Re-Thinking Budget Measures

The Malta Independent - Friday Wisdom

Having analysed, in past contributions, the general orientation of the 2005 budget and its insufficiency to even come anywhere near addressing our economic ailments, I propose today to comment specifically on two budget measures which appear to have been thought through quite scantily.

The doubling of the airport tax from Lm10 to Lm20 has come in for particular criticism from various quarters. Not that any form of increased taxation ever finds wide or even narrow support, but this particular fiscal measure has jarred across the board.

Whatever its legal niceties it is a discriminatory tax against Malta resident air travellers. Coming so soon after gaining the freedom to do business and work without barriers throughout the EU, it is not just a pinch on our pockets; it is a moral slap on the face.

MEP Dr Simon Busuttil (PN) wrote a detailed and learned opinion this week in The Times explaining that under various criteria this measure could be challenged under EU law. Such an opinion, coming from quarters that are actually representing the party in government in the European Parliament, could only be discarded with disdain.

Travelling out of Malta through its sole airport was already expensive as it was with Lm6 airport charge (levied by MIA plc) being dwarfed by a Lm10 airport fiscal tax. Government could certainly have found a better source to raise the additional fiscal revenue that this measure is intended to raise. I can name half-a-dozen such sources in one breath but that would make me six times more unpopular than is really necessary. Government would do well to reconsider replacing this fiscal measure with something less challengeable and less morally offensive.

The other measure, which seems easily challengeable, is the removal of the days of leave-in-lieu to replace public holidays that fall on a weekend. Not that such a measure is unreasonable. But many collective agreements are locked into such a measure and employers are unlikely to have the appetite to challenge the legality of such agreements that they have signed.

Maybe there is scope for this measure to be re-packaged to achieve the same aim without entering legal minefields which will annihilate its intended benefits.

Ultimately, the solution must be focused on a re-definition of public holidays. We must be the only country in the world that celebrates five national days with public holidays. Let’s celebrate five national days if it helps to achieve consensus across the political spectrum. But do we need to have them all as public holidays?

I suggest that serious consideration be given to the celebration of one national day each year as a public holiday. This could be done on a rotation basis to avoid entering into political minefields regarding the choice of the one to celebrate. The other four are then celebrated on the weekend nearest to the actual day.

Is it such a big deal if, in the spirit of redeeming the country from the economic morass we have driven into, we give up four fifths of our statehood celebrations and work them through to ensure that we protect the economic viability of such statehood?

Such re-definition of the national day public holidays would not infringe the collective agreements signed between unions and employers and would avoid the legal quagmire as to whether government has a right to upset what was specifically contracted in such agreements. Collective agreements generally provide for official public holidays to be paid holidays and for public holidays that fall on weekends to be compensated by extra days of leave. They do not bind government’s hands in the definition and quantity of public holidays.

The proposed measure would produce four extra working days each year, which is a much bigger contribution to enhanced competitiveness than the measure announced in the budget as it currently stands.

And once we are at it, we should also consider whether, excluding some very date-specific public holidays (basically Christmas, New Year’s day, Good Friday, First of May and 15th August), we should negotiate a package whereby employers are given the option to work the other public holidays and compensate by giving extra days of optional leave or shut-down.

Without changing the quantity of hours of work, such a measure would greatly increase the efficiency of the production flow which is quite often interrupted by mid-week holidays.

It is never too late to admit not having thought through measures well enough and that some adjustment would make them more acceptable and more effective.