'Complicated balancing act' - first reactions on Budget 2011 from social partners

Joe Farrugia, director general of Employers Association (MEA) said the budget is “an interesting but complicated balancing act.”

In his comments to MaltaToday Joe Farrugia said that government is trying to control its financial deficit and expenditure without laying off  workers from the public service. He said it would be remarkable to see how government will manage to reduce the deficit while increasing its budget for health, education and social services.

"On the one hand, the budget aims to reduce government expenditure by reducing the number of persons in employment in the public sector, setting efficiency targets and cutting abuses. On the other, the budget includes numerous initiatives which will actually increase government expenditure in areas such as education and health, and also in distributive components in welfare spending aimed at improving the welfare of vulnerable groups.

"MEA stated that this is a challenging balancing act which reflects the direction which governments all over Europe are taking to deal with unsustainable levels of debt."

The MEA said that in spite of the positive trends in tourism during 2010, the increase in VAT on hotel accommodation is untimely, "given that the sector is still recovering from two bad years and that austerity measures being taken abroad, particularly in the UK, may have a negative impact on tourism in 2011."

"The Budget is by no means an expansionary budget, as government is struggling to achieve expenditure cuts as painlessly as possible. It is evident that a number of measures proposed by the social partners, such as partial payment for maternity leave, were not taken on board because they were not affordable in the present circumstances. However, the budget also contains incentives and initiatives to maintain the momentum in economic growth experienced in 2010, and it is only through such growth that the fiscal targets can be achieved."

General Workers Union secretary general Tony Zarb said that the budget confirms the heavy burdens carried by workers for these last two years and shows that they will continue to carry them for the foreseeable future.

In a statement, the General Workers’ Union (GWU) said it was disappointed that the Budget does not meet people’s expectations.

“In fact the government has ignored most of the propositions brought forward by the GWU,” the statement reads.

With regards to the cost of living increase the Union said this shall not be enough to help workers and pensioners cope with the increases there were recently and other increases added by the new budget.

“The Maltese were expecting a Budget which would help ease their burdens,” the Union sustained.

 An official reaction from the Union will be communicated on Thursday when the GWU national council meet to discuss the budget measures.

Gejtu Vella, UHM Secretary General, defined the budget as 'balanced'. While addressing the nation’s aspirations to address its economic challenges it also responds to the people’s needs especially those of workers and pensioners. He expressed satisfaction at government for having adopted six proposals made by the UHM.