Edward Scicluna is being urged to be bold in cutting Government expenditure but the Finance Minister is also being warned to be careful not to hurt the vulnerable.
These messages came across yesterday during a pre-Budget consultation business breakfast where Prof. Scicluna emphasised the Government’s drive to review public spending.
As they sipped coffee and ate fried date pastries, Prof. Scicluna told representatives of NGOs, businesses and unions that the spending review would be conducted across the board.
Unless we change we will continue to have hospital queues and children without learning support
“We will also look at the politically sensitive areas as well but unless we change we will continue to have hospital queues and children without learning support assistants,” he said, adding the public service had to “cut the dead wood”.
It was the second time in a week that Prof. Scicluna harped on about the importance of cutting costs by changing practices that may be irrelevant to today’s needs.
He asked whether it made sense to have schools in prime locations that were only half full because of a declining student population.
“There are powerful forces pushing to continue doing things as we have always done. But we cannot allow this to continue. We can cut expenditure and it requires training, which we are undertaking with people in the public service,” he said.
The minister’s remarks earned him plaudits from Vince Farrugia, director general at the Chamber for Small and Medium Enterprises, GRTU.
“I urge you to be bold and remain first and foremost an economist and not become a politician,” Mr Farrugia said, welcoming the fact that for the first time the country had an economist controlling the public purse.
“We have often spoken of the economy with your predecessors but ended up with political compromises,” Mr Farrugia said.
But after the words of praise came a cautionary note from Equality Commissioner Renée Laiviera.
She said any expenditure reviews, even if unintentional, may have a bigger impact on the vulnerable categories of society, so great care had to be taken at planning stage.
It was symptomatic of the balancing act Prof. Scicluna has to face when drawing up the Budget for next year, which will be his second since taking office.
He acknowledged the difficulty when speaking of pension reform. With the Government intent on introducing incentives for people to take out private pensions – third pillar pensions – Prof. Scicluna said this would not benefit minimum wage earners.
“It is intended to maintain the momentum of the reform process started some years back.
“Third pillar pensions exist elsewhere and we will not be reinventing the wheel, but it is obvious that they are not the only solution because people on the minimum wage will not benefit,” he said.
Taking the cue, General Workers’ Union general secretary Tony Zarb urged Prof. Scicluna to discuss any developments on pensions at the Malta Council for Economic and Social Development before going public with the proposals.
Mr Zarb also raised the issue of foreigners who were being employed under precarious working conditions.
The comment put him on a collision course with Malta Hotels and Restaurants Association president Tony Zahra who insisted foreigners were being employed in the tourism sector because Maltese seemed unwilling to do certain jobs. He insisted some children were leaving school with “zero education”.
Mr Zahra refuted the label of “precarious” jobs, insisting instead on drawing a distinction between legal and illegal working conditions. “We are against illegal conditions, but low pay – if within the legal parameters – is not one of them.”
Mr Zarb rebutted the statement, saying there were hoteliers who employed foreigners for trial periods without paying them.
Addressing the controversy, Prof. Scicluna said lack of proper education, precarious jobs and the mismatch of skills in the labour market were all linked and the Government had to develop initiatives that addressed these problems.
“These are not black and white situations,” he added in a moderating tone.
ksansone@timesofmalta.com