Amid European austerity, Malta keeps public workforce half-days

A right-of-reply from Malta Enterprise appears below

Can it be a paradox to rejoice as Malta is doing well in 2013, having registered the fourth lowest unemployment rate in 28 EU countries; or for the daily sight of a recovering economy with improved tourist arrivals, new investment and a respectable 1.9% GDP growth in the first quarter?

Some may ask if this is some 'Borg-in-Nadur' miracle: the truth is that we are still borrowing to match our living expenses and with a national debt approaching a ratio of 75% of GDP, all this bonanza needs to be repaid back with interest in the coming years.

The economy has grown in recent years with GDP at constant prices growing at an average of over 4.3% per annum during 2007-2010 (based on estimates) except for 2009 when the economy contracted.

But gainfully employed persons include a relatively high percentage in the public sector (27.6% as at 2011 - about 37,000 including state agencies) with a 7:45am-5:15pm winter timetable with 45 minutes' break, followed by three and a half months of summer reduced hours starting 7:3am to 1:30pm with no break.

Unions remind us that employees work 45 minutes extra every day during the winter months to make up for the hours they take off in the afternoon between 16 June and 30 September. But many government departments still open in the afternoons in summer because the workload is too much for them to close shop at 1:30pm. This means that employees are paid overtime, adding to the financial burden of the country.

Strangely, the last collective agreement signed by the outgoing PN government a few weeks before the election improved the conditions by adding a number of family-friendly measures. Unions fight tooth-and-nail to preserve the status quo, saying that several departments adopt different timetables that include even longer hours in winter and even in summer. This is normally done by creating flexible hours for employees and adopting a voluntary scheme where an employee can choose to work longer hours after 1:30pm and then have the hours worked extra, compensated as time off at the normal rate of one hour per one hour.

Unions are very pleased to remind industrialists that such systems do not incur any extra costs but the paradox remains - at times when governments all over Europe are seeking to curtail budget deficits through fiscal consolidation and a leaner labour force in the public sector, it is clear that locally the government and unions must face reality and stop supporting outdated labour practices that contribute to inefficiencies and inflate public expenditure.

For its part, the Chamber of Commerce believes that the half-day system certainly needs revisiting, and has been suggesting it for a number of years. The employers' association says that our country surely cannot afford such a luxury which is reminiscent of the balmy days in the past, when as a British colony the officers in charge retired after lunch with a few gin and tonics while sahib packs his bags at 1pm pm and heads home to till the fields and attend to other chores.

Now 50 years after independence and public officers not exactly sweating in air-conditioned offices, can still enjoy relaxed sunny afternoons at the beach while the private sector toils to earn its keep in the busiest season of the year.

Quick on the rebound the unions reply that half-days are part of the family-friendly measures that enable employees to spend more time with their family when children are on holiday.

Nonetheless, unions cannot agree with the argument that lower competitiveness due to closing government offices at 1:30pm is enough reason and justification to eliminate the present half-day system.

By sheer comparison, as private enterprise is trying to cope with extra pressures from a sluggish European market, it is concerned with measuring and timing its operations and increasing its efficiency in every corner of its business to survive and maintain employment levels. It tries to maximise the use of human and financial resources on a continuous basis to derive optimum value for money spent in the business and to get a good return.

So why is it that in Malta, since Independence no political party has ever tried to eliminate half-days?

Even Malta Enterprise, which is funded to attract overseas investment, informs visitors that offices will be closed between the 13-17 August for summer shutdown to resume on 20 August until the end of the month. It will be open for business from 8am-1:30pm but as a concession the "Business First" unit operates on extended hours on Wednesdays until 4pm.

Can one be envious of such government employees?

Portugal's parliament approved the government's austerity package to cut the wages of some top-paid civil servants. Germany follows hot on the heels as it aims to save around €80 billion by slashing welfare spending by €30 billion and cut public sector payrolls by up to 15,000 by 2014, and raise new taxes on nuclear power plant operators and air travel.

Spain has been cutting civil service salaries by 5% since 2010 and frozen the rest after 2011, while more than €6 billion will be cut from public investment. Italy has approved a €24 billion deficit cut and introduced measures such as delaying retirement dates by between three and six months, a state salary freeze and cuts of high public sector earners.

France will cut state operating costs by 10% and Greece, the hardest hit by recession, will impose a public sector pay freeze until 2014 and has abolished Christmas, Easter and summer holiday bonuses, also known as 13th and 14th month salaries, for civil servants earning above €3,000 a month and has capped these at €1,000 for those earning less.

The litany of austerity measures introduced by countries which import our manufactured products - or chose our beaches for vacation - is inconsistent with the Malta budget proposal to cut income tax on managers' salaries from 35% to 25% in the next two years.

The day of reckoning will arrive when we have to report a marked improvement in our finances to Brussels and declare that our budget deficit goes down markedly below the statutory 3% limit. As they say, the public service is the holy cow, an untouchable; and while no tears have been shed on the redundancy of the massive workforce at the shipyards, the civil service is unashamedly cocooned in a cast iron shell.

Can we repent in 2014, wary of Greece which learnt the bitter lesson and now started to trim down its army of sheltered pen-pushers?

A prosperous New Year to all readers.

George Mangion is a partner in PKF, an audit and business advisory firm

[email protected]

Malta Enteprise replies (3/1/2014)

Contrary to the impression given in your article, Malta Enterprise does not practice any longer the one week of shut-down during the month of August, or any other month of the year for that matter. This follows a decision taken in the later months of the year 2012 to cancel this practice. Moreover, it is only during the month of August that Malta Enterprise personnel work on half-days.
 
It is important to note that as of August 2013, an immediate response team led by senior officials has been available and accessible to the public on each and every weekday in August except August 15.
 
During the rest of the year Malta Enterprise is open for business during normal business hours. Meetings outside normal working hours including weekends are possible (and not infrequent) by appointment.
 
Regarding Business First opening hours, it should be noted that, apart from the month of August, the unit remains open until 19:00 hours every Wednesday