax rates would increase economic activity and result in higher govt revenue. Or do economics principle change that often in this country?
C.Sammut
Oct 21st 2009, 10:26
Was nt all the information already known to Tonio Fenech ? and couldnt discussion among social partners taken place before? Or is this delay due to other issues?
Peter-John Salomone
Oct 21st 2009, 10:12
I hope that the Labour Unions do not budge on the issue of COLA and working time. If working time is increased (or equivalently holidays decreased) then the COLA will be no COLA at all, but simply compensation for more time put in.
Manuel Micallef
Oct 21st 2009, 09:53
Why do we have a budget at all, when the government will impose taxes throughout the year anyway?
Anthony Mizzi
Oct 21st 2009, 09:19
How can one make a country's supposed budget for a whole year with the related time-frames when one is even uncertain and take a firm decision on the date that it would be presented?