Finance Minister rules out four-day week, says it would cost €360 million

Finance minister Clyde Caruana has ruled out the imminent introduction of a four-day work week, saying cutting short Malta’s working week is currently “not realistic” and would cost Malta €360 million a year.

Caruana was speaking during a pre-budget business breakfast hosted by Times of Malta on Tuesday morning.

“I do understand that people would like to enjoy more leisure time, but let’s be careful,” Caruana warned. “Money does not grow on trees or fall like manna from the sky”.

Introducing a four-day working week across the public sector, a proposal floated by PN leader Alex Borg, would cost the country €360 million, Caruana said. This is the equivalent of a fifth of the government’s total spend on its public administration, he added.

Extending the measure beyond the government and into the private sector would raise the cost even further, he said.

“That money has to come from somewhere,” Caruana said, arguing that a shorter working week will only be feasible once the country’s productivity rises.

“For the economy to enjoy a shorter working week, people have to become much more productive than they are today,” he said, echoing a similar stance taken years ago.

Borrowing from Aesop’s fable of the greedy dog, Caruana warned that Malta risks imitating the dog who drops the bone in its mouth after mistaking its reflection for a rival with a bigger bone.  

Ultimately, Caruana said, while a four-day week is something that “the country should aspire to achieve,” Malta is still some way off that.

PN initiatives would cost €600m: Caruana

Caruana also shot down other fiscal initiatives proposed by PN, including slashing VAT rates for restaurants and cutting corporate tax to 15% for selected sectors, something he argued is forbidden under EU state aid rules.

The three measures would cost €600 million a year, Caruana said. “You can do them, but either something has to give or taxation has to increase.”

Thinking that these measures can be funded by cutting the fat on the public sector is “missing the wood for the trees,” Caruana said.

“I’m not saying that each government job is productive, some entities have unproductive jobs,” he admitted. “But to simplify matters by saying that the government can save millions by trimming certain jobs would be misleading”.

Mixed views in vox pop

Caruana’s dismissal of a four-day working week may come as a blow to several of the people questioned by Times of Malta in a vox pop carried out on Friday.

Many of those interviewed said that while a four-day working week might not work across the board, it would help alleviate “anxiety and poor health” in others.

“You have to make it work,” one interviewee said, arguing that it requires a flexible approach to a person’s work schedule.

Another pointed to the example of Sweden, which has toyed with the idea of a four-day working week for several years.

Nevertheless, others said they believed that “it’s not easy” to implement a shorter working week in practice, especially as the cost of living continues to rise.

One interviewee described it as “a bit problematic” for the government to pay people to work fewer hours.