Finance Minister Edward Scicluna yesterday blamed the statistical spike in public sector employees on new methodology used in collecting employment data.
Figures published recently by the National Statistics Office (NSO) showed an increase of nearly 1,900 government employees since the Labour Party’s election in March 2013.
Addressing a public consultation meeting in preparation for next year’s Budget at the Excelsior Hotel, Prof. Scicluna rejected criticism that the government was putting more people on the State payroll.
He said that under PN governments, the NSO used to classify some 2,800 workers, employed by the resources ministry to carry out public works, under the construction industry in the private sector.
However, these employees were now being classified as part of the government administration and hence the increase in size of the public sector.
“Unfortunately, the NSO is not giving a true and clear picture of the situation,” he said.
Unfortunately, the NSO is not giving a true and clear picture of the situation
He noted that in contrast to the same employment figures, which indicated a decline in the building industry, construction sites were “mushrooming” over the island.
He said the stable economic outlook given by credit rating agencies, most recently Fitch, was testament to the fact that the economy was doing well.
Touching on the health sector, which he described as a “bottomless pit”, he said the government was determined to enact the necessary reforms to get more value for money. He complained that the price being paid by the government to acquire medicines was up to twice as much their real value, raising questions on the procurement process.
On pensions, he said that the government was in talks with the World Bank to re-evaluate the current projections and draft a new model up to 2060.
The current economic reality was not in line with projections made a few years ago, as economic growth was higher than expected and the female participation rate had improved.
Consequently, pensions’ sustainability was not as precarious as it had been feared in the first place. For this reason it would not make sense to consider a further increase in the retirement age, Prof. Scicluna said.
Regarding the decline of six places in Malta’s competitiveness, which was revealed in the latest World Economic Forum statistics, Prof. Scicluna said the government had taken note of this.
However, the causes were down to certain issues such as red tape and excessive delays in court judgments, which previous administrations had not tackled.
“We are addressing these issues, and I invite the people to evaluate our performance at the end of the legislature,” he said.
Asked whether the government would consider an increase in the minimum wage, Prof. Scicluna replied that such a measure would dent the country’s competitiveness.
Yet, he noted, the cost-of-living-allowance mechanism had proved to be a good tool to adjust wages in line with inflation.