2 - 8 December 1999

Private sector concerned civil service and 'yard collective agreements will drain government finances

by Anthony Manduca

The private sector is increasingly concerned about the cost of the two collective agreements that the government had signed with the Malta Drydocks and the civil service. Signals given by the private sector to The Malta Business Weekly have expressed concern that although the government is striving to boost its revenue through heavier taxation, its seems that less effort is being made on its expenditure side. Cases in point are the new collective agreements signed with the civil service, which comes into effect in 2001, as well as the recent collective agreement at the Malta Drydocks and the subsidies allocated to the 'yard. Both agreements are expected to considerably drain public finances.

In the case of the shiprepair and shipbuilding industry, there seems to be some uncertainty over the total amount of money that the government will have to allocate for these industries by means of subsidies. In last year's budget for 1999, for example, the government had allocated Lm10,000,000 but ended up giving Lm13,669,000. Of these Lm9,000,000 were budgeted in subsidies but the revised figure in subsidies amounted to Lm13,289,000.

This year's budget for the year 2000 has earmarked Lm9,400,000 for the 'yards, of which Lm9,370,000 are subsidies. It is not clear whether the government has taken the huge wage increase that was agreed upon when the collective agreement was signed when it presented this budget. The private sector is asking whether the subsidy will in fact be much larger than planned, which is what happened this year. Regarding the civil service's collective agreement, which comes into effect in 2001, the private sector is asking whether the government has taken this into consideration when it presented its budget. Last week the issues of government expenditure and collective agreements were brought up in a budget discussion programme on Net TV by a Chamber of Commerce representative, Norman Aquilina. However, he was immediately interrupted by General Workers' Union officials who claimed that they had every right to negotiate such agreements. The Malta Business Weekly pursued this point and contacted Mr Aquilina to see if he wished to amplify this point.

Mr Aquilina stated: "While agreeing that unions have every right to negotiate any collective agreement on behalf of their members, I wish to add that the Chamber would like to see the economic factor being given due importance when discussing new measures or collective agreements. It is wrong to focus on the political and/or social requirements without also giving due consideration to the economic realities. All these issues must be given their fair share of importance. This approach is in the interest of all three social partners."