The Malta Independent 26 May 2024, Sunday
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Rejection of jobs by Maltese ‘does not mean solution is to create slavery’ – PN MP

Kevin Schembri Orland Sunday, 18 June 2023, 08:30 Last update: about 12 months ago

Just because there are jobs the Maltese people don't want to work anymore, "doesn't mean that the solution is to create slavery in Malta”, Nationalist Party spokesperson for the economy and Air Malta Ivan J. Bartolo said.

In an interview with The Malta Independent on Sunday, Bartolo raised concerns about the low wages third country national workers earn.

He stressed that the PN wants a change in the economic model, to transition it to a value added approach.

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“Does this country have a laid out, documented economic vision? We don't. In 10 years, what we've seen is a failed blockchain attempt and the sale of passports,” he said.

The only measurement being used in the country is “has the economy grown?” he added. “Trees grow and some trees grow in the wrong direction, like our economy is growing in the wrong direction."

One reason Bartolo gave for making such a statement was population density. "The national census shows that the population has grown by 100,000 people in the last 10 years,” he said, attributing this to the number of foreign workers that had to be brought to the country.

“That is the basis of this government's economic model, which was launched years ago by Clyde Caruana when he was in charge of Jobs Plus. Today, he is gentleman enough to come clean and say it needs to change, that it’s the wrong model, and he has my full respect for that. There's nothing wrong with making a mistake in life. The biggest mistake is either doing nothing or digging your head in the sand.”

Bartolo expressed concern at the wages third country national workers in Malta are paid. He quoted some statistics that were tabled in Parliament, which showed that in 2021 there were 37,688 third country nationals working in the country – 10,660 of these people were listed as earning under €10,000; another 10,509 third country nationals earned between €10,001and €15,000, he said. “So we have 21,000 third country workers earning below €15,000.”

“Regarding those who earn €10,000, do you know how much they would have paid in tax each week? €2.60, and God forbid they would be made to pay more on that income. That's €135 in tax per year and they also pay their social contributions. So we had 10,000 people in Malta who needed to rent, eat, send money to their families back home and the net pay they earned was €655 a month. How can we expect poverty not to rise? Do we really expect quality of life to improve?”

“We've seen photos where bedrooms are converted into rows of bunk beds. Today it’s not even about the number of beds, but the utilisation of beds, where a person sleeps, wakes up and takes their sheets with them as another shift will need that bed. Is that the Malta we want to live in? Is that the Malta that will inspire our youths?"

“I understand why the Maltese don't want to work certain jobs, but in God's name let’s remain a European country with a clean conscience; a country which is not creating modern slavery.”

At the other end of the groupings, he said that there were 334 third country national workers who earned between €60,001-€90,000. “The net effect economically of one such person is equivalent to six-and-a-half of the others."

Then there are the key services, such as healthcare, transport, justice, “these have all been impacted. The way the population has been growing, there is obviously a strain on all services".

 

The economic model

He turned to Malta's national debt. "It is rapidly growing. In 2013 it was €5.27bn. In 2022 it was €9.03bn."

"At an effective percentage rate of 2.2%, this country pays €542,000 per day in interest."

"We also know that by the end of this year, the national debt is forecast to stand at around €10bn. I believe that it will be higher as the Air Malta scenario has not been taken into consideration."

What Economy Minister Silvio Schembri had said that the model just needs to be tweaked, is wrong (…) It needs to be reinvented, but there needs to be a transition, he said.

"A strong economy is the source of national strength, but the strength of the economy is not about whether it is growing by 5% year-on-year. The strength of the economy equates to the wellbeing of the country and we all know where the wellbeing of this country is heading. I haven't gone into issues like mental health as I am no expert. I haven't yet mentioned that 70% of youths want to leave Malta. I haven't mentioned that there are many families doing their best to acquire property overseas just to find open space. We know all this. We need to have a strong economy that can create value added employment opportunities and that can also produce the revenue we need to deliver a good quality of life for our citizens."

The PN's vision for Malta, he said, "is built on solid ground”. The key, he said, is the transition to a value added economy.

“What economic sectors has this government created over the last 10 years? None."

Instead of importing thousands of more workers than Malta already has, he said, they would from now on focus on attracting a smaller amount whose skills are required.

Malta must ensure that it invests in current industry sectors, while creating new ones, he said.

"We need to stop bleeding funds. We need to reduce costs by looking at how many persons of trust we have, by improving planning and project management... how often are we repeating work on infrastructure? We need to incentivise the private sector. We need to put a stop to corruption and ensure we attempt to recover funds from such activity."

 

Proposal

The government needs to wake up, he said. "We have another four years in Opposition. God forbid Malta needs to wait for the Nationalist Party to kick off this plan. We need to do this now."

“What we propose is an eight-year programme, where two billion euros will be invested as a transformational fund. €1bn will be direct investment and industry will then raise more funds over the eight years. In those eight years, the aim would be to invest in the current proven industrial sectors we have and in 10 new economic sectors, creating 32,000 new jobs. Those jobs, if placed at a value of an average salary of €45,000, will provide huge GDP input." The 10 sectors the PN previously said that it wanted to create in Malta are: Metaverse-driven investment; Compliance and due diligence services; Specialised manufacturing clusters; 3D printing; Artificial Intelligence applications; E-sports; Video gaming; the sports industry in general; Energy optimisation and Global profit with purpose/social enterprises.

Told that this would require Malta attracting even more workers to the country, he said that it is more about reskilling and upskilling the current workforce.

