The Malta Independent
“A freeze on public employment recruitment and on public sector
payroll costs ensuring that benefits are mostly given in re-training
opportunities and in subsidising/promoting transition of excess public sector
personnel to productive jobs.“
For the social pact to be an effective tool of economic
re-structuring, each deliverable has to be consistent with the others so that
collectively from the set of deliverables would emerge a clear sense of
direction.
Deliverables have to reinforce each other and it is futile to have any deliverable (or the omission thereof) which detracts the value or neutralises the benefits of other deliverables.
In deliverables 1 & 2, I argued for the need to re-balance the rights and obligations of employees across the whole spectrum of public/private sector employment and on the need to re-train employees to give them life-long employability rather than the traditional job for life.
In deliverables 3 & 4 I argued for desisting attempts to solve the public sector financial deficit by excessive reliance on revenue collection and new tax measures. So it is obvious and logical that the next deliverable has to concern the expenditure side of the public sector finances.
Government often argues that the discretionary element in government spending is really quite small, as the great majority of expenditure is reflected in the cost of personnel emoluments and programmes and initiatives (including social expenditure) which is quite inflexible. Efforts to roll back discretionary spending, though highly visible from a perception point of view, will not deliver much lasting cure for the fiscal deficit.
This is true up to a point but not good enough to argue that the expenditure side is beyond government’s control and that solutions have to continue being sought on the revenue side. Efforts to roll back the discretionary spending are needed to reverse the dangerous culture of “money no problem” which the present government has imbued in public administration. The decision to cancel Christmas parties will not make much difference to the size of the public deficit but it does send a strong message for the need of culture change. Alas its effect was totally neutralised by the ill-timed decision to replace the prime minister’s main transport configuration.
Granted that social expenditure is inflexible and that any roll back in that area would have deep social consequences as it would effect persons who have no means to protect themselves and generally do not have the opportunity to make further efforts to make up for their loss in any other way. Consequently the major savings on expenditure have to be searched in the emoluments budget column.
Savings in this area have to come from headcount reductions. Few would argue against the existence of pockets, patches or paddles in the public sector of severe over-manning. For these I had suggested the need to engage such excess resources in a retraining programmes and their re-pricing through subsidies into productive private sector employment. So any benefit to the expenditure bill will not be immediate but will accrue over a period of several years and only if the programme is carefully and diligently implemented.
But to stop the haemorrhage a stark decision has to be taken to freeze all public sector recruitment. Now I can hear all sorts of arguments that there are vacancies that need to be filled and that the skill mismatch that exists in the public sector would not allow the posting of excess resources into these vacancies. These are not frivolous arguments.
But if we have to drive the message that government really means business then it is difficult to justify the allowance of any discretion to public sector hiring. Government must make do with what it has as families have to do with what they have when money runs out and just as private sector organisations have to invent ways how to maximise the use of existent resources before undertaking fresh investments when their bank signifies unwillingness to increase financial exposure no matter how good the proposed investment might be.
This will demand a dose of flexibility from existing employees to which they are not accustomed. It would demand the dismantling of layers of unnecessary bureaucracy which adds process but little value. It could involve the merger or several public authorities that should share common resources rather than continue building up duplicate structures.
This would probably stimulate the unions to demand that existing employees should be rewarded for showing this flexibility and for shouldering more responsibility as one person becomes responsible to do a job from start to finish.
Giving in to such demands to increase emoluments of pubic sector employees would eat away any saving in the reduction of headcount and must be resisted. The only exception could be in the few remaining public sector organisations that deliver profits based on commercial competitiveness and not on the exploitation of any natural monopoly. Basically yes to Go Mobile who earn money on the basis of true competition but no to Enemalta who, if they make money, they make money on exploitation of a captive market.
The country cannot afford to pay more for its public servants to do the job which they should have been doing in the first place. If the unions really mean what they say when they argue for job protection, job creation and social pact then they have to bite the bullet and agree that a freeze in intake of public sector employment can only make sense if accompanied by a freeze in the emoluments of public sector employees.
Deliverables have to reinforce each other and it is futile to have any deliverable (or the omission thereof) which detracts the value or neutralises the benefits of other deliverables.
In deliverables 1 & 2, I argued for the need to re-balance the rights and obligations of employees across the whole spectrum of public/private sector employment and on the need to re-train employees to give them life-long employability rather than the traditional job for life.
In deliverables 3 & 4 I argued for desisting attempts to solve the public sector financial deficit by excessive reliance on revenue collection and new tax measures. So it is obvious and logical that the next deliverable has to concern the expenditure side of the public sector finances.
Government often argues that the discretionary element in government spending is really quite small, as the great majority of expenditure is reflected in the cost of personnel emoluments and programmes and initiatives (including social expenditure) which is quite inflexible. Efforts to roll back discretionary spending, though highly visible from a perception point of view, will not deliver much lasting cure for the fiscal deficit.
This is true up to a point but not good enough to argue that the expenditure side is beyond government’s control and that solutions have to continue being sought on the revenue side. Efforts to roll back the discretionary spending are needed to reverse the dangerous culture of “money no problem” which the present government has imbued in public administration. The decision to cancel Christmas parties will not make much difference to the size of the public deficit but it does send a strong message for the need of culture change. Alas its effect was totally neutralised by the ill-timed decision to replace the prime minister’s main transport configuration.
Granted that social expenditure is inflexible and that any roll back in that area would have deep social consequences as it would effect persons who have no means to protect themselves and generally do not have the opportunity to make further efforts to make up for their loss in any other way. Consequently the major savings on expenditure have to be searched in the emoluments budget column.
Savings in this area have to come from headcount reductions. Few would argue against the existence of pockets, patches or paddles in the public sector of severe over-manning. For these I had suggested the need to engage such excess resources in a retraining programmes and their re-pricing through subsidies into productive private sector employment. So any benefit to the expenditure bill will not be immediate but will accrue over a period of several years and only if the programme is carefully and diligently implemented.
But to stop the haemorrhage a stark decision has to be taken to freeze all public sector recruitment. Now I can hear all sorts of arguments that there are vacancies that need to be filled and that the skill mismatch that exists in the public sector would not allow the posting of excess resources into these vacancies. These are not frivolous arguments.
But if we have to drive the message that government really means business then it is difficult to justify the allowance of any discretion to public sector hiring. Government must make do with what it has as families have to do with what they have when money runs out and just as private sector organisations have to invent ways how to maximise the use of existent resources before undertaking fresh investments when their bank signifies unwillingness to increase financial exposure no matter how good the proposed investment might be.
This will demand a dose of flexibility from existing employees to which they are not accustomed. It would demand the dismantling of layers of unnecessary bureaucracy which adds process but little value. It could involve the merger or several public authorities that should share common resources rather than continue building up duplicate structures.
This would probably stimulate the unions to demand that existing employees should be rewarded for showing this flexibility and for shouldering more responsibility as one person becomes responsible to do a job from start to finish.
Giving in to such demands to increase emoluments of pubic sector employees would eat away any saving in the reduction of headcount and must be resisted. The only exception could be in the few remaining public sector organisations that deliver profits based on commercial competitiveness and not on the exploitation of any natural monopoly. Basically yes to Go Mobile who earn money on the basis of true competition but no to Enemalta who, if they make money, they make money on exploitation of a captive market.
The country cannot afford to pay more for its public servants to do the job which they should have been doing in the first place. If the unions really mean what they say when they argue for job protection, job creation and social pact then they have to bite the bullet and agree that a freeze in intake of public sector employment can only make sense if accompanied by a freeze in the emoluments of public sector employees.
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