[WATCH] Finance minister rules out living wage: ‘businesses are hanging by a thread’

Finance minister Clyde Caruana has acknowledged the need for wages to increase, but he is less inclined to commit himself to a living wage, once proposed by Labour and recently adopted as a proposal by the Nationalist Party, saying industry could not be burdened by increased labour costs.

Indeed, he appeared to discount what he termed “socially optimal” positions on increased wages. “Not for the years to come… whoever says so surely does not feel the economy’s pulse. Our industries are hanging by a thread and we cannot give them the kiss of death, or else jobs will be lost.”

Caruana however said he is confident the Maltese economy has more elbow room to be back on its feet thanks to a more comprehensive vaccination programme than other nations.

Interviewed on Reno Bugeja Jistaqsi, Caruana admitted the road to recovery will not be without difficulty, saying the country had to address its challenge to create new jobs as well as ensure better redistribution of wealth, and address its budgetary deficit from the COVID-19 pandemic spend.

“That gap is not a small one. What’s important is that we safeguard jobs… if we don’t it will damage government revenues. I will not be treating jobs as a secondary issue in my role… if we get this right, our finances will be sustainable.”

Caruana, who this week launched a jobs policy in which he called for better upskilling of Maltese workers, said 36% of Maltese workers had low-level skills, when compared to 17% of their EU counterparts. He admitted that Malta does not invest enough in education and training.

He also suggested that increased investment in machinery will be an important part of the future as certain jobs get displaced by automation.

And he discounted the need for raising more taxation if finances are managed diligently.  “If we plan well, I do not see the need for taxation – what we need, is total diligence on our finances,” he said, saying the State should be collecting its rightful dues from taxpayers.