The Malta Independent on Sunday
Quoting from Bloomberg last Friday: `Oil in New York has declined 26 percent from a record of $55.67 on Oct. 25.2004.Crude oil for January delivery fell $1.48, or 3.5 percent, to $41.05 a barrel at 1:09 p.m. on the New York Mercantile Exchange.
The Prime Minister in his budget speech on 24th November 2004 stated `This year the international price of crude oil exceeded US$50 (per barrel)` thereby implying that the 17% surcharge` on utility bill is the direct result of such an increase in the price of crude oil.
If this were truly so the Prime Minister could announce the withdrawal of the surcharge as the price of crude oil has dropped by 18% from the US$ 50 mentioned in the budget speech and by more if compared to the more than US$50` benchmark. Since budget day the US$ has depreciated by 1.26% against the Maltese Lira so in Lm terms the price of crude oil has dropped by 19%.
But reality is that notwithstanding the impressions given in the budget speech, the surcharge has nothing much to do with the price of crude oil and much much more to do with the fact that the adjustment made to honour easy electoral promises to roll back the increased utility rates that brought down a Labour government in 1998, is proving unsustainable. Equally the measure of withdrawal of all subsidies relating to kerosene which was depicted so unsocial by the PN opposition when proposed by Labour government of 1998 and immediately rolled back upon re-election, is now no longer unsocial and needs to be re-instated exactly as Labour had proposed in 1998.
Rather than promises of roll-back, for political self-interest, of tough measures taken by Labour governments in order to avoid waste and maintain competitiveness, we now have to roll-back our sleaze.
The very first thing a new PN government did when elected in 1987 was the restoration of` six public holidays that Labour had abolished when it had legislated the four weeks minimum leave entitlement in the conditions of employment act. Furthermore plans were announced to increase the annual vacation leave by 5 days, one each year over a period of five years. Eventually one was taken away when `sette gugno` was elevated to the national day status and an extra public holiday was instituted. So now we have 24 days leave ( those working five day week) and 13 public holidays, a minimum of 37 work ` free days apart from weekends.
17 years later we are now being told that we can`t afford so much holidays and we have to start rolling them back. I agree, but it is fair to remind that political opportunism has cost us dearly in terms of global competitiveness and that it was irresponsible to give such easy promises purely to gain access to power through the abuse of those voters who misguidedly believe that governments have the power to overcome the rules of economics and behave like Santa the whole year round. Again we have to roll-back our sleaze.
Now I agree that measures like the ones announced in the Budget, for public holidays that fall on weekends not be replaced by additional vacation leave as the law presently stipulates, is much less than the minimum required to truly make a difference to our competitiveness. On the other hand I appreciate that the Unions cannot be expected to subscribe voluntarily to such measure.
However, given the grim economic situation of which the Unions are aware more than most, I would expect the Unions to condone or tolerate the measure, under protest and against their wishes, as a token gesture by the workers to re-establish national competitiveness.
This gives rise to an interesting point of reflection. The social democratic system of which we are so proud has an inherent defect.` Every time that the economy passes through a bad patch, either because of external forces or because of bad internal management , the workers have to carry a disproportionate share of the load that has to be carried to get the economy back in shape again. It is not fair, but that`s how it is, inevitably.
Attempting to shift the burden of adjustment on the entrepreneurial class, the investment providers and risk-takers, proves counter-productive as they would withhold the investment needed to kick-start the economy. Quite often rather than forced to carry an additional burden they have to be caressed with tax breaks and incentives to stimulate their participation through their increased investments.
Shifting the burden of adjustment on the not economically active, the pensioners, the sick and the unemployed is socially irresponsible, unacceptable in a social democracy and conducive to serious loss of social cohesiveness without which investment will hold back.
So all that`s left in the middle is the whole body of workers, the economically active, who will have to roll back their past gains in order to restore the country`s international competitiveness. This could come in many forms. It could come in the form of a wage freeze where workers are expected to become more productive without expecting wage increases. It could come in the form of increased hours of work without additional pay. The proposal for non replacement of public holidays that come on weekends fall in this category. This very same week the French government rolled back the 35 hour week introduced by the former socialist government and re-established the longer week between 40 -48 hours as agreed at company level without any automatic pay increases for the additional working hours. In Germany, unions at Siemens and Volkswagen had to make similar concessions to dissuade these corporations from moving their plant to lower cost locations.
It could come in the form of devaluation of the currency which reduces the real value of the wages or it could come through acceptance of additional work, more flexibility and wider responsibility without additional compensation.
In whatever form or shape it comes, the workers, unjustly but inevitably, have to carry the brunt of the adjustment.
So the next time workers are offered by loose talking politicians a free lunch in the form utility bills below their real cost, additional holidays without loss of pay or similar Santa Claus bonanza, it would be very appropriate for the workers to remind themselves that free lunches don`t exist and that ultimately they will have to pay the price of adjustment through the loss of their job or rollback in their standard of living.
When they have to choose between sleaze and serious talk, workers could opt for sleaze only at their own expense.
