this week: Second thoughts on taking the plunge
One step too short
The announcement that talks about pension and welfare
reform have resulted in a decision to postpone has come as a great anti-climax.
Following an unusual three-day retreat with most of the important social
partners the last thing expected was a postponement.
The Drydocks agreement has not proved to be all that is was cooked up
to be. To what extent our yards will be subsidised is unclear, and questions
rightly raised about the Drydocks ability to compete with stiff competition
from rival foreign docks, remained unanswered.
No doubt the three days at the Mgarr hotel served some useful purpose
and greater understanding between the social partners will serve us
in the future, but that was not all the public was expecting.
The partners at the meeting have been instructed not to speak about
the details of the discussions to the media, but it had already been
leaked that the government will introduce a three percent consumption
tax. The exact form the tax will take and which products or services
will be affected remains, however, unclear. Strangely it has also been
reported that such an increase will be offset by a one-time payment
to offset its effect in the first year.
That would seem to mean the creation of excessive administration, which
Malta can well do without, and begs the question as to whether a tax
can be designed and aimed at achieving the desired effect without needing
a payment to compensate.
The government is also said to be in favour of increasing the pensionable
age to 65 over the coming years.
It must be said that no administration tried to take on Drydocks, health,
welfare, pension reform all at once, and judging from what has happened
in countries larger than ours, this is no easy task. But on the other
hand the problems we suffer in those areas did not appear overnight
and it must be said that it was virtually this same government that
allowed the problems to grow to astronomical proportions and never took
steps to rectify the situation.
Exactly why all those that met in the relaxed calm of Gozo decided on
a postponement remains unclear. One of the major official reasons for
the postponement was that a World Bank report on pension and welfare
reform would be in governments hands come January 2004.
It would have helped if it had been explained what the report could
do to assist us to reach an acceptable solution, because it must have
appeared obvious to everyone that whatever the World Bank says our pension
and welfare problems, including the unsustainable health sector need
Malta need not rely on a World bank report for ideas and the postponement
can only serve to put our already unsustainable welfare position in
a more precarious state.
Minister John Dalli has over the years gained himself a reputation of
being decisive and unafraid to push forward unpopular measures. While
it has been noticed that John Dalli may not have been that enthusiastic
about Drydocks agreement, he was in Gozo.
The general impression, however, is of a government that is hesitant.
A government that has set itself tasks but does not have the gumption
to take those decisions that have been hanging like a dark cloud above
us, clouds that will bring rain, but with the hope that they will really
usher in a new spring in the long term.
The government seems to be able to take itself to the edge of the shoreline,
but cant get itself to take the plunge. Mr Dalli has not only
a reputation to uphold but also a much awaited reform.