The country had to restructure if it wanted to hit the ground running once the economic turmoil passed or otherwise, it would just hit the ground, Prime Minister Lawrence Gonzi warned business people yesterday.
Now was a time to carry out the necessary reforms so that the present challenges were converted into opportunities and taken advantage of once the crisis was over, he told a conference, titled A Post-Recession Scenario For Malta, organised by the Malta Employers' Association.
"The time will come, hopefully not too far off, when the current downturn will be reversed and an upswing in the global economy will take place. This is not a question of if but when. Optimism and confidence are important ingredients for a recovery," he said.
Employment remained a priority for the government, and the gainfully occupied had increased in the last quarter of 2008 when global economies started suffering.
The government had embarked on implementing a strategy, in partnership with employers and unions, that had safeguarded more than 2,000 jobs. In return, employers had committed to retrain human resources and invest further.
Dr Gonzi said EU funds were being used for the benefit of labour demand and supply and there were three Employment and Training Corporation schemes targeting 26,000 employees.
Apart from income tax cuts, pensioners could work and still get their pension - this saw an increase of 1,167 workers among those aged 61 and over. Fiscal incentives for mothers to return to work meant an increase of 1,309 over the past three years.
He urged employers to implement more family-friendly measures in order to attract more people. Flexitime and teleworking had succeeded in the public sector.
The number of self-employed had increased by 232 in the past year, reaching 17,150.
Opposition Leader Joseph Muscat had similar advice and said the necessary steps had to be taken to be proactive rather than reactive.
Employers, employees, the self-employed and students had to work together on a plan for the future. In an obvious reference to another attempt at reaching agreement on a social pact, Dr Muscat said there were crucial issues on which consensus could be found.
"We have to work together. It is high time we really try to forge a plan for the future again. We need an agreement that goes beyond principles and beyond a five- to 10-year period," he said.
Dr Muscat said the Malta Council for Economic and Social Development should be better used and not be treated with arrogance and subjected to "government bullying".
Although all social partners were allowed to express their views there was imposition such as in the case of the utility tariffs, forcing employers to make a choice between paying bills and retaining their employees.
Alternattiva Demokratika chairman Arnold Cassola said the way the government was helping certain companies was "penny wise, pound foolish".
He criticised the government's opposition to reducing VAT on restaurants, saying the money lost in VAT revenue would still be invested into the economy.
Prof. Cassola criticised the choice of a powerplant that worked with heavy fuel oil. It was true this would be 30 per cent cheaper to run, but what about its social and medical costs? It was better to choose cleaner technologies.
Finance Minister Tonio Fenech said companies should not take short-term cost-cutting measures because this could be detrimental to their business once the world shook off the effects of financial turmoil.
He said employers should look at the broader picture and introduce measures to improve productivity while investing more in human resources.
Medicine importer Reginald Fava took the opportunity to remind Dr Gonzi that medicine importers were still owed money. He appealed for accounts to be settled, saying many faced serious cash flow problems.
Dr Gonzi acknowledged the problem and said he had instructed the ministers responsible to come up with effective solutions.