National reform programme 2008-2010 Malta - European Commission

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Malta’s NRP 2005-2008 Closure Report In its National Reform Programme for the period 2005-2008 Malta had submitted 54 measures on which progress had to be reported for the same period. A status of these measures is being highlighted in this section. The measures follow the pre-established five pillars on which Malta’s NRP 2005-2008 hinged namely; Sustainability of Public Finances, Competitiveness, Employment, Education and Training and Environment. Sustainability of Public Finances In the first phase of its NRP, Malta has given a lot of importance to its macroeconomic situation. One of the main reasons for such importance is the run up to the adoption of the Euro on the 1 st January 2008. Prior to adopting the Euro, Malta had to comply with the Convergence Criteria and its admission to the Euro Area is an independent certification of this achievement. Another important issue that has been addressed is the sustainability of pensions by initiating the reform of the pension system as outlined in the White Paper “Pensions, Adequate and Sustainable”. Since this reform is a long term measure no clear indicators are as yet available that can provide a more accurate picture of the effectiveness of this measure The general Government debt 1 has decreased from 70.4% in 2005 to 62% in 2007. As mentioned above this was particularly important in the light of Malta’s adoption of the Euro in 1 st January 2008. Moreover, the reduction of public expenditure allows the savings gained to be channelled in other areas that would be more beneficial to the country as a whole. Below is the state of play of the measures that fall under the pillar of Sustainability of Public Finances. Measure 1.1 Review the existing taxation framework in order for taxation policy to encourage work and productivity (within the framework of sustainable public finances) This measure has been implemented through the Budget Measures announced in the Budget Speech 2006 and 2007 and includes: • A reform of the income tax bands in order to provide a greater incentive to those who want to work harder. It is estimated that this measure will cost the Government approximately m12 million (€28 million) in revenue; • A stipulated timeframe in which to pay tax refunds owed by the Inland Revenue Department; • A tax credit for women returning to employment, where women will benefit from a tax credit of Lm700 (€1,631) subject to certain conditions; • An amendment to the Part time work rules to enable women and their husbands to benefit from married rates in the case of women in part time employment. • Recognition of both spouses working in family businesses thus being eligible for social benefits and pensions; • A change in the computation of part time employment where the social security contribution has been adjusted to a percentage of income earned as opposed to the previous system where a minimum had to be paid irrespective of the hours worked. 1 General government consolidated gross debt as a percentage of GDP Malta National Reform Programme 2008-2010 - 2 -
Measure 1.2 Enhance price flexibility through the liberalisation of monopolies and actively considering liberalising entry into certain service sectors particularly in the distribution, transport and construction sectors, commencing with the liberalisation of the importation and distribution of fuel and the ports sector Government is firmly in favour of liberalisation, and has liberalised a number of sectors in which the government was the major provider of services. Among the liberalisation initiatives in the past three years one finds the port sector, fuel distribution as well as telecommunications; both cellular and fixed line. Moreover, the provision of postal services has also been passed on to the private sector, with the whole sector to be liberalised in due course following Malta’s choice to allow for the maximum term under the EU directive to elapse before fully liberalising the sector , by the 31st December 2012. Measure 1.3 Review spending aiming at setting agreed departmental targets for achieving efficiencies in the use of public resources. Efficiencies include savings in terms of public expenditure as well as the redeployment of human resources The Financial Management and Monitoring Unit (FMMU) has been set up as a permanent unit within MFEI. FMMU is to ensure that all entities necessarily administer Public Funds within stricter financial control, discipline and cost effectiveness and to aid the Government in reducing public spending and managing the country’s deficit, which aims are central to sustainable economic growth, convergence targets and Malta’s International Credit Rating The Benefit Fraud and Investigations Directorate within MSOC was set up in late 2005 to combat reports on alleged social benefit fraud. During the period 2006-2007 the Benefit Fraud and Investigation Directorate concluded investigations on 2,372 cases of alleged social benefit fraud and it is estimated that the combined operations of the Directorate resulted in an estimated Lm3,000,601 (€6,991,400) in savings. Malta reduced its expenditure particularly in the run up to the adoption of the Euro prior to January 2008 to be in conformity with the Maastricht criteria. In fact, Malta reduced its deficit from 3% in 2005 to 1.8% of GDP in 2007. 