Hurray, the uncertainty which was building amongst the leading socio-economic stakeholders came to an end as last week the pre-budget document ‘Creating Opportunities, Not Dependencies’ was released
Aprocess of consultation at the Malta Council for Economic and Social Development between the social partners and civil society is promised to take place before the budget for 2015 is announced later this year. Let’s hope this consultation process is for real. A consultation process, unless it is used as a smoke screen or to water down political gaffes, is normally a positive exchange of views and held prior to decisions are taken. Lately, the meaning of consultation has been turned upside down.
The pre-budget document is not launched in isolation. It is always launched against a local and international socio-economic backdrop. This year the Global Competitiveness Index of the World Economic Forum showed that Malta has slipped six places to 47th position in the world index and lost five places among the 28 EU member states to the 19th place. Malta has registered decreases in the competitiveness index in technology, health, education and finance.
The National Statistics Office produced a set of figures on Income and Living Conditions for 2013. Figures show that people at risk of poverty increased from 15.1% in 2012 to 15.7% a year on. 31,570 males and 33,296 females are at risk of poverty.
A marginal increase over the previous month was registered in the number of unemployed in July 2014, reaching 6,834; nonetheless, when compared with the same month last year a decrease of 464 persons registering for work was marked.
Against this backdrop, the prebudget document is expected to take measures to address these issues, and more. These are amongst the real challenges for the political party entrusted with the role to make a difference, improve the standard of living and enhance the quality of life of the people. When the lights are switched off and party flags are folded, politicians are expected to deliver the promised goodies.
The title of the pre-budget document, ‘Creating Opportunities, Not Dependencies’ indicates that a number of initiatives will come into force with the aim of increasing the number of people in employment. Putting people at the very centre for next year’s budget is encouraging.
The business community has already bagged a water and electricity tariffs reduction for next year. This will follow domestic consumers’ water and electricity rates revision which came into effect earlier this year. As a result of this reduction, one looks forward to a decrease in the number of persons at the risk of poverty while, hopefully, the much-anticipated decrease in water and electricity rates for business will improve profit margins, create new employment opportunities and reverse the decline in Malta’s competitiveness index. We will see the result of this in a year’s time!
By now, Minister for Finance Edward Scicluna and his team of experts have exhausted discussions and negotiations, save some minor details and instructions from the Prime Minister, with 13 Ministers. Some of the privileged parliamentary secretaries, who may have access to the national coffers more than their colleagues, would have also done their sales pitch. All must have pushed their case with great ability and used their persuasive skills to the maximum to impress the Finance Minister.
Understandably, had ministers responsible for finance accept all proposals from their fellow colleagues, the Red China Dock would not be large enough to store the billions of euros necessary to finance all proposed projects. Though lately China seems to have become a sponsor!
The consultation document ‘Creating Opportunities, Not Dependencies’ proposes the targeting of welfare dependency by creating incentives that encourage people get off state benefits. The Budget for 2015 also aims towards a growth-oriented strategy and fiscal sustainability while strengthening competitiveness. All commendable. One, however, has to look at what measures will be taken to ease the fiscal pressure created by welfare, health and education.
One would hope that government will indeed help people at the risk of poverty. As a first step, government may take corrective measures in favour of cleaners, care workers, security officers and others engaged with service providers mostly on definite contracts of employment. If anything, government is the culprit. Government still issues calls for tenders that hardly cover the minimum wage but then, without any shame, shifts its wrongdoing onto service providers. While at it, I suggest that government should look at the setting up of temping agencies rather than farming out these services. This would indeed make a difference to the quality of life of workers and improve their take home pay. Service providers will then have to compete on efficiency, accountability and professionalism in executing their obligations and proper administration rather than on low costs.
This is the time when political parties, colours, beliefs, economic theories, figures and statistics will become irrelevant if people’s lives are not improved.