“How many people in Malta are trapped, who didn’t think about studying until it was too late and are stuck in jobs being paid €20,000, unable to take a year off to learn new skills? There are many clever people in Malta who are financially trapped and if the government invests in them, together with the private sector, we could create better project managers, business analysts so on and so forth.

"I'm not saying don't bring in any workers at all,” he said, explaining that foreign workers with the skillsets required in the new sectors would need to be brought in. “As we had done when the Management Systems Unit (MSU) was created under Eddie Fenech Adami, when we brought in people from Canada, America, the UK and South Africa. They were in Malta on a two/three-year contract and their objective was to transfer their skills to the locals, to impart their knowhow. When they left the Maltese took over. We created a future for the country... that was a vision, that was a model."

He was told that there are employers who cannot afford to pay higher wages in Malta, who cannot compete with the gaming sector that offers high wages, yet these employers might provide essential services. "This is where we need to hold a serious debate. This is why many stakeholders in the MCESD are talking about what the bottom wage should be and how wages are increased. This is why we said there needs to be a fund of €40m that will be revised yearly, to assist SMEs that import and export goods. If we reduced their costs then they could increase wages."

"There are solutions. You could do a lot in Malta when you are creative.

He said he doesn't mind working with Economy Minister Silvio Schembri, but criticised the Labour Party over its reaction to the PN's proposed 10 new economic sectors. "The Labour Party said 'we already have a 3D printing industry' for example. We don’t. There are three or five companies that have a couple of 3D printers and are using them, but that doesn't make it an industry.”

The creation of the sectors would entail upskilling and reskilling of the workforce, “meaning that the University of Malta and MCAST would need to be brought on board”.

"We would need to have public-private partnerships and provide people with the opportunity to leave work for a year to a year-and-a-half, finance their salary and provide them with the opportunity to jump to a higher skill level in order for them to be able to work in these new sectors."

Malta would also need to brand and market itself.

"We need to go and talk to all the corporates innovating in the metaverse space."

"What is Malta known for at the moment? The assassination of journalist Daphne Caruana Galizia still being an open case, Malta having been on the grey list, corrupt deals. That is what we are known for. We need a huge marketing and rebranding exercise and we need to create our unique selling proposition; we need to attract companies like Google to come here.”

“The question is, how are we going to attract them? Our tax regime is changing, so we need to ensure that we can attract them by having the skills they need in Malta. We will also need some tax incentives and while this could be impacted by the tax regime changes one could still say, for instance, that for the first two years of operation the government would subsidise part of the employees’ salaries."

Turning to startups, he said that the mentality in Malta is that money is all that such companies require, providing them with financial instruments or an office somewhere. "If we really want a startup culture, the first thing government needs to do is become a customer of those startups.”

The PN, he said, would create a skills bank for professionals in retirement through Malta Enterprise.  "An 18- to 25-year-old starting a new business doesn’t need money first, they need guidance. The government would pay those people and, in return, could have equity in that startup."

"The government, he said, would also create a strategic investors group in Malta made up of successful entrepreneurs. That way, when startups take off, the government would exit the strategic investment and the strategic investors would then come in."

"We also need to help startups establish themselves on the market," he said. "We need a government that thinks, that creates, that is innovative, that is passionate about young people. Malta needs creativity and honest people to lead the country."

 

Air Malta

Bartolo was also asked about Air Malta. He said he has “lost hope” in Air Malta being saved in its current form and believes that a new national airline will likely take its place.

Asked what he would do if he was in Finance Minister Clyde Caruana's shoes, faced with the possibility of not receiving the OK from the European Commission to inject state aid into Air Malta, Bartolo said: “I believe Clyde Caruana is taking his time going through the negotiations. He keeps me well informed. I want a national airline and I will not make it a political issue. The national airline needs to go through this change. I firmly believe the airline will close and a new airline will open. I believe that it will not be a transfer of business,” he said. If it’s not a transfer of business, “I don't know what would happen to the aircraft or the fleet size. If it would be a fleet of seven, can we lease two to other airlines during the off-peak season, or would we have a fleet of five and need to wet lease two ourselves in summer? If it’s the latter, we know that it is a drain on cash flow. So if Caruana is taking his time arguing on Malta's behalf not to wet lease, but to be able to own the seven aircraft, then he would be doing the right thing in taking his time in the negotiations.”

His criticism of Caruana is over his communication with the airline’s employees, who Bartolo believes should be kept better informed. As for what went wrong at the airline recently, Bartolo said that communication, planning and execution suffered.

"Going back a year, there were packages created for Air Malta workers to leave the airline,” yet there had been delays, he said, “and then the airline was employing people again.”

“I’m not saying that this is an easy exercise, as it isn’t. I have a lot of respect for Minister Caruana and Air Malta chairman David Curmi. But the truth of the matter is that many things were promised and planned, yet execution was very poor, so the level of confidence and trust lowers."

"The country is still going through negotiations with the EU and I believe we let the cat out of the bag a bit prematurely. They’re trying to take decisions when we don't even know what the conditions are."

He was also critical of the government’s refusal to hold a debate about Air Malta in Parliament.

Turning to the airline’s workforce, he said that workers are demotivated and questioned whether all the delays suffered by the airline are technical delays. “Air Malta never suffered from all these technical delays. It always had a prim and proper fleet. So is the technical delay an excuse or are the workers, who are demotivated within the airline, affecting operations? Just asking."

People, he said, expect transparency, communication and facts.

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