12 - 18 October 2000

Trying to achieve consensus

Professor EDWARD SCICLUNA, chairman of the Malta Council for Economic Development talks to Blanche Gatt about the proposed changes to the structure of Malta’s economic think tank.

As budget day looms, tongues begin to wag, minds begin to boggle and speculation becomes the order of the day. But the instruments of government have been playing the fiscal tune for months already now, and only the last few notes remain to be inserted.
Harmonious or not, these last-minute adjustments to the final score will determine whether our finance minister leaves the stage on budget day to the sound of applause or the jeer of catcalls. These late amendments, if in fact there are any, will determine whether the social partners that constitute the elements of our economy support or oppose this monetary opus. And, indeed, which of these groups approve and
which disapprove of the measures introduced.
A new method of supplying government with information about what the social partners would like to hear from the finance minister on that all-important day has recently been devised by the Malta Council for Economic Development. To find out exactly what this entails, I recently met Professor Edward Scicluna, Chairman of the MCED.
“Whereas in previous years each of the organisations represented on the Council would submit separate budgetary proposals to the minister,” Professor Scicluna explained, “now we have agreed to do it differently. Each of the organisations has still prepared its own budgetary proposals, but instead has delivered them to the MCED. We have now set up six sub-committees, one each for Income Tax, VAT, Welfare and Pensions, Public Sector Wage Bill and Employee Flexibility, Economic Direction and General Government Expenditure. In the next three to four weeks the sub-committees will be examining these documents, together with high government officials, to try to find areas of consensus that will then form part of MCED’s collective submission to government. In this way we hope to present government with an ‘opinion’ that contains common points of view and can be more easily and effectively utilised. If we have an issue where all parties agree, the Minister needs to know. And
the same goes for areas of disagreement.”
But surely mid-October is too late for MCED to start preparing their proposals for a budget due in November? “Minister Dalli assures us that it is not too late,” answered Professor Scicluna, “and that he will be devoting most of his time
working on the Budget, and even participating in some of the sub-committees, throughout the next four weeks. Besides, 85 per cent of any budget is unaffected by changes, so undertaking it now is not too late for the marginal though significant changes.”
The MCED is going through a dynamic period of change, not only in the area of budgetary proposals. “The MCED was set up in 1988,” Professor Scicluna said,“in order to deal with issues that concern collectively the three main social partners, the employers, the unions and the government. Each group has an equal number of members on the Council, which meets regularly to discuss various issues. There is no voting on the Council; every decision is reached by consensus, and it therefore provides a valuable forum for consultation and social dialogue between the social partners. It also presents its conclusions to government, in the form of advice that government is free to take or not.”
Professor Scicluna was appointed to the helm of the Council in 1999 and immediately set about devising a strategy to enhance the performance and contribution of the organisation. Amid accusations that the Council had matured into a toothless animal that growled rarely and lay down when stroked, he was given a brief by government to revamp the Council with the aim of enhancing the dialogue and consensus building among the social partners.
“The Council was set up as a forum for discussion,” he said, “but in fact it should be more than that. We had a situation where each of the groups was entitled to have four representatives at meetings; though the employers and the unions were consistent in their attendance, government was less so. For example, since my appointment the Economic Planning Division has failed to send a representative to most Council meetings. We want the government to be more consistent in its representation, and we also want to widen the membership to include ministries representing social policy, EU affairs, as well as organisations representing Civil Society. At present government representations come from the ministry of finance or the ministry of economic policy. We believe this is not enough. In order to discuss national issues of an economic nature we cannot ignore the social element. Of course one may argue that this element is already implied, through its present membership, by the unions. Government, however, now wants it to be explicit.”
Meetings of the Malta Council for Economic Development usually take place on a monthly basis. More recently, however, these have increased in frequency and now take place every two to three weeks. Working groups and sub-committees are convened more often.
“The agenda is set by the economy itself,” explained Professor Scicluna. “If inflation is an issue, then we discuss inflation, if unemployment is a concern, then that is our focus. The budget, of course, has its own
annual cycle. Then there are more structural long-term issues, like privatisation or the restructuring process, for example, that may fit in with the five-year timeframe of a legislature. Besides this, the Council itself can decide on its own agenda and choose a subject which it considers deserving national attention. In the future we would like government to ask the MCED for an opinion on any major economic and social policy.” One of the criticisms the Council has attracted is that its decisions and advice are often disregarded by government, despite the fact that these are consensual decisions that government itself participates in, albeit inconsistently.
“It is actually not clear how the Council is expected to put across its opinion effectively,” continued Professor Scicluna. “Government listens, but is then free to act or not. It has no commitment to take the advice of the Council. And, if government doesn’t take the advice offered, some members take exception. But the fact is that government has no commitment to act according to Council’s advice.” Professor Scicluna believes that the MCED needs fairly radical changes to be implemented before it can start to function more effectively. Creating a legal framework which would allow the MCED to re-define its composition, functions and organisation is high on the organisation’s list of priorities and a draft bill has already been prepared by Government and distributed to the members of the Council. The draft Bill includes most of the measures being suggested, and though not published until the suggested revisions by Council are considered by government, is in general accepted by the social partners. These minor amendments have just been passed on to the minister and, if they are accepted, the Bill should become law by the end of the year.
“The Bill as proposed envisages the participation of organisations of Civil Society,” added Professor Scicluna, “it essentially gives MCED a certain autonomy and changes the way it reports and to whom, as well as providing for research resources within MCED.”
However, MCED will not have to wait for the Bill to be passed before embarking on some of the planned initiatives, continues Professor Scicluna. “For example, in order to improve the quality of the discussions the MCED secretariat has the duty to provide the social partners with correct and up-to-date information about the issues under discussion. Without such background papers the discussion would remain shallow and not productive. Without proper and accurate economic information it is very difficult for a
member with a strong personal
view-point to see the other members’ own point of view. But when the members have well-prepared focus research to refer to, it will be very hard to remain intransigent. With the correct information people become more open to compromise and to reaching consensus.”
In fact, with members as divided as the unions, the employers and the government all sitting round a table, a sceptical person might wonder how they ever reach consensus. “In fact,” added Professor Scicluna, “in view of the confidential quality of discussion during council meetings, members are much more open than they would be in public. People are much more at ease. For example, you would never get a union admitting in public that certain workers are lazy. They may know of instances where this is so, but they would never admit it outside. The same for the business representatives regarding tax compliance. MCED is valuable because people can say exactly what they think, and it is this candid atmosphere that can lead to eventual agreement.” Although to date the advice MCED offers government is not made public, Professor Scicluna looks forward to the time when the Council’s opinions are published.
“Some members, for example, are prone to want to tie government to a commitment to act on MCED advice, but that is not the function of an advisory group. This vagueness about its main function may be the reason why MCED opinions are not published; members don’t like the fact that government doesn’t always take the advice we give.
“Personally I think this position is very weak. An opinion is a very powerful and effective instrument in its own right. For the public to see that three diverse and powerful partners like these can together come up with a balanced, logical and surely moderate opinion on a policy issue could only be of immense value to Maltese society.”