Updated 0820 – Other reactions
Online portal timesofmalta.com reports other reactions from various trade lobbies on the island.
The Malta Developers’ Association welcomed the fact that its proposals had been accepted in full. In the words of its President, Sandro Chetcuti, the MDA said: “We are very satisfied that our proposals have been taken up as this will mean that the property and construction sector can continue to help our economic recovery. Our country will be passing through difficult times and with the right incentives we believe that the property market can contribute significantly to kickstart our economy again,”
The UĦM criticised government for considering businesses but sidelined workers and their families. With the economy being boosted, it expected workers’ take-home pay to be restored to normality. The union regretted that there was no special compensation for the Covid-9 frontliners. It welcomed the cash vouchers but said the reduction in power tariffs should have been extended to families, and the government’s incentives should also have included promotion of telework.
The Chamber of SMEs (formerly GRTU) said the government programme would give a much needed helping hand to enterprises and get the economy going. It said its requests had been mostly met with the reduction of business costs and measures to boost domestic demand. Chamber president Paul Abela said that addressing rental costs, utility costs and costs on human resources was key for business survival and the chamber was pleased to note that the Covid Budget has addressed these. However the rental aid was still deemed as too low.
The Association of Catering Establishments (ACE) welcomed the government’s programme particularly the extension of wage subsidies, subsidies on rents, trade licences and utility expenses, and the provision of vouchers to be spent in leisure activities.
The Malta Hotels and Restaurants Association said the stimulus package was well thought out and a major boost for the tourism industry. MHRA President Tony Zahra said the plan demonstrated that the government had the right feel of the economic and social situation and this plan will effectively contribute to reigniting the tourism sector and the rest of the economy.
Updated 0751 – Opposition reaction
The Opposition expressed its satisfaction that a number of proposals it had long forwarded were finally taken on board. It expressed regret that only limited reductions in tariffs were implemented, which will apply solely for businesses and just for three months.
PN Leader Adrian Delia noted that the post Covid-19 economic programme lacked direct assistance to ordinary families an to the over 11,000 unemployed persons. DElia noted that the government did not provide an indication of how and where the economy would recover and noted that while domestic demand was encouraged, there were no incentives to entice tourists to visit Malta once travel was restored.
He also noted that no support had been provided to firms which were not covered by the annexes drawn up by government. Delia described as an “insult” the fact that no gesture was provided to front-liners in the fight against the coronavirus.
Updated 2102 – MEA reacts
The incentives announced by government are a timely intervention given the extent of the COVID crisis. The MEA noted that indications are that government finances will suffer a deficit of 5.5% in 2020; many tourism related businesses are at a standstill and the figures will remain low during the summer months in spite of the opening of the airport. Many people and families are presently suffering from a drop in income.
In a statement, the MEA said that “it is understandable that in view of these developments, government is introducing measures to stimulate domestic demand combined with a spread of incentives to support businesses and encourage further investment to have a faster recovery once the COVID outbreak subsides.”
These focused measures address both businesses and consumers and focus mainly on the tourism related businesses. The measures will not restore the economy to pre-Covid levels of activity, nor are they expected to, if one is realistic. Yet they will certainly boost economic activity and sustain both businesses and consumers in the coming months. The period July to September is critical for the country, as many businesses will decide whether to scale down or to retain their operations.
The MEA has also expressed its criticism on some issues.
- The reduction of the wage supplement to €600 may result in an increase in redundancies
- Shifting companies from the benefits of Annex A to Annex B is premature at this stage, as many businesses are retaining their employees by digging into internal resources.
- The grants to the construction industry to invest in modern equipment should be extended also to other sectors who need similar incentives to be able to shift to more environmental friendly technology.
- The reduction in utility rates should be permanent, even if not at 50%, and extended to households.
Nonetheless, the MEA said that overall it is a positive package that addresses the concerns of various stakeholders. The effectiveness of this package will depend on the business response to these fiscal injections, and also on the need to strictly enforce public health measures to keep the numbers of infected persons to a minimum and thus prevent a relapse which will be damaging and costly. Government is urged to maintain contact with the social partners to exchange information so that the situation will be monitored continuously, and further measures that extend beyond September 2020 may be discussed to reflect the prevailing situation.
Malta Employers Association
The incentives announced by government are a timely intervention given the extent of the COVID crisis. The indications are that government finances will suffer a deficit of 5.5% in 2020; many tourism related businesses are at a standstill and the figures will remain low during the summer months in spite of the opening of the airport. Many people and families are presently suffering from a drop in income.
