Government responsible for ensuring infrastructure supports economic model – Employers’ Association

The Malta Employers’ Association (Malta Employers) has stressed that it is the Government’s responsibility to ensure that the country’s infrastructure is adequately planned and developed to support the economic model it chooses to pursue.

The association said that determining the country’s economic strategy is government’s responsibility, not the private sector’s.  

Over recent years, economic growth has relied heavily on sustained construction and was encouraged by government’s pro-development policies, it said, noting that construction is, in itself, a highly labour-intensive industry.  

"However, its expansion has also generated further economic activity through the development of hotels, shopping malls and other commercial projects, which are equally dependent on a substantial workforce.  In allowing such development to take place, government knew full well that Malta did not have enough local resources to sustain it and the country would need to resort to foreign workers to fill the gaps.”

The association said that the current growth model chosen by Government therefore created construction, economic activity and employment, but it has also increased the country’s population and placed greater demands on the country’s infrastructure.  “These are matters that require strategic government planning and cannot simply be suddenly transferred to the private sector.”

The role of employers is fundamental to the economy, it said. It said that businesspersons are expected to operate viable businesses, remain competitive and generate profits.  “However, they cannot reasonably be expected to compensate for infrastructure shortcomings or to finance political commitments through additional employment costs, irrespective of productivity, profitability or business viability.”

Such an “indiscriminate approach” risks placing a disproportionate burdens on different businesses operating in sectors with varying labour-intensities and profit margins, thus undermining the very economic model that has driven the country’s growth in recent years, the association said.

The Mata Employers’ Association underlined that the current economic model is heavily dependent on third-country nationals (TCNs), reflecting the fact that the available local labour supply is insufficient to meet the needs of the economy.

TCNs account for approximately 40 per cent of the total workforce, it said. However, this proportion is considerably higher in certain sectors, including catering and hospitality, waste management, and transport and logistics, where their share exceeds 70 per cent.

“This is not a marginal or incidental component of the labour market. It is a structural feature of the current economic model. Any policy that significantly increases the cost of employing TCNs must therefore take into account the extent to which entire sectors depend on this workforce to maintain their operations and deliver essential services.”

“The contradiction is clear: Government cannot continue to rely on an economic model that depends on workers from third-countries while rendering their employment less viable.”

In introducing measures that affect the employment of TCNs, the authorities should consult adequately with the key stakeholders and should avoid making sweeping statements that are certainly not conducive to the strengthening of relationships between employers and government, it said.

Enforcement, not indiscriminate additional costs

With respect to allegations of abuse, the association underlined a distinction between those employers who abuse the system and those who operate responsibly, comply with their obligations and employ foreign workers in an ethical manner.

“Government has a duty to enforce the stringent legislation that already exists in the country. Employers who exploit workers or disregard their legal obligations find no protection with the Malta Employers Association and must be held accountable.  Equally, the agents and intermediaries responsible for facilitating abusive practices must be subject to effective enforcement.”