VOICE OF THE
WORKERS ISSUE 40 OCTOBER 2014
Contents The Balancing Act
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Sustaining Momentum: UĦM’s Budget 2015 Proposals 03 Proposti tal-GWU: Budget 2015 07
Budgeting for Today and the Future The months between October and late November in Malta normally feature discussions on the Budget for the following year. In the preceeding months, trade unions, employers’ associations, civil society, NGO’s and individuals, prepare a list of proposals they then present to government for inclusion in the budget measures adopted by government. Naturally, stakeholders make proposals that suit their own needs. This means that there has to be a balancing act in terms of calibrating together the needs of the different stakeholders in a way that maximises the common good. In this sense, this VOICE OF THE
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is the reason why proposals put forward by the social partners are presented and discussed through the MCESD. This is a good way to engage in effective and fruitful dialogue, leading to proposals that had already been discussed at MCESD level before being taken up by government. Malta is facing a number of opportunities, as well as urgent challenges. We need to make sure that we invest the right time and resources into making work pay. The skills, training and education of our workforce is the key to more flexible and better paid work and conditions. We then
EDITOR’S NOTE JOSEF VELLA
need to be effective enough to match our workers’ skill base to the work that is or will become available. Also, we need to make sure that work is a viable option to all, including those who are unemployed, as well as women. This is the essence of Jobs+. There are also urgent challenges we need to address. Most importantly, we need to address the issue of sustainability in a number of sectors. The pensions sector is a case in point. If we don’t address now, it might be too late. The UHM and others have been constantly reminding the political class of the dangers of 1
EDITORIAL
overlooking such issues, and that bold political decisions need to be taken. But if we don’t do this now, we might me nearing the point of no return. If we arrive to that, the decisions will have to be taken in the knowledge that the chickens have come home to roost. It is essential that proposals which are taken up are tackled and duly delivered. We owe it to all of us to
make sure that promises are maintained, and that any slack is explained and addressed. The budget is, in reality, a statement on how the money belonging to the Maltese people will be managed for their benefit, being short, medium or long term. What we do now will echo in the years to come. Herein lies our responsibility.
we need to address the issue of sustainability in a number of sectors. The pensions sector is a case in point. If we don’t address now, it might be too late.
PICTURE STORY
The Balancing Act Balancing the aspirations, interests and strategies of the country’s people; although the budget is essentailly a financial statement, its social repercissions may be far-reaching. Good and effective budgeting denotes making decisions that affect not just short-term needs, but also reflect long-term strategies. Although budgets are sometimes turned into media and political circuses, much remains to be done to make sure that discussions are well researched, objective and propositive. Naturally, different interests denote different opinions, and strategies may be subjective. However, opportunities exist for better and more efficient dialoge that should lead to more win-win situations. VOICE OF THE
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BUDGET 2015
BUDGET 2015 UÓM PROPOSALS
Sustaining Momentum
Introduction Union Ħaddiema Magħqudin (UĦM) is pleased that its efforts in making its Jobs+ policy a reality are coming to fruition. The National Employment Policy (NEP) published this year confirms the validity of the Jobs+ policies put forward by this union. UĦM is pleased to note that the NEP has also taken into account some of the budget 2014 proposals, such as the need of in-work benefits and social enterprises. In addition, UĦM is satisfied that its free child care proposal is working formidably. The more beneficiaries there are the better VOICE OF THE
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it is, as more women remain in the labour market. This was another proposal put forward by UĦM before the general elections. On the other hand, the union notes that despite government pledges to improve co-operative legislation, progress in this regard has been minimal. The proposals put forward in this document are a continuation of the union’s policy in addressing labour market needs while ensuring social justice across the board. The proposals mentioned herein refer to i) make work pay & work ethic, ii) pensions, and iii) other proposals.
