Carry on... protesting!

Economist Edward Scicluna justly pointed out that the €200 million (3.5 per cent of GDP) deficit results from a wasteful administration of public funds, such as 20 years of spending of taxpayers' money on an unproductive shipyard, ending with irresponsibly generous retirement schemes. He also mentions the maintenance and perpetuation of overstaffed ministries and government departments, allowed to be notoriously inefficient and which, through rather high salaries, are eating up precious government tax revenues.

Economist Gordon Cordina repeatedly warns that it is critical for the government to increasingly try to redirect expenditure towards productivity-enhancing activities.

It is now very clear that the generous dockyard early retirement payments and the equally generous public sector collective agreement wage bill increases are major contributors to the budget deficit.

The deficit implies that the government is short of funds and, hence, is totally unprepared and unable to cushion the devastating effect of the energy price hikes on businesses, industry and households. Now it is well and good to protest about a government that does not practise meaningful consultation and it is well and good to protest about households, businesses and industry left to fend for themselves. These are the facts. However, it is pertinent here to ask who has contributed to bring about this unhappy situation.

On the shipyards' issue and the public sector collective agreements, the GWU and the UĦM have exerted undue pressure on the government and the government has caved in, treating taxpayers' public finances as a bottomless resource.

The GWU flexed its muscles over a retirement compensation scheme for shipyard workers. After the proverbial threat to take to the streets, as expected, the government coughed up the money, money that is to be passed on to a privileged class of workers who have, over the last 20 years, eaten up almost half a billion of our dear old Malta liri. So now again, thanks to the GWU, they also get the cherry on the cake, a further settlement, out of public funds, to be paid to highly-skilled technical workers, most of whom should find no difficulty getting immediate alternate productive employment.

The UĦM was the main protagonist on the issue of the public sector collective agreement. Again, we witnessed another onslaught on public finances, an onslaught very poorly fended off by the government. It is about time that the government and the unions give publicity to what was actually signed in 2008, what increases to public sector employees were conceded and what extra money is the taxpayer going to have to pay in 2008, 2009 and 2010. Where usually unions go boasting about the improvements they manage to obtain for their members, this time round there seems to have been a conspiracy of silence.

For €20 to €23 a week increases, can the government and the unions tell us what advantages were negotiated for the taxpayer? What was negotiated? Improved productivity through amended ways of working? Reductions in highly wasteful manning levels? Summer hours? Serious tightening of discipline? Accountability?

So we have a government that does not appear capable of seriously negotiating with the unions, which, in turn, push their demands to the limit on behalf of privileged categories of workers. In these instances, money, public money, does not seem to have been a problem to the government and the unions.

Now we cry foul that with an already high budget deficit there is no more money left to cushion households, businesses and industry from the shock of the high utility tariffs. How much have the vigorous interventions of both the GWU and the UĦM contributed to the deficit? In the private sector, businesses and unions behave quite differently. Businesses resist and unions respond responsibly because it is known that, unlike the privileged public sector and shipyard workers, private sector employees are subject to the economic reality of efficiency, productivity and the final test of viability.

Yes, the private sector employees abide by the rules of three-day weeks, redundancies and unemployment, if times are hard. Yes, it is ironic that businesses, industries and households, major contributors to government revenue, will have to face head-on the inevitable utilities hike. And they will have to do it without government support, without generous wage increases or equally generous retirement schemes.

The Leader of the Opposition has participated in this crisis with some timely advice and proposals; in opposition that is the most you can do. Opinions vary on the validity of Joseph Muscat's interventions, so I will stop and focus on just one of his exhortations, that is the somewhat inspiring cry of "kuraġġ"!