Quoting from Bloomberg last Friday: `Oil in New York has declined 26 percent from a record of $55.67 on Oct. 25.2004.Crude oil for January delivery fell $1.48, or 3.5 percent, to $41.05 a barrel at 1:09 p.m. on the New York Mercantile Exchange.
The Prime Minister in his budget speech on 24th November 2004 stated `This year the international price of crude oil exceeded US$50 (per barrel)` thereby implying that the 17% surcharge` on utility bill is the direct result of such an increase in the price of crude oil.
If this were truly so the Prime Minister could announce the withdrawal of the surcharge as the price of crude oil has dropped by 18% from the US$ 50 mentioned in the budget speech and by more if compared to the more than US$50` benchmark. Since budget day the US$ has depreciated by 1.26% against the Maltese Lira so in Lm terms the price of crude oil has dropped by 19%.
But reality is that notwithstanding the impressions given in the budget speech, the surcharge has nothing much to do with the price of crude oil and much much more to do with the fact that the adjustment made to honour easy electoral promises to roll back the increased utility rates that brought down a Labour government in 1998, is proving unsustainable. Equally the measure of withdrawal of all subsidies relating to kerosene which was depicted so unsocial by the PN opposition when proposed by Labour government of 1998 and immediately rolled back upon re-election, is now no longer unsocial and needs to be re-instated exactly as Labour had proposed in 1998.
Rather than promises of roll-back, for political self-interest, of tough measures taken by Labour governments in order to avoid waste and maintain competitiveness, we now have to roll-back our sleaze.
The very first thing a new PN government did when elected in 1987 was the restoration of` six public holidays that Labour had abolished when it had legislated the four weeks minimum leave entitlement in the conditions of employment act. Furthermore plans were announced to increase the annual vacation leave by 5 days, one each year over a period of five years. Eventually one was taken away when `sette gugno` was elevated to the national day status and an extra public holiday was instituted. So now we have 24 days leave ( those working five day week) and 13 public holidays, a minimum of 37 work ` free days apart from weekends.
17 years later we are now being told that we can`t afford so much holidays and we have to start rolling them back. I agree, but it is fair to remind that political opportunism has cost us dearly in terms of global competitiveness and that it was irresponsible to give such easy promises purely to gain access to power through the abuse of those voters who misguidedly believe that governments have the power to overcome the rules of economics and behave like Santa the whole year round. Again we have to roll-back our sleaze.
Now I agree that measures like the ones announced in the Budget, for public holidays that fall on weekends not be replaced by additional vacation leave as the law presently stipulates, is much less than the minimum required to truly make a difference to our competitiveness. On the other hand I appreciate that the Unions cannot be expected to subscribe voluntarily to such measure.
However, given the grim economic situation of which the Unions are aware more than most, I would expect the Unions to condone or tolerate the measure, under protest and against their wishes, as a token gesture by the workers to re-establish national competitiveness.
This gives rise to an interesting point of reflection. The social democratic system of which we are so proud has an inherent defect.` Every time that the economy passes through a bad patch, either because of external forces or because of bad internal management , the workers have to carry a disproportionate share of the load that has to be carried to get the economy back in shape again. It is not fair, but that`s how it is, inevitably.
Attempting to shift the burden of adjustment on the entrepreneurial class, the investment providers and risk-takers, proves counter-productive as they would withhold the investment needed to kick-start the economy. Quite often rather than forced to carry an additional burden they have to be caressed with tax breaks and incentives to stimulate their participation through their increased investments.
Shifting the burden of adjustment on the not economically active, the pensioners, the sick and the unemployed is socially irresponsible, unacceptable in a social democracy and conducive to serious loss of social cohesiveness without which investment will hold back.
So all that`s left in the middle is the whole body of workers, the economically active, who will have to roll back their past gains in order to restore the country`s international competitiveness. This could come in many forms. It could come in the form of a wage freeze where workers are expected to become more productive without expecting wage increases. It could come in the form of increased hours of work without additional pay. The proposal for non replacement of public holidays that come on weekends fall in this category. This very same week the French government rolled back the 35 hour week introduced by the former socialist government and re-established the longer week between 40 -48 hours as agreed at company level without any automatic pay increases for the additional working hours. In Germany, unions at Siemens and Volkswagen had to make similar concessions to dissuade these corporations from moving their plant to lower cost locations.
It could come in the form of devaluation of the currency which reduces the real value of the wages or it could come through acceptance of additional work, more flexibility and wider responsibility without additional compensation.
In whatever form or shape it comes, the workers, unjustly but inevitably, have to carry the brunt of the adjustment.
So the next time workers are offered by loose talking politicians a free lunch in the form utility bills below their real cost, additional holidays without loss of pay or similar Santa Claus bonanza, it would be very appropriate for the workers to remind themselves that free lunches don`t exist and that ultimately they will have to pay the price of adjustment through the loss of their job or rollback in their standard of living.
When they have to choose between sleaze and serious talk, workers could opt for sleaze only at their own expense.
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