02 February 2005

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Getting down to governing
The failure to reach an agreement on a social pact is regrettable. It is also a reflection of a crisis of leadership prevailing in our country. This failure reflects on all parties. It was the duty of each and every participant to find common ground at such a difficult moment in our economic history. It is all the more serious since the main union in the country was unable to agree. The failure of the negotiations has lead to The Malta Union of Teachers’ decision to suspend membership from CMTU.
This lack of agreement even among the unions themselves will not help achieve the necessary serene industrial climate so essential to achieve economic growth.
This was the moment to put aside all political considerations and just to concentrate on a national approach. Regrettably it was not to be. It will be the employees who will suffer most as a result of the lack of a social pact.
Such a pact would have helped guarantee their jobs. No doubt with the passage of time, fingers will be pointed and the blame game played in earnest.
Beyond all the recriminations, which are certain to be banded around, the lack of consensus will inevitably lead to dire economic consequences. It is clear with fewer hands pulling the same rope and singing to the same hymn the road to economic recovery will be that much more arduous.
With or without agreement the show however must go on. Government must legislate even without the blessing of the unions. There can be little doubt that government has gone through all the motions, allowing ample time for dialogue consultation and discussion, albeit for too long.
With the discussions now having broken down it is time for government to govern, to lead and to push ahead.
The union’s refusal to bow to the demands leaves the government with no option but to take all the necessary measures which in its opinion will help economic recovery.
The reduction in holidays is perhaps just the tip of the iceberg, a minor measure which should help increase productivity.
We consider this to be a minor measure since there can be little doubt that public holidays falling on the weekend not being added to the annual vacations leave entitlement is nothing but reasonable. More so when one considers the dire straits the economy is in. This is the route to achieving growth, if the country is to maintain its standard of living. Delaying the measures that need to be taken would have terrible effects on our economy. Accusations that this measure is being introduced on the backs of the employees fail to appreciate the golden rule of any economy namely that before the cake can be distributed it must be baked. Baking the cake is of course what countless employers against all the odds do in their every day work schedule. They are the group and section of society that creates wealth and all measures that further raise the costs of production will impede the backing of the cake.
Government too has its part to play. Beyond commitments not to increase VAT or income tax, there is a need to reduce many of the government-induced costs which are also leading to a lack of competitivity. Many transport, communication and travel costs are far too expensive and need to be reduced, if we are to compete. Government must come to terms with genuine complaints of many traders especially the smaller ones that at the end of the day they are working for essentially a wage and that the economic climate and all the running costs of the business are leaving their businesses in a very precarious position. This tight situation leaves them little room for manoeuvre, not allowing them available funds for sufficient marketing and investment so essential to allowing them to compete.
Local products will only sell if they are produced at a price which allows it to sell at a lower price than competitors. Price is the litmus test in an ever significant price conscious market. For this to be achieved the unit costs must be reasonable, reduction of leave entitlement is just one of the necessary cogs to lubricate the economic machine.
As the accusations following the failure to reach a social pact carries on being made, it is now crucial that government gets down to governing. Pushing through this piece of legislation is necessary not only to exert its authority but for government to create the necessary foundations for economic growth to be achieved.

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Editor: Saviour Balzan
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