Chamber of Commerce appeals to Government to extend assistance beyond wages, recommends public sector wage cuts

The Chamber of Commerce has today appealed to Government to extend assistance beyond contribution to wages but should look at helping businesses prepare to have a fighting chance of landing on their feet once the crisis is over.

Perit David Xuereb, President of The Malta Chamber explained: “The assistance Government has afforded businesses so far has already gone a long way, as it has allowed some businesses to keep their employees on board. This will come to their great advantage upon resumption of normal business. But more is needed. While determinate sectors had to close shop due to the partial lock-down, and naturally needed the immediate assistance to avoid mass unemployment, other sectors have been affected by the ripple effect of the same closures. The feeder sectors of the tourism, entertainment, retail, catering and related sectors have also been badly affected as their revenue streams have continued to dry up, and need more assistance in the immediate term”.

The Malta Chamber called for deferments on all forms of taxation, including Income Tax, VAT as well as of Excise Duties in order to help liquidity. It is proposed that rental fees payable to Malta Industrial Parks are waived and those to the Lands Authority are suspended with suspensions applicable to sub-leases. On commercial rents, an equitable system is proposed between landlord and tenant stipulating that, during the crisis, the rent is reduced by a predetermined percentage and if it is not paid, it becomes payable in full.

The Chamber is also recommending amendments to the Companies Act to render liquidations as efficient quick and painless as possible, to limit liability on creditor claims directly related to Covid-19, and to give directors of these companies every fair opportunity for a second chance.

Public sector employees should share in burden sharing

It also continues to be stressed that all economic stakeholders are to share the burden in a spirit of solidarity. This includes public-sector employees who need to contribute in an equitable burden sharing mechanism through wage cuts of not less than 20 per cent with the exception of people engaged in healthcare, the Armed Forces, law-enforcement, cleaning, utility and other essential service providers.

Going forward, the Chamber beliefs that special assistance is to be given to proactive companies that are investing in their future viability in a post-Covid-19 world. While full consideration must be given to health considerations as recommended by the competent authorities, a prolonged shutdown of the economy will exacerbate the damage. It is crucial that the authorities send positive and realistic messages of hope that there will be a gradual re-opening of the economy as soon as it is safe to do so, concludes the Chamber’s statement.