UĦM’s Proposals Make Work Pay & Work Ethic Malta’s unemployment rate is among the lowest in the European Union. Yet yet the union is concerned that a number of Maltese jobseekers still cannot find a job. The fact that half of the new jobs are being taken by foreigners is food for thought. In line with the pre-budget document, UĦM believes that time has come for government to consolidate its Make Work Pay policy by addressing the following: • Introduction of in-work benefits which significantly decrease the poverty trap. 3
BUDGET 2015
As part of its proposals for budget 2014, UĦM suggested the introduction of an inwork benefit worth up to a maximum of €900 for every child for families with low income. Together with the tapering of social benefits, such benefit aims to increase the incentive of taking up a job, reduce in-work poverty and reduce employment in the black economy. Government should make sure that different income thresholds apply such that married families are not put at a disadvantage. This measure would not cost the government more than €1.8 million per annum. This measure would not only attract more people in the labour market but it will also serve as a means to reduce the risk of piverty among low income workers.
• Reform the social security act. A thorough exercise should be done to amend any clauses in the social security act that promote dependency at the expense of employment as is the case with single parents. In addition, government should also address certain anomalies in the Social Security Act. By way of example, it is unjust that persons who paid social security contributions and live with their pensionable parents are not entitled to unemployment benefits after the elapse of 6 months, while someone without any contributions can be eligible for benefits as long as he or she is registered as head of household.
Invest more in the training of workers. Work can pay more if workers are more productive. Now that EU funds from the programming period 2014-2020 are available, government should re-launch training schemes so that employers can step up their training efforts. Government should mainly promote such incentives among low-to-middle skilled workers.
• Reinforce the work ethic principle among youths. Unfortunately, some youths are giving up on work and instead prefer to remain not in employment, education or training. Although Malta’s NEET rate at 13% is considered to be one of lowest in Europe, this form of social exclusion enhances the possibility of hardship later on in life. UĦM recommends that the Employment and Training Corporation delivers more training initiatives that reinforce the work ethic among such youths. Pensions Proposals It transpires that the at-riskof-poverty among pensioners exceeds the 20 per cent mark. Pensioners are amongst the most vulnerable groups in society as their income is in great part dependent on social transfers. To this end, UHM’s pension section is putting forward the following suggestions: • UĦM urges government to take serious actions on pension reform. This country has for long postponed important reforms that should have been in place years ago. In the absence of any concrete actions, the sustainability of the first pillar is questionable. On the other hand if the second pillar is not legislated, there is the risk that for most pensioners, complete retirement won’t be possible. For many the third pillar is simply not an option. • All officers entitled to a service pension who served in the public sector, in the army, as police officers, officers in the correctional
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BUDGET 2015
facilities and others, are entitled to both a service pension and a retirement pension. Unfortunately, these pensioners have suffered an injustice for a number of years now since their retirement pension is paid at a reduced rate. The Pensioners’ Section is of the opinion that this injustice is rectified and these pensioners should start receiving the full retirement pension as from next year. • In its electoral manifesto, this government promised that the Guaranteed National Minimum Pension should be pegged to 60 per cent of the National Median Equivalised Income. The Pensioners’ Section urges government to start delivering on such a promise. • When a member of a couple passes away and both pensioners are eligible for a retirement pension, government should grant the
highest pension to the survivor in full. In addition, Survivors’ Pensions should continue to be awarded at the full rate instead of the current 4/5 rate. • Pensioners’ consumption patterns are somewhat different from that of other families. Hence, the compensation for the cost of living may not be adequate. Thus, it is being suggested that NSO should carry out an exercise to determine the adequacy of this compensation. Other Proposals • Mothers working on reduced hours should have the facility to declare their income as if they are working on a parttime basis. To date, a mother who is working on a part-time basis may benefit from the 15% withholding tax, whereas a mother on reduced hours can either pay no tax at all but the husband pays his
Mothers who have just had children and work in the private sector do not have the option of a career break. Their only choice, if they would like to spend more time with their child, is to give up work and get back to work later on. Hence, it would be socially just if such mothers benefit from social security credits for a specified time on the condition that they return to work thereafter.