It is understandable that in view of these developments, government is introducing measures to stimulate domestic demand combined with a spread of incentives to support businesses and encourage further investment to have a faster recovery once the COVID outbreak subsides. These focused measures address both businesses and consumers and focus mainly on the tourism related businesses. The measures will not restore the economy to pre-Covid levels of activity, nor are they expected to, if one is realistic. Yet they will certainly boost economic activity and sustain both businesses and consumers in the coming months. The period July to September is critical for the country, as many businesses will decide whether to scale down or to retain their operations.
The MEA has also expressed its criticism on some issues
- The reduction of the wage supplement to €600 may result in an increase in redundancies • Shifting companies from the benefits of Annex A to Annex B is premature at this stage, as many businesses are retaining their employees by digging into internal resources.
- The grants to the construction industry to invest in modern equipment should be extended also to other sectors who need similar incentives to be able to shift to more environmental friendly technology.
- The reduction in utility rates should be permanent, even if not at 50%, and extended to households.
Nonetheless, overall it is a positive package that addresses the concerns of various stakeholders. The effectiveness of this package will depend on the business response to these fiscal injections, and also on the need to strictly enforce public health measures to keep the numbers of infected persons to a minimum and thus prevent a relapse which will be damaging and costly. Government is urged to maintain contact with the social partners to exchange information so that the situation will be monitored continuously, and further measures that extend beyond September 2020 may be discussed to reflect the prevailing situation.
Updated 2053 – Chamber of Commerce reacts
The Malta Chamber of Commerce welcomed the measures announced during tonight’s special budget which were based on the three principles outlined by The Malta Chamber in its document ‘Making a Success of the New Norm’. In a statement, The Chamber said that it is particularly satisfied that Government accepted and announced measures it
had itself proposed such as:
• the retention of the wage subsidy on a selective and tapered basis,
• support for business operating costs particularly in terms of rental expenses and fuel costs
• direct support to help businesses re-engineer their business plans to consider new
opportunities
The Malta Chamber also welcomes measures aimed at embracing the opportunities presented by the Covid-19 crisis such as the acceleration towards digitalization of business processes and a strong direction towards a low carbon economy.
The Chamber is also highly appreciative of the investment in industrial infrastructure of Eur400 million to attract new investment in both existing and emerging industries.
“As Malta’s foremost business representative body, we welcome the measures announced
tonight, as they widely reflect the sentiments of The Malta Chamber. Several of the incentives are expected to help businesses turn the COVID crisis into an opportunity of growth through a re-engineered economy” said Perit David Xuereb, President of the Malta Chamber.
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Prime Minister Robert Abela has this evening launched an economic regeneration plan estimated to reach €900 million in a bid to support the relaunch of Malta’s economy and protect employment.
The wage supplement, €800 grant which had been allocated for every employee at businesses whose activity came to a halt during the coronavirus pandemic will be extended until September for hotels, travel agencies, language schools, events organisers and air transport. Other sectors currently with a €800 supplement will be brought down to €600. Other sectors where the markets have now re-opened such as barbers or nail artists, will move from Annex A to Annex B.
For the summer months of July, August and September, government will be paying 50% of commercial utility bills, capped at €1,500 per applicant. This will place a cost of €30 million on the exchequer.
Businesses and consumer alike will be glad to know that fuel prices will decrease as from Monday. However, the decrease will considered short of expectations, as fuel tax will be going down by 7c. Petrol will be priced at €1.34 and diesel @€1.21. The decrease is being affected through a decrease in the fuel tax.
Businesses will be able to apply for a grant of up to 2,500 to cover rental expenses for July, August and September. This will cost Government up to 50 million euro.
Measures already announce for taxes and other contributions paid by businesses will be extended till the end of August.
Payment for licenses to the Trade Department and the MTA will be waived. This includes hawkers, tourist guides, restaurants and hotels. This will cost the exchequer €5 million.
Support for families
A cheque with tax refunds will be sent in the coming days to 210,000 employees. They will receive €11.5 million.
In a bid to encourage locals to spend money at local outlets, all persons over the age of 16 will be given €100 in five vouchers of €20. Taxation on buying or selling of property will be reduced even for those who have already signed a promise of sale.
Couples who had to postpone their wedding will be given a refund of €2,000 out of an allocated €2 million budget for this line item.
For property costing less than €400,000, stamp duty will be reduced from 5% to 1.5%. For the sellers 8% duty will be reduced to 5%, stamp duty will be reduced from 5% to 1.5%. For the sellers, the 8% duty will be reduced to 5%.
