Issue link: https://maltatoday.uberflip.com/i/1528582
14 maltatoday | SUNDAY • 27 OCTOBER 2024 BUDGET 2025 MATTHEW FARRUGIA mfarrugia@mediatoday.com.mt The Budget 2025 wish list: Social economic model, workforce review, A new economic model, en- hanced infrastructure, and the efficient use of employees within the public sector are at the top of social partners' wish lists for next year's budget. With the Finance Minister's yearly budget speech only a few hours away, MaltaToday takes a look at what some of the coun- try's top lobby groups and un- ions would like to see in Budget 2025. A new economic model Once again, social partners are urging government to look ahead and change Malta's eco- nomic model, as they emphasise a shift away from labour-inten- sive activities and a vision which doesn't depend on population growth. In their pre-budget document, the Malta Chamber called for a tangible transformation of the current economic model, urging government to set up a "well-be- ing economy which benefits so- ciety at large." Likewise, the Malta Employer's Association (MEA) matched the Chamber's appeal in its urgency. The employers' lobby believes that Malta's economic transfor- mation should keep the coun- try's physical and demographic realities in mind. In their pre-budget docu- ment, the MEA noted that the construction industry employs roughly the same amount of people as the manufacturing sector. "This situation reveals a strong dependency of econom- ic growth on construction," the lobby group said, as they ap- pealed for a shift towards high- er value-added manufacturing and services industries that can achieve economic growth with- out compromising the environ- ment. Concerns over Malta's current economic model and its strains on the quality of life were echoed by trade union, UĦM - Voice of the Workers. The union pro- posed a study to determine the capacity of the islands' current infrastructure, and a long-term economic plan that takes in- to account demographic reali- ties. In an interview with Mal- taToday, UĦM's boss, Josef Vella acknowledged that a shift in economic model cannot be achieved in one budget, noting however that the country's next economic model should be qual- ity-centred. Labour market Similarly, to worries about Malta's economic model, social partners agree that challenges within the labour market are at the forefront of issues which need to be addressed. Ahead of the budget, the MEA appealed for a "rationalisation of the labour force." Among em- ployers' woes tied to the labour market is a public sector "riddled with underutilised personnel that can be more productively employed." The employers' lob- by seems irked by increases in pay packages for public sector workers, as they called for meas- urable key performance indica- tors to justify such hikes. Among the MEA's most bold proposals for a stronger local workforce was the increase of the effective retirement age while discouraging early re- tirement. They also suggested tax-exempt pensions for those who are still in employment and the self-employed. This proposal was shared by the UĦM, that called for pen- sioners who continue contrib- uting to the labour market to receive an untaxed pension. Meanwhile, the Malta Cham- ber proposed the elimination of "the disincentive for the second spouse (often the female) from taking up gainful employment by revising income tax catego- ries such that working parents benefit from married tax rates irrespective of whether their spouse is in gainful employment or not." Similarly to the MEA, the Chamber also voiced its concern over the private sector's unfair competition for labour with the public sector. To address this, the Chamber called for an in- dependent study that reviews all job roles within the public sector, as well as removing half- day schedules for public sector employees, as the lobby noted businesses cannot compete with such conditions. Mandatory union membership Mandatory union membership was a key proposal put forward by the General Workers' Union (GWU), something it has been harping on for years. The un- ion believes this will ensure all workers are treated with dignity and could benefit from collec- tive bargaining thus improving their incomes. However, while the government has consistently hinted it is in favour of mandato- ry union membership, employ- er organisations are opposed, Finance minister Clyde Caruana (right) at a meeting of the MCESD