The conflicting issues of a labour shortage and problems associated with a rapid rise in population weigh heavily in proposals for the 2020 Budget made on Monday by the Malta Employers’ Association.
The Budget is due to be presented on October 14.
“Government cannot ignore the strain that economic expansion is creating on economic, social and environmental sustainability. We believe that the underlying fundamental issue from which many of these issues emerge is the rapid demographic transformation of our country,” the association said.
“We emphasise the need for a longer-term strategy that quantifies the expected population increase with a view to design the appropriate economic and social infrastructure to minimise any negative impact of such demographic expansion.”
Incentives for workers to put off retirement
Among its proposals, the MEA urged the government to provide stronger incentives for elderly persons to remain in the labour force. It pointed out that last year, it proposed a half pension to those employees who remain working between pensionable age and retirement age.
It said 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 five 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,” it said.
Unemployed persons and migrants should be asked to attend mandatory numeracy and literacy courses, and there should be more effort to encourage students to participate in apprenticeship schemes.
The association said the public sector needs to rationalise its operations and release under-utilised labour to the private sector.
Foreign workers
Identity Malta, it added, also needed the necessary resources to expedite applications.
“MEA is fully in favour of enforcement to ensure that all third country nationals (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.”
It stressed that the government should not introduce any measures that inflate labour costs further.
“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,” it warned.
Direct orders
The MEA said 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,” said.
It also repeated its calls for a level playing field between companies.
“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. “
In other points, the association called for a radical overhaul of public transport through the consideration of metro systems or other means. Government should also support innovative, industry-led initiatives to minimise traffic congestion such as incentives for car pooling networks.