2 For the same period General Government debt was reduced from 70.4% to 62.6% of GDP. Measure 1.4 Further review of the public sector workforce, identifying the core competencies and staff requirements in Government entities and the attachment of the surplus staff to a Surplus Employment Pool In November 2003, 902 employees were transferred to Industrial Projects and Services Ltd (IPSL). Out of these 418 opted to apply for one of the four voluntary resignation / early retirement schemes. The remaining 484 preferred to remain on the books of IPSL on the grounds that Government would guarantee their employment within various public entities and departments. Today only 433 employees remained from the original number transferred from Malta Shipyards Ltd due to retirement age. However, these were increased to 479 with the transfer of surplus employees from other entities/corporations. Recently, the company organised a skills assessment exercise; all employees were interviewed so as to enable the company to asses the skills and abilities of every employee. This exercise resulted in the transferring of 124 employees from one entity or department to another so as to be better utilised according to their trade or profession. In some cases IPSL staff had to be re-trained to be able to cater for office environment or in enforcement as was the case of the environment field inspectors at MEPA. Concurrently, the Management Efficiency Unit has also prepared a skills profiling manual in order to serve as a guideline in profiling skills across the Public Service. 2 NSO News release dated 18th April 2008 available online at http://www.nso.gov.mt/statdoc/document_file.aspx?id=2220 (last accessed on 29 th September 2008) Malta National Reform Programme 2008-2010 - 3 -
Page 2 and 3: Contents List of Acronyms..........
Page 4 and 5: Conclusion.........................
Page 6 and 7: IT Information Technology SCM Stand
Page 8 and 9: Introduction The renewed Lisbon Str
Page 12 and 13: Measure 1.5 Redeploy Government emp
Page 14 and 15: Measure 1.12 Promote public service
Page 16 and 17: Measure 2.1.3 Develop SME loan guar
Page 18 and 19: Measure 2.4 Enhancement of existing
Page 20 and 21: In July 2008 Malta experienced a 1.
Page 22 and 23: Moreover, Government has set its vi
Page 24 and 25: The first phase of this initiative
Page 26 and 27: Between 2005 and 2006, 37 22 partic
Page 28 and 29: A consultation paper on the introdu
Page 30 and 31: Measure 4.7 Establish a forum betwe
Page 32 and 33: Within this context, an MPA Steerin
Page 34 and 35: The main plant of Sant Antnin is be
Page 36 and 37: Political Summary The re-launch of
Page 38 and 39: Addressing Malta’s Specific Recom
Page 40 and 41: Whereas it may be confidently ascer
Page 42 and 43: Table 2 - Key State Aid Indicators
Page 44 and 45: Older workers Increasing the employ
Page 46 and 47: Implement changes to the tax and be
Page 48 and 49: Containing public health care expen
Page 50 and 51: Within this context the existing Bu
Page 52 and 53: Raising educational attainment and
Page 54 and 55: • a number of policy reviews whic
Page 56 and 57: Macroeconomic Policies Recent Econo
Page 58 and 59: The improvement in the current acco
Page 60 and 61:
Vision and Objectives Stable macro
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The generally widespread trend in E
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This high degree of decentralisatio
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Microeconomic Pillar The turbulent
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• 5 IOs concerning Financial Serv
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The ongoing screening process has i
Page 72 and 73:
The results of this investment have
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In this respect, energy efficiency
Page 76 and 77:
Employment Increasing the overall e
Page 78 and 79:
The opposite is true for those with
Page 80 and 81:
The project will help young people
Page 82 and 83:
This process aims to facilitate the
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In addition, MCAST is embarking on
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Apart from the Faculty of ICT, the
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• the Implementation of an on-goi
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Appendix: 01 - List of Measures
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3.4 Manufacturing research projects
Page 94 and 95:
9.0 Addressing Groups at Risk 9.1 E
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15.5 Upgrading of Zewwieqa Waterfro
Page 98 and 99:
Appendix: 02 - Flexicurity Measures
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key competencies to adult learners
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National reform programme 2008-2010 Malta - European Commission

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