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Message from the UHM Secretary General The progress Malta sustained throughout the past years was possible because of the ongoing social dialogue. In part, social dialogue is an important element of Malta’s resilience to the economic crisis around us. The way Malta weathered the recession is a proof of this. UHM strongly believes that future economic growth depends on the quality of the workforce. Due to demographic ageing it is no longer possible to generate growth from a growing population. To counter the effect of ageing and ensure further prosperity, UHM is calling for an unprecedentat investment in the quality of our workforce through an Active Labour Market Policy (ALMP). An ALMP will not only maximise the labour factor input in our economy, but it will also improve perpetually the skills of our workers. It is only through additional productivity that a better standard of living can be guaranteed to the upcoming generations. Nevertheless, an effective ALMP is possible if there is the input and commitment from all stakeholders. A national consensus is essential for Malta to make the next big leap. That is why we want you to be part of it!

“An effective ALMP is possible if there is the input and commitment from all stakeholders.”

Josef Vella

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A study conducted by UHM shows that Malta will reach an employment ratio of 69% by 2020, roughly in line with the EU27 average. However, research shows that with the current state of affairs it will take till the year 2042 for Malta to reach the average European standard of living. An Active Labour Market Policy encompassing a five-tier set of proposals, can enable Malta to catch up with the EU27 sooner.

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Kick Start the Process A permanent ALMP Central Counselling Team will help secure an efficient and effective policy. ▶▶ The introduction of a holistic and permanent ‘Active Labour Market Policy’ to address the limitations of the local labour market. ▶▶ A permanent ‘ALMP Monitoring Council’ made up of MCESD representatives should be set up to secure an efficient and effective policy. Expertise can be invited on ad hoc basis to provide input as requested. ▶▶ ALMP should be subject to revisions and updates on a five year basis in order to take into account new economic developments and avoid a ‘one-size-fits-all’ approach. ▶▶ Malta should step-up its efforts and participate more in Mutual Learning Programmes organised by European Member States. ▶▶ In collaboration with CEDEFOP, Malta should periodically produce skills reports on a mandatory basis as an indication of the skills required in order to tap potential business opportunities that might arise. ▶▶ A ‘Skills Council’ should be set up involving social partners and other prominent members to regularly meet, discuss and update the training strategy to cater for the latest developments in the demand for skills. ▶▶ In the medium term (4-6 years), expenditure on ALMP should increase and reach the EU27 average of 0.7 per cent of GDP.

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An education system which delivers Proactivity as an ingredient for effectiveness ▶▶ A census amongst school leavers on a longitudinal basis to follow and determine the motives and reasons behind early school leavers at the age of 16. ▶▶ Similar to other educational institutions, MCAST should introduce tracer studies. ▶▶ In line with tracer studies, guidance reports should be disseminated on an annual basis to all relevant stakeholders in order to increase awareness of labour market demand. ▶▶ Education courses that fail to meet up market requirements should embrace revisions and updates to enhance their effectiveness.

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Shifting our focus Opportunities exist for the ETC to refocus its efforts towards providing targeted, personal employment services, and market regulation. ▶▶ ETC should take the role of ‘market regulator’ and further enhance its efforts towards its original core competencies (i.e. Personal Employment Services). ▶▶ The training market should be liberalised and strictly regulated by ETC in an effort to get more value for many while the quality of service improves. . ▶▶ It should be legally binding for ETC to publish audit exercises of its tasks as suggested by the National Audit Office. ▶▶ An increase in the number of PES personnel can reduce unemployment spells of jobseekers through better follow-ups as well as improve the participation rate of clients in basic skills programmes through more focused targeting.

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Putting More People to Work Decisively stimulating all-round participation into the labour market. ▶▶ A national training plan should be implemented to enhance the skills and employability of inactive people. ▶▶ The setup of more childcare facilities to encourage parents and grand-parents to participate in the labour market. ▶▶ The introduction of in-work-benefits to encourage further participation of households with low work intensity and inactive persons with limited skills. ▶▶ Government should consider transferring part of social benefits into a form of employment-benefit to stimulate employment. Such measures should lower the benefit trap for beneficiaries who are 40 years of age or younger.

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Enhancing human capital Giving priority and addressing resources to Employment and Training schemes which are clearly targeted, and which are proactive to current and future needs. ▶▶ Future employment-subsidy should be more target-oriented to minimise economic welfare losses. ▶▶ Sound, periodical evaluation studies should be engaged to determine the effectiveness and efficiency of employment-subsidy schemes. ▶▶ Publicly financed employment-subsidy for vulnerable or disadvantaged persons should be engaged on a permanent basis. ▶▶ Productivity gains are attributable to the extent of skills. Resources spent on training must not be subject to availability of EU funds, but alternative funds should be permanently allocated for training services. ▶▶ Tax rebates that deduct the full amount of training costs from the income-tax should be engaged to motivate firms to invest more in their employees. ▶▶ To encourage Corporate Social Responsibility, government should regulate a minimum level of expenditure on training with regards to medium and large firms. ▶▶ Trade-unions must put training budgets at the forefront of collective agreement negotiations. ▶▶ Malta should introduce the concept of ‘notional training accounts’ where the unemployed ‘shop’ around for training services. ▶▶ Training programme schemes should be audited to ensure effectiveness and efficiency.

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ALMP 2020 Targets Increase in Employment Ratio (20-64) Current Malta EU 27

62.8% 68.6%

Baseline Projection 69.0% 72.1%

Target (with ALMP) 72.0% -

Change (through ALMP) +3.0% -

Improvement in Workforce by level of Education ISCED level 0-2 3-4 5-6

Current 54.4% 23.7% 21.9%

Baseline Projection 48.9% 23.7% 21.9%

Target (with ALMP) 45.0% 27.0% 28.0%

Change (through ALMP) -3.9% +3.2% +0.7%

Expenditure on ALMP as a percentage of GDP Current 0.15%

Target (with ALMP) 0.70%

Change (through ALMP) 0.55%

Decrease in Long-Term Dependants (<40 years) Current 9,000

Target (with ALMP) 6,000

Change (through ALMP) -3,000

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The idea behind the proposal of the Active Labour Market Policy took off in a process for the preparation of the proposals of the Union Ħaddiema Magħqudin (UĦM) for the Budget 2012. In the picture, the President of the UĦM is addressing the press of November 2012 wherein the Active Labour Market Policy was first made public.



UHM Booklet