dues according to the married tax computation, or else the mother’s income would be added to that of the spouse. In both cases the mother on reduced hours is at a disadvantage. • Members of disciplined and similar forces should be paid overtime rates for hours beyond the weekly established number of hours. • Employees who provide a service on request from third parties (eg. Customs Department and Police Department) should have their income considered as parttime and taxed at 15%. • UHM is suggesting that all employers should be members of an Employers’ Association. Such association would ensure that all employers abide by the Employment and Industrial Relations obligations; hence employees’ rights would be reinforced. • UHM reiterates its proposal for government to step up its efforts in tackling tax evasion. Better coordination between the Inland Revenue Department, VAT Department, Customs Department, Transport Malta and the Lands Department, would make it possible for government to observe income and consumption patterns, hence identify any possibility of tax evasion. • The National Employment Policy launched this year had many positive aspects. UHM is of the opinion that the issue of skills mismatches should be given priority. Hence, it is
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BUDGET 2015
suggesting that government invests more in this area and takes the appropriate actions to identify and address any mismatches that are present in the labour market. • Year-on-year the number of persons in employment is going up. Economically this is very positive but little attention is given to any adverse effects that this may cause. In Malta, much attention is given to levels of employment, but very little is attention is given to the quality of life at work, including stress levels. For many families, work-life balance, problems at work and at home, as well as other work-related issues may result in experiences of stress to individuals, their peers, as well as their familiesUHM is recommending government to launch an information campaign on how to cope with stress and where to seek help if need be. • One of Malta’s Country Specific Recommendations is on the Apprenticeship Reform. The European Commission notes that the apprenticeship reform is overdue. UHM urges government to take this reform seriously as it may be the case that apprenticeship is not yielding the desired results. In addition, government should ensure appropriate monitoring
VOICE OF THE
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during work placements in order to lessen any form of abuse. • NGOs that organise international events should have the chargeable VAT on the accommodation of their guests waived. • In the budget for 2014, government announced a number of changes vis-àvis the co-operatives sector. The Union acknowledges that discussions took place during this year but so far nothing beneficial to the co-operative movement has materialized. Government had announced that a new legislation was being formulated and that this would be discussed with all stakeholders before it is passed through parliament. It is imperative that these discussions commence as soon as possible to allow for a healthy discussion to the proposed wording of the legislation. These include the reduction of the minimum number of members that may form a co-operative society from 5 to 3 and the introduction of the concept of social co-operative enterprises. • With respect to the Central Cooperative Fund, Government is committed to implement the changes to the regulations
by the end of 2014 and the Union is insisting that government is to ensure that the two existing Cooperative Federations are treated equitably. The implementation of these measures should take place without any further delay. • Positive discrimination in favour of social enterprises is common practice in many EU Member States, and is allowed by European legislation. At a national level, such positive discrimination is still absent. Government should consider the introduction of positive discrimination in public procurement so as to favour service providers who employ employees with a disadvantaged background and in particular persons with a disability. • Government should consider legislating in favour of Credit Unions. Credit Unions are not-for-profit financial institutions that lend money for social purposes at a fee or a reduced interest rate. Credit Unions mainly serve that part of the community that has limited resources and cannot access credit from traditional financial institutions. Credit Unions may be a significant step for people to avoid the poverty trap.
