The opposition has warned the government not to use Air Malta workers as scapegoats when drawing up the national airline’s restructuring programme because of the dire straits that it had found itself in.
Speaking during the second reading of the Budget Measures Implementation Bill, opposition finance spokesman Charles Mangion told Parliament the airline employees had made the sacrifices that had been required of them. He pointed that although the government had frozen all jobs in 2004, it had engaged new employees later for political convenience.
The sum of €150 million of Air Malta’s reserve fund had been eroded because of the wrong decisions taken in the purchase of the RJ70 Avroliners and the Azzurra Air investment. He called for modernisation of the company’s management structure to be able to face the new challenges in the aviation industry.
Dr Mangion said Air Malta was reliable as a social entity to help macro-economic reform of other sectors, not just tourism. These also included the financial sector, the carriage of essential cargo to and from Malta, as well as the social aspect in carrying stretcher cases in emergency. It was therefore important to ensure the national airline’s existence.
He called on the workers to remain united.
Turning to workers’ skills, Dr Mangion said the government did not like to acknowledge that four out of 10 students left school without basic academic or technical skills. It tried to make people forget this reality by mentioning new schools. In this respect the Foundation for Tomorrow’s Schools had been more successful than the government by keeping its targets on completion dates and costs with eco-friendly schools featuring all modern technologies.
Ways needed to be found of how to reduce the number of non-skilled school-leavers and channel students to enter the sectors most needed in future. This would eventually lead to good jobs with high standards of living. Malta must have higher-skilled workers because low-skill enterprises were going to other countries.
Dr Mangion said such higher skills were needed in many sectors such as health, financial and engineering. But what did the Budget present to address such issues? The Budget had not even followed its own pre-Budget document.
There was also the element of national debt. The Prime Minister had referred to reducing it without any mention of the fact that in the last three years it had missed its own reduction targets.
In 2008 the government had missed its target by €220 million; in 2009 by €248 million; and in 2010 it appeared that the target would be missed by €153 million – a cumulative total of €622 million.
All this had been incurred in spite of the fact that Maltese banks had needed no bail-out due to their conservative operations.
There had also been a rise in capital investments in the last three years. The government said it had surpassed its targets on health, education and social benefits by €55 million, but that was acceptable in comparison to a target of €2,400 million.
Dr Mangion said the government’s target for capital investment had been €1,100 million, but it had actually spent just €800 million – more than €200 million short.
In the same period the government had saved €171 million on utility subsidies and about €80 million on dockyard subsidies. But in spite of all this it had overshot its target by €622 million. This meant the government had no control over its overruns.
The Auditor General’s report for 2008 had shown up overruns of €14 million on roads, €2.5 million on boundary walls and €23 million on Mġarr Harbour. There had also been losses of €40 million on the Fairmount contracts and €23 million on land at Qawra that used to belong to Maltacom. A €6 million contract for security at Mater Dei Hospital had been given by direct order, effectively paying people not to do anything.
Now there had been the declaration by former Works Minister Ninu Zammit that the water management plan, originally calculated at €70 million, was now estimated to cost €440 million. There had been no disclaimer of this by the government.
Dr Mangion said that 10 years ago the Public Registry had been privatised, with quality that had left a lot to be desired. Fifty government employees had been transferred to the private company running the Public Register. In those 10 years the government had paid €23 million for researches and raked in just €900,000.
There was a difference between reducing and controlling public spending. The Public Registry saga had been another mistake in the privatisation process, with the taxpayer getting the worst of it. Did the government really want to reduce overruns?
In a 2009 report by the Auditor General on Procurement Capabilities Across the Public Administration, Mepa had said that public procurement had been 18 per cent of GDP. The report had also analysed how benchmarks could be made to enhance public procurement, making it more efficient by reducing spending.
Dr Mangion asked what parts of this report had been implemented. According to the Budget, reducing public spending would consist of the setting up of committees and reports by permanent secretaries. If the government was serious it should first say if it agreed with the report, and if it was sustainable and achievable. But there had been no reaction from the government.
There were great differences between the government’s aims and its own estimates. If the government wanted to make progress, it should say if the analysis in its own pre-Budget document made sense. There must be clear direction. Spending could be controlled, not least by ensuring that performance bonuses would be awarded only if targets were achieved.
Concluding, Dr Mangion said Malta needed a strong pair of hands that knew where they wanted to arrive. Unfortunately, the real challenges were not being addressed.
Robert Arrigo (PN) said the Maltese were conscious that they were faring well in the current global economic scenario. While many other countries were taking various austerity measures, stipends in Malta were still guaranteed.
The government was taking the necessary actions with regard to ARMS Ltd, and things were improving.
With regard to the VAT increase on tourist accommodation introduced in the Budget, Mr Arrigo noted that Rome had just announced an overnight accommodation tax of between €2 and €3 a day.
Turning to Air Malta, he noted that currently the national airline was serving 76 routes, but it had to find ways to be competitive. There had been a lot of blame-shifting with regard to the 250,000 unsold seats. This issue had to be tackled.
He believed the airline was not in a position to offer free flights, not even to MPs. It had to reduce seat prices in order to be competitive.
The current rumours on the company were not helping the situation.
He concluded that this was a responsible Budget, and it was important that all worked together to keep improving the situation.
Nationalist MP Ċensu Galea emphasised the importance of education in preparing students to be able to cope with everyday needs. Thousands were attending Mcast courses to undertake jobs in sectors which had developed over recent years, such as the IT and aviation sectors.
He called on young people to continue their education after the age of 16. Some 3,000 students had just graduated from university, showing a sharp increase over the last 25 years. Another 3,000 had applied for the large number of university courses on offer. He said that people with very low education levels were prone to spending their lives in difficult circumstances.
Mr Galea said that research was important for the country’s development and innovation. Collaboration between the public and private sectors was essential in research. The government was providing financial incentives through scholarships, and the expenditure of €330 million in education was an investment in Malta’s future.
He emphasised the importance of safeguarding and enhancing the environment, calling on everyone to separate waste because there were still thousands of tons of waste which could be recycled.
The government was trying to raise awareness against vandalism. A number of campaigns encouraging people to plant trees were also under way.