A new government should implement reforms to strengthen its governance to restore the country’s reputation and get the country off the grey list as this was impacting business confidence, according to the Malta Employers Association.
In a memorandum with pre-election recommendations to the political parties, the employers' lobby group said the country needed to “come clean” as it was “falling short on many counts”.
“Corruption can no longer remain unaccounted for,” the employers’ body said, as it mentioned how the last legislature had been "rocked" by a series of scandals involving the highest level of power that led to the resignation of the prime minister, ministers and senior public officials, serious allegations about cabinet members, the assassination of a high-profile journalist and “a humiliating relegation by the Financial Action Task Force to a grey list status”.
“Things have come to a head and the appeal by the association to our political parties is that the main focus of the coming legislature must be to clean up our act, before things take an irreversible turn for the worse. This is a stark reality which is being overlooked,” the MEA said in its document.
“Government has a moral obligation to maintain a system where success in business or otherwise is not dependent on corrupt practices and political manoeuvring. The role of political parties and government is to enable an environment that facilitates ethical business and investment through national policies and not to be directly involved in the workings of individual enterprises. They need to distance themselves from business,” it said.
MEA director general Joe Farrugia told a press conference that Malta needs to take stock of the social, economic and moral direction the country is taking and address shortcomings, not least with the “prosecution of persons who have been involved in corrupt practices and murder”.
On governance, the MEA said reforms were needed to address the situation involving positions of trust, secret government contracts and dishing out direct orders.
“There is a need to restore confidence in the judiciary, politicians and our authorities to have a society where people can aspire for success through merit and hard work, rather than through a sense of entitlement and cronyism. How can there be faith in the system which awards a person of trust an annual package of €163,000, or when millions of euros of government contracts are being awarded through direct orders, without any justification or transparency?” the MEA asked.
It said this was “eroding people’s fundamental beliefs” and creating “a sense of disillusionment” among the population and foreign investors, in Maltese institutions.
Stop public sector recruitment before elections
The MEA insisted on changes that would not allow public sector recruitment six months prior to an election except in critical professions like teaching and care and health professionals and that people holding positions of trust should have full disclosure of their remuneration packages and qualifications and must be periodically audited.
The MEA said companies were concerned about the misdirection to blame the greylisting on enterprises because of a lack of tax compliance. It said that while it supported efforts to ensure that everyone paid their dues, the country’s greylisting was not the result of tax evasion so addressing this was not a guarantee to get Malta off the list.
Farrugia said the political parties need to move away from promising everything to everyone without weighing the effect this would have on the country’s financing. The deficit increased considerably in the last two years due to measures taken to cushion the effect of the pandemic but it cannot keep increasing and the public finances need to be brought back in check.
On ODZ developments, the employers proposed that this would require a two-thirds majority vote in parliament.
On transport, the MEA said there should be a phased multi-modal transport system that incorporates roads, sea and underground metro which provided connectivity to Gozo. Investment was needed in a transport system that places people at the centre rather than cars.
The MEA expressed concern about the natural and built environment, the impending EU tax harmonisation and the citizenship by investment scheme, which should be dismantled to contribute towards repairing the country’s reputation.
On education, the employers said reform must address the shortcomings leading to Malta’s early school leaving results, which are currently the highest in the EU. Students are to be channelled and motivated into career-oriented disciplines which match the country’s future economic aspirations, the MEA said.
It suggested the appointment of an SME commissioner who will be able to liaise with micro businesses and SMEs to better address their difficulties as well as the introduction of more business incubation areas around Malta and Gozo to encourage start-ups. It also proposed changes to the Employment and Industrial Relations Act which has been in force since 2002 as well as a better structure for the industrial tribunal.
Measures must also be taken to address the changing world of work with the formalisation of teleworking, allowing employees to manage their own time.
On the proposal of a four-day week, Farrugia said that working for four days and getting paid for five was not sustainable but workers can be allowed to manage their own time. On the soon-to-be-introduced right to disconnect, he said a discussion was needed because flexibility had to go both ways.