Postponing the 2010 budget would send the wrong message, the head of the Chamber for Small and Medium Enterprises – GRTU said yesterday, insisting the economy was calling for decisions to be taken not delayed.
Vince Farrugia, the chamber’s director general, was reacting to the proposal for a postponement made earlier this week by another of the leading business organisations, the Malta Chamber of Commerce, Enterprise and Industry, to allow more time for discussion about next year’s cost-of-living wage adjustment. The Chamber of Commerce rejected as “unsustainable” the package of measures proposed on the ground that a €6.06 wage increase risked the loss of “hundreds of jobs”.
The Finance Minister has said he is considering the request. The budget is set for November 9.
“The social partners will not be writing the budget for the Finance Minister. Ultimately that is his responsibility and postponing the budget would achieve nothing,” Mr Farrugia said.
It was good the government was listening, he added, but at the end of the day it was Tonio Fenech who would have to take decisions. The Malta Council for Economic and Social Development will meet twice next week during which the social partners are expected to agree on a common position.
Economist Gordon Cordina was entrusted to meet the different stakeholders and draw up a common position.
However, the final document is expected to be a watered down version of the “bold” steps employers are asking the government to take in this recessionary period.
“While Gordon Cordina did a sterling job, finding common ground at the MCESD means that the respective positions are heavily diluted. Postponing the budget will get us nowhere. The worst is still to come and unless we gear ourselves for the post-recession period, which will be very competitive, Malta will lose out big time,” Mr Farrugia insisted.
He reiterated his organisation’s call for public spending cuts, where no expenditure would be considered a “sacred cow”.
The forthcoming budget will see the Finance Minister trying to perform a delicate balancing act as he attempts to trim the deficit while using public funds to stimulate the economy. Proof of the delicate nature of his task is the stern warning issued by UĦM general secretary Gejtu Vella who said his union would refuse to discuss COLA compensation in isolation.
Unions have insisted employees be given the full compensation, which is based on the inflation rate in the past 12 months.
They argue the government should fork out half the expense, estimated at €12 million, for private employers, given that the high inflation was primarily caused by its decision to increase water and electricity tariffs.
ksansone@timesofmalta.com