04 June 2003

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Toon this week: The ties that bind

Curbing expenditure

Statistics released by the National Statistics Office last week confirmed the precarious state the country’s 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 isn’t an easy task. The bulk of government’s expenditure goes on social security benefits and wages, which, together, make up 46 per cent of government’s total expenditure.
But trimming at the edges simply won’t 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 election time.
The other aspect of expenditure control is public sector wages, or, rather, employment.
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 it’s public finances that we’re 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’ major employer.
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 change.
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.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
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