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GWU BUDGET 2015
Proposti tal-GWU
Budget 2015 IL-GWU TAQBEL MAR-RIFORMA FIL-BENEFICCJI SOCJALI GHALIEX HI TEMMEN LI DAWN GHANDOM JIGU MOGHTIJA LIL MIN HUWA VERAMENT FIL-BZONN. GHALDAQSTANT, IL-GWU TISHAQ FUQ IL-BZONN TA’ MIZURI MMEDJATI BIEX DAWK L-INDIVIDWI LI QEGHDIN F’PERIKLU TA’ FAQAR IKUNU JISTAW JOHORGU MINN DAN L-ISTAT Il-proposti tal-GWU isegwu kif gej: Il-GWU tishaq l-importanza ta’ inizjattivi li jheggu lil min hu inattiv sabiex jidhol lura fid-dinja tax-xoghol (making work pay initiatives). Il-GWU tiproponi sabiex il-beneficcji socjali jigu reveduti b’tali mod li jattiraw lil min hu dependenti fuqhom biex jidhol lura fid-dinja tax-xoghol. B’hekk, il-beneficcji ta’ individwu li jidhol lura fid-dinja tax-xoghol b’pagi mhux b’sahhithom ghandhom jigu maqtuha gradwalment u mhux f’daqqa kif isehh fil-prezent. Il-Union tiproponi sabiex f’kazijiet fejn individwi (kemm nisa kif ukoll irgiel) li jergaw lura ghaddinja tax-xoghol u ghandhom pagi baxxi ghandha tinghatalhom zieda permanenti fuq il-paga li tigi sussidjata mill-gvern sabiex dawn l-individwi jibqaw attivi fid-dinja tax-xoghol. VOICE OF THE
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MCESD - WORKING IN RESTORATION
Il-GWU tinkoraggixxi lil Gvern sabiex jaghmel uzu minn fondi socjali Ewropej biex jghin lil nies li ilhom qeghda ghal tul taz-zmien. Il-Union hija favur kull mizura li tiggenera ix-xoghol f’pajjizna. Ezempju car huma Green Jobs. Fuq dawn il-linji, il-Union theggeg lil Gvern sabiex ikompli jistimula Green Jobs ghaliex dawn jirrizultaw f’impjiegi ta’ kwalita’. Il-GWU tishaq fuq il-bzonn ta’ aggustament fil-basket tar-Retail Price Index li fuqu tikejjel l-gholi tal-hajja. Il-prodotti uzati filbasket tal-RPI ghandhom jigu riveduti b’mod regolari sabiex caqlieq fil-prezzijiet ikunu riflessi fiz-zieda tal-cost of living. Il-Union temmen ukoll li il-COLA ghandha tigi moghtija lil haddiema darbtejn f’sena. Il-GWU tibqa vigilanti fuq zidiet mhux mistennija fit-taxxi u li ma jigux imkejjla bil-COLA sabiex titlob kumpens adekwat jekk ikun mehtieg.
Il-GWU theggeg il-gvern sabiex jesplora nicec godda ta’ turizmu bhal dak ta’ li jattira turisti sinjuri, kif ukoll turizmu iffukat fuq cittadini avvanzati. Nicec bhal dawn ghandhom iwasslu ghal livelli ta’ turizmu b’sahhithom tul is-sena kollha u jrazznu c-ciklikalita’ ta’ dan is-settur. Il-GWU theggeg ukoll proposti konkreti li jipromwovu lil Ghawdex bhala destinazzjoni principali meta wiehed izur Malta.
il-Union tibqa tesigi li il-Gvern jiggarantixxi li l-inqas pensjoni ma tkunx inqas minn 60% tal-paga medja nazzjonali. Il-Union tishaq ukoll sabiex isir studju intensiv fuq il-possibilta li tizdied il-pensjoni massima ghall-anzjani li twieldu qabel il-1962.
Il-prekarjat ghandu jigi indirizzat bl-aktar mod effettiv. Il-Union hija favur l-inizjattiva tal-gvern li ma jinghatawx tenders lil kumpaniji li jhaddmu bil-prekarjat. L-eliminazzjoni tal-prekarjat ghandha twassal ghal suq taxxoghol b’sahhtu fejn l-impjegat ma jigix sfruttat u l-kumpens ikun jirrifletti is-suq.
Il-Union tishaq li jigu indirizzati l-ingustizzji socjali fosthom dawk mal-haddiema tax-xatt, il-pensjonijiet tal-eks Haddiema tat-Tarzna kif ukoll l-aggustament fil-pensjoni tal-eks haddiema talkorpi.
Il-GWU tesigi li jergghu jibdew jinghataw lura l-festi li jahbtu s-sibt u l-hadd fuq medda ta’ hames snin.
Il-Union temmen li s-settur talmanifattura kien u jibqa’ wiehed mis-sisien ewlenin tax-xoghol f’pajjizna. Il-Gvern, flimkien ma’ l-imsiehba socjali ghandu jniedi analizi serja ta’ fejn ninsabu f’dan is-settur. Fuq kollox il-Gvern ghandu iniedi aktar incentivi fiskali biex jizdied l-investiment fil-manifattura.
Mill-aspett ambjentali, il-GWU thoss illi jrid isir aktar enforzar fil-ligi ambjentali kemm f’Malta kif ukoll f’Ghawdex bil-ghan illi jkompli jithares l-ambjent naturali, agrikolu u anke dak marittimu. VOICE OF THE
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Operational Programme II - Cohesion Policy 2007-2013 Empowering People for More Jobs and a Better Quality of Life Project part-financed by the European Union European Social Fund (ESF) Co-financing rate: 72.25% EU, 12.75 MT, 15% Private Funds Investing in your future VOICE OF THE
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