Issue link: https://maltatoday.uberflip.com/i/1335208
9 maltatoday | SUNDAY • 31 JANUARY 2021 INTERVIEW worst mistake you can make – and, in my opinion, many Eu- ropean countries are making it, right now, out of desperation - is to not safeguard the labour mar- ket, over and above everything else… Jobs, you mean? Jobs. Because if the labour mar- ket collapses, the government's finances will simply never re- cover at all. As such, from my first days as Minister for Finance and Work, I have always given the same importance to employ- ment, as to finance. To me, the labour market is not a secondary concern. To this end, the empha- sis I placed, in the consultation document, and the work I will be doing in the coming months, will be focused on the job market: be- cause I am more than convinced that, if we get that right, the gov- ernment's finances will eventual- ly get back on their feet. How do quotas for foreign workers help, though? Third country workers also pay taxes and national insurance; surely, they contribute to the govern- ment's coffers… I never said that we were going to expel any foreign workers; or reduce their current number. What I said was – as I just re- peated now – that our formula has to be different, in today's circumstances. For example, we still have over a third (36%) of our local workforce with low skill levels, compared to their Euro- pean counterparts. So if we are to ensure that the people's qual- ity of life improves, we can no longer simply rely on increasing In-Work benefits here and there. We have to see to it that a sub- stantial portion of the improve- ment comes from the labour market itself. Let's be honest: over the years, various governments have declared that the country's only resource is its workforce. But when you look at how much is actually invested in this on- ly resource of ours… it doesn't amount to much. You might point towards investment in ed- ucation; and yes, there has been a lot. But it's not enough. We don't invest enough in up-skilling… Up-skilling is certainly impor- tant. But isn't it also true that we rely on foreign workers al- so (or especially) for unskilled work? That they are necessary to fill up positions that local workers do not want to occu- py? I wouldn't say 'necessary', no… So who will carry out this work? Robots? Yes. [Pause]. Let's not call them 'robots', however. But mechani- zation is a necessary component of the formula, if we are to main- tain our current quality of life. Coming back to the deficit: your government – like all its prede- cessors – seems allergic to the idea of increasing taxation. Given the circumstances, how- ever: how long can you contin- ue avoiding reality? Aren't new taxes necessary, to close the financial gap? If we act prudently [bil-ghaqal] – and allow me to emphasise that word: prudently – I see no rea- son for any new taxes. But if we throw caution to the wind… then sooner or later, yes, we will have to resort to desperate measures. But – and I'm saying it on the re- cord – I see no need for any new taxes for now: so long as there is complete prudence. I can understand that taxation is unpopular, with politicians and the people alike. But there are also areas where new taxes are justified: to safeguard the environment, for instance; or a tax on fattening products, to reduce obesity. What's wrong with that? But this type of taxation is not the kind that can realistically 'fill a hole' in the government's financ- es. These are taxes aimed at bring- ing about changes to people's lifestyles; as such, it is a totally different argument from the one I've been making… about sustain- ability, and the need to correct the deficit in the coming years. Meanwhile, on a separate (but related) tack: there is also a plan to phase out the internal combustion engine, and re- place it with electric vehicles. Government earns considera- ble revenue from duties on pet- rol and diesel: how do you pro- pose to balance out the losses this revolution will bring about? This is something that will happen, yes; but it's not going to happen tomorrow. The process is envisaged to take a number of years. And without a doubt, when the economy starts growing again: on the one hand, there will be new sources of government reve- nue… but at the same time, there may be losses of a few millions here and there, spread out over a span of years. But I'm not worried about it. The real shock to the system would come if – for argument's sake – we were to say that: 'as of tomorrow, no more petrol or die- sel'. That would be the decisive axe-blow. But if the phasing-out period is extended over a long timeframe, the fiscal situation will have enough time to regulate itself. The reality is that cars are not go- ing to disappear from our roads tomorrow. They will be phased out over a number of decades. So even if we do to lose out on a few mil- lion a year, out of a budget that amounts to 4 billion… come on, it's not such a big deal. Meanwhile, in the same speech, you (very cautiously) acknowledged that there is a need for salaries to increase. Isn't it time, then, to resusci- tate the Labour Party's 2013 proposal for a 'living wage': so that we can truly start address- ing the issue of poverty in the country? As you rightly said, I was very cautious when bringing it up. What I actually said was: while we recognize that salaries have to increase, we must also acknowl- edge that local industry is going through a turbulent period. We therefore have to ensure that there is an equitable, and fair, balance between supporting local industry, and safeguarding work- ers' rights. Without a doubt, then, we can- not go for any initiatives – even if they are considered 'socially op- timal': in this case, the most ideal situation imaginable – that will also deliver fatal shocks which our industry, in its current predica- ment, cannot possibly sustain… So what you're saying is that we can forget the living wage? For the foreseeable future: yes. For sure. And whoever says oth- erwise - or proposes any such in- itiative for the immediacy - clear- ly does not have a finger on the economy's pulse right now. How, then, do you intend to counter the problem of poverty: including the issue of a growing contingent of (mostly foreign) workers who are pushed into precarious employment? If there is someone who, for the past seven years, has worked to address the poverty issue, through a number of different measures… that was me. Initia- tives to create employment op- portunities; to support workers in employment; or to wean peo- ple off social benefits, so that they rejoin the labour force… I think I can safely say that I made a small contribution to reduce poverty, insofar as possible. But we also have to acknowl- edge today's realities. If there is anyone out there who still thinks that we should add to local in- dustry's burdens, so that we can make a public show of solidari- ty with workers… do you know what would happen? That same month, those workers will have to register for the dole. We have to be realistic here. Many of our industries are hang- ing by a thread; and we cannot be the ones to give them the kiss of death.