this week: The ties that bind
Statistics released by the National Statistics Office last week confirmed
the precarious state the countrys finances are in. And, coming
hot on the heels of equally worrying data issued by the Central Bank,
the situation is not one that promises hope unless concrete steps are
taken to bring down government expenditure.
It isnt an easy task. The bulk of governments expenditure
goes on social security benefits and wages, which, together, make up
46 per cent of governments total expenditure.
But trimming at the edges simply wont do. Social security benefits
must be revised. While some may be removed completely, like the marriage
grant, others can be provided on a means-tested basis.
More stringent controls must be introduced to stamp out abuse and political
parties should be less generous when promising the heaven on earth at
The other aspect of expenditure control is public sector wages, or,
To start with, government must ensure that when creating new authorities
these do not duplicate work already carried out by existing government
departments. Rather than employing new personnel, these authorities
should engage competent people from the civil service.
What sense does it make to have a Wireless and Telegraphy department
when this could easily be incorporated within the structures of the
Malta Communications Authority?
Secondly, these authorities must be accountable to the auditor general
and parliament to ensure that they manage their finances and operations
in a transparent and cost-efficient way.
Last year we had the Ombudsman criticising the way certain authorities
were spending their money. The criticism should not fall on deaf ears.
After all its public finances that were talking about.
Thirdly, government must downsize the civil service. Much has been said
and promised in the past, but the civil service remains the country
The irony is that while certain sectors are short of personnel, others
are over manned. A human resources audit must be undertaken to identify
the personnel requirements for each of the different sections and departments.
In this way government would be able to offer early retirement schemes
to particular categories, thus shedding excess baggage.
Admittedly, curbing expenditure is, easier said than done. It requires
a government with a solid resolve to grab the bull by the horns. And
the time for action is now.
This does not mean that constructive dialogue with the social partners
should be sidelined. If anything, reforms must be implemented along
with the social partners. But the search for consensus must not hamper
Even if the unions may not agree with all that government proposes,
the bare minimum we need at this stage is a plan of action.
And hopefully this plan of action will arrive in the next budget.
Unless reforms are undertaken the country is doomed to failure, and
may even risk reaching the Maastricht criteria for the adoption of the
euro. The earlier things are done, the better for all.