Al for Budget 2020

Government, together with the social partners, needs to formulate a national demographic strategy to address the sustainability and the social and economic impact of a continued increase in the population. Economic growth strategies should be based on efficiencies and higher output per person, rather than on an increase in working people.

2. Retention of retired persons in employment

Government should provide stronger incentives for elderly persons to remain in the labour force. In its recommendations to the National Budget 2019, MEA proposed to award half pension to those employees who remain working between pensionable age and retirement age. This will be a temporary measure in itself, as eventually the pensionable age and retirement age will be the same, at 65 years. However, it will help to address short- to medium-term labour market shortages.

3. Matching required skills and education

Although considerable progress has been made in this respect, employers and educational authorities need more focused strategies to match educational qualifications with labour market requirements. This could also include the nature and duration of some courses. For example, why should it take 5 years to produce a teacher when before it took much less? This is inflating teachers’ expectations and also disincentivising young persons from taking up the profession, choosing other areas instead.

The concept of introducing VET and Applied subjects in compulsory education is positive and should contribute to remove the stigma that vocational education is somehow inferior to more academic subjects. This needs to be supported by adequate human and material resources and course content should ensure that these subjects are as challenging as other disciplines.

• Unemployed persons and migrants should be asked to attend mandatory numeracy and literacy courses.

• There should be more effort to encourage students to participate in apprenticeship schemes. There is a shortage of skilled persons and technicians at MQC levels 4 and 5 in the labour market.

• The process for the accreditation of non-formal learning recognition to establish pathways to achieve higher MQF Levels should be intensified.

4. Rationalising the public sector

The public sector needs to rationalise its operations and release underutilised labour to the private sector.

5. Modernising the public sector salary structure

The public sector salary structure needs to be modernised to motivate highly-skilled and professional employees. Fundamentally: less people, better pay, more productive. The reform should include remuneration to members of parliament, with MPs being prohibited from occupying any positions in the public sector, thus removing a conflict of interest between legislative and executive roles. In the longer term, Parliament should be reformed to include full-time parliamentarians.

6. Persons on Positions of Trust

Persons on a position of trust need to be accountable and their remuneration package made public. The sheer number of persons in such positions and the manner in which some positions of trust have been filled raise serious governance issues.

7. Identity Malta

Identity Malta needs the necessary resources to expedite applications. MEA has worked closely with Identity Malta to simplify the processes, but it is evident that Identity Malta cannot keep up with the sheer volume of applications with its current resources. Efficiencies may also be gained through the automation of certain aspects of their processes.

MEA is fully in favour of enforcement to ensure that all TCNs are working with the required permits, but there also needs to be an effort to improve efficiencies so as not to push TCNs or employers into illegality due to unreasonable delays in issuing permits.

8. Agreement with countries re TCNs

other

Government needs to clarify any agreements with other countries to ensure that persons from countries like the Philippines come to work here on clearly defined terms. Maltese employers cannot be accused of human trafficking for offering conditions of employment that fully respect local legislation and that do not discriminate between Maltese and foreign employees.

9. Increase in labour costs

Government should not introduce any measures that inflate labour costs further. The results of this study show that the Maltese labour market is highly responsive to changes in demand and supply through labour mobility, wage fluctuations and other conditions of employment. The fact that increases in labour costs are not being matched by productivity makes any measures that increase labour costs further, such as the additional annual leave to compensate for public holidays falling on weekends, dangerous to the sustainability of many enterprises. The cost of additional annual leave to compensate for public holidays falling on weekends is approximately 1.25% of annual working time. Unless this is recuperated from efficiencies, on a labour force of 200k it will require an additional 2,500 employees to compensate. Given the current situation in the labour market, most of these additional employees will be nonMaltese.

Even if the loss of the 600k man days per annum is somehow justifiable, these days would be better utilised if they are focused on employees who have more need for them, for example family reasons. As things stand, employees in many companies are approaching management to request compensation instead of the additional leave days.

10. Directive on work life balance

Any measures that will be introduced to comply with the Directive on Work Life Balance have to be financed by the state, and not the employer.

11. SME Tests

Hardly any SME tests have been conducted on measures that will have an impact on costs to business. MEA expects that in order to protect SMEs, an SME test will be conducted at the proposal stage to minimise any negative effects on businesses.

There should be a single identification business number to all business units registered in Malta. This will significantly reduce bureaucracy.

12. Direct orders

A worrying practice that has crept in is public procurement which bypasses the tendering process by granting direct orders. This is creating an uneven playing field among business operators and a sense of mistrust of procurement procedures. Government must commit itself to adhere to the tendering process in its procurement. MEA has been highlighting this in recent years but no progress is being made.

13. A level playing between companies

14. Transport

field

The preferential tax rates given to foreign investors work against local investors, especially those catering for the domestic market. Unregulated imports from Sicily are also affecting local producers badly. This should be addressed.

The heavy investment in road networks should alleviate traffic congestion, which is also affecting the workplace through late arrivals, lack of parking space, stressed employees, etc. This is something which requires a longterm action plan and which considers different options for improvement. A radical overhaul of public transport through the consideration of metro systems or other means should be subject to cost benefit analysis exercises to weigh the feasibility and effectiveness of different options.

Government should intensify incentives for a higher take-up of electric cars through better subsidies and a wider diffusion of charging points. Some countries are setting 2030 as a target to remove all diesel vehicles from the roads and to have all vehicles electric by 2040. With the high density of vehicles and the resulting air and noise pollution, Malta could be at the forefront of these developments provided that stakeholders are consulted. Gozo could be an ideal test market for conversion to electric vehicle technology.

Government should also support innovative, industry-led initiatives to minimise traffic congestion. For example, incentivising car pooling networks can be effective in reducing the number of vehicles on the road during peak hours.