Former prime minister Lawrence Gonzi. Photo: Darrin Zammit LupiLawrence Gonzi is unrepentant about the decision taken in 2005 to stop public holidays falling on a weekend from being added to vacation leave.
The former prime minister is urging the social partners not to be complacent as he weighs in on the General Workers’ Union’s proposal to reverse that decision.
The unpopular decision was taken unilaterally by the government during Dr Gonzi’s first year as prime minister after talks for a comprehensive social pact between unions, employers and the State failed to deliver a reform package.
The Labour Opposition voted against the legal changes in Parliament, and the GWU was at the forefront of criticism on the decision, which removed an average of four additional days of vacation leave per year.
Finance Minister Edward Scicluna, then an adviser to the GWU, even described government claims that the measure would increase productivity by around 1.5 per cent as flawed and “a childish attempt at economic estimation”. But Dr Gonzi’s government ploughed on, changing the law so that public holidays falling on a weekend were no longer added to the annual leave entitlement.
For the past three years, the GWU has consistently called on the Labour government to reverse that decision. In immediate reactions to the suggestion presented by the union in its Budget proposals, employers asked for the debate not to be re-opened.
We absorbed the shock created by oil hitting $148 a barrel and worked our way out by sheer hard work and some tough decisions… The results speak for themselves
Asked for his views on the matter, Dr Gonzi said the decision in 2005 was “an important part of a wider strategic goal designed to increase economic competitiveness”.
Malta was then in only its second year of EU membership, and with the Gonzi administration wanting to join the euro, the government was constrained to curb the deficit so as to reach the Maastricht criteria.
A year before that, VAT was increased to 18 per cent from 15 per cent and new revenue streams, such as an excise tax on mobile phone usage, were introduced in Gonzi’s first Budget as finance minister.
Increasing competitiveness was seen as a way to encourage economic growth that would leave more tax revenue, while creating jobs.
“We knew that this measure alone generated an increase of two per cent to our productivity. This meant more investment and, therefore, more and better jobs. This decision also allowed us to come in line with the Maastricht criteria, which meant that we could adopt the euro by January 2008,” Dr Gonzi said.
He noted that the public holidays decision was one of the measures taken that helped the country weather the storm created by the global economic and financial crisis that hit between 2008 and 2013.
“We absorbed the shock created by oil hitting $148 per barrel and worked our way out of the crisis by sheer hard work and some tough decisions… The results achieved speak for themselves,” he added.
The GWU has insisted that economic conditions have changed and workers should be given back what was taken away from them 11 years ago.
But Dr Gonzi is unfazed by this argument. He said workers in other countries had faced tremendous suffering as a result of the global economic crisis.
“Millions of jobs were lost and wages, pensions and social services were cut. I appreciate the role of the constituted bodies in Malta, but I urge everyone not to be complacent and to benefit from the lessons learnt from others who preferred to resort to populist strategies and politics,” he said.