Reactions to Budget 2023
The Malta Chamber of Commerce
Bolder measures needed for a more sustainable economic growth model – Chamber
The Chamber of Commerce said that it is evident that Government is using all the financial resources it has available to maintain stable energy prices and to safeguard the spending power of lower income groups against the backdrop of persistent inflation. This is essentially a policy of preservation of our economy – with all its strengths and weaknesses. We would have liked to see more ambition with respect to sustainability beyond the continuation of existing schemes for the purchase of electric vehicles. We would also have liked to see more tangible support with respect to innovation and new economic niches that can guarantee sustainable economic growth.
It is positive to note that Government acknowledges that in spite of all the investment in roads and free public transport, traffic congestion has not improved and is therefore seeking to engage with stakeholders to limit circulation of certain service vehicles before 9am. Similarly, it is encouraging to see The Malta Chamber’s proposal for the establishment of a Board for the assessment of quality and aesthetics features of new developments taken on board. These two relatively minor proposals are examples that can improve the quality of life of people. The bulk of proposals are actually directed at maintaining spending power rather than improving quality of life. While subsidising energy and maintaining spending power is good for business, the country needs a longer-term strategy to be future-ready.
The financial projections presented rely on Government’s ability to raise funds through the issue of Government stocks and presume a modest negative impact on our exports against the prospect of a looming recession in Europe. The extent to which a recession in Europe will impact our manufactured exports as well as tourism will be a determining factor for the performance of our economy in 2023.
SME Chamber
A budget of continuation that safeguards Malta from energy price hikes but more action on other crucial challenges for business missing
The Malta Chamber of SMEs welcomes the continued confirmation that the Government will be extending the safety net of protecting Malta from the international hikes of energy prices. This is by far the biggest threat Malta is facing at the moment.
Another positive element found in this Budget is the extension and widening of the Rent Subsidy Scheme, as proposed by the Malta Chamber of SMEs, that will help Malta mitigate the impact of freight costs. Positively noted is the work being done to tackle issues with banking services and the increased importance being given to aesthetics in the development of buildings.
Apart from this the budget is a continuation of the 2022 budget, where it concerns SMEs.
Disappointingly, the Budget fails to effectively tackle other major challenges which are choking businesses. Very serious issues have merely been given a mentioned in this Budget speech, which falls too short from the action that Malta should be taking at the moment, as a stage of implementation.
The serious employment crisis, suffocating bureaucracy and impossible traffic, merited more than simply being mentioned in this budget. These issues are seriously affecting productivity and we cannot afford to start thinking of policies now, with no solution, nowhere on the horizon.
Malta Employers Association
A Budget that is focused on Short-term Stability
On a macro scale, the main feature of the budget is government’s decision to shoulder increase in fuel, energy and cereal prices on businesses and consumers to maintain economic stability and price competitiveness, the MEA said. This is fundamental in a global scenario where many countries are experiencing rates of inflation which have been unheard of for more than 40 years.
The budget has adopted targeted approach, ensuring discipline in government expenditure whilst taking active measures to support family income without undue burdens on businesses. This appears to have taken precedence over capital expenditure.
Government is fine tuning numerous social benefits to spread a feelgood feeling among a large cross section of the population. It has announced numerous business incentives for better regulation and technical support to adopt ESG criteria in business, and also digitalisation and internationalisation.
In the current situation, government does not have much room for fiscal manoeuvrability, and for the fiscal targets to be attained, it becomes even more imperative that government exercises discipline in its spending, and to curtail unnecessary expenditure such as unproductive employment in the public sector and extravagant activities of dubious national benefit.
The MEA agrees with the Minister’s announced objective to have a viable national airline. The Association added that for such an objective to be realised, the airline must be run on a commercial basis, free from politically motivated interference.
All in all, while the budget speech addressed the immediate issues, which might be understandable in an uncertain global situation, the MEA notes that this has to has to accompanied with a longer term economic direction. This includes a clear human resources strategy which should follow the exercise of the census of skills, together with a plan for economic transformation to maximise the country’s economic potential whilst safeguarding the people’s quality of life.
MHRA
The Malta Hotels and Restaurants Association called the Budget welcomed the energy subsidy as a crucial initiative to fight the current economic challenges. “The government’s €600 million investment in energy represents approximately 10% of Malta’s budget and this must be the most important budgetary measure towards ensuring the continued sustainability of the tourism industry,” Tony Zahra said.
“Air connectivity remains the key to a successful economy especially the tourism sector where 99% of tourists arrive by air. In this respect Air Malta remains the most important channel for the industry and MHRA reiterates that the national airline must continue flying without any interruptions whatsoever,” the tourism lobby added. (Maltatoday)
General Workers Union
The GWU described the budget as a “socially fair and responsible one that built on the past budgets’ social frameworks. “The GWU is satisfied that this is another budget with a social soul. While our neighbouring countries are struggling with an economic crisis, the budget guarantees economic growth, and reassuringly a social soul, supporting the most vulnerable in our society.” (Maltatoday)
UHM Voice of the Workers
The UĦM – Voice of the Workers welcomed proposals on COLA for civil servants and public entity workers, but warned that with slower growth, the Budget lacked long-term vision. “At present the country needs investment in human resources. The Budget does not mention how to increase productivity to move from a quantity-economy to one based on quality and value-added.
MUT
The Malta Union of Teachers welcomed reference to the new sectoral agreement for educators. The new sectoral agreement that will start to be negotiated with the union as from next January.
The MUT said that with this electoral promise it has now become part of the Government’s programme to substantial improve in salaries and working conditions for educators. “The MUT looks forward for these negotiations can be started.” With reference to laptops for each student in secondary school, this measure requires discussion, noted the union, both from a logistical point of view and also regarding the pedagogical use of these resources. (The Malta Independent)
MUMN
The Nurses Union said that the Budget was very disappointing for the health sector. “Patients at Mater Dei Hospital will still be placed in corridors, in the medical library and in the staff canteen since this budget failed to provide the necessary investment for such inhumane areas to be closed down,” the MUMN said.
It said it would have expected the government to embark on the building of new wards at Mater Dei so that such areas could be closed down permanently. “Our patients deserve proper wards when admitted to MDH and not be placed in corridors or make-shift areas with mobile toilets. Currently there are four corridors used as “wards” in MDH besides the staff canteen and the medical library. That is six areas in all, areas which are “wards” having no toilets, no showers and where it is very difficult to deliver the proper care and maintain the dignity of the patient.”
