Wage supplement for hardest-hit businesses to be extended till end of year

Government has announced the extension of the wage supplement until the end of the year, arguing that such a move was required to ensure a strong economic recovery and safeguarding employment.

During a press conference this morning, Finance Minister Clyde Caruana said that Government has spent 360 million euro on the wage supplement, equivalent to 3% of GDP. He recalled that the country’s economy saw a 5.7% drop in GDP in nominal terms in 2020, meaning that had government not intervened, the economic collapse would have been far greater.

“Wage supplement safeguarded the country against a wider contraction, which was reduced by around 33%, while avoiding the risks of further layoffs. We will continue to spend whatever necessary and provide all the assistance to ensure the economy remains strong so as soon at the country returns to normality, it will be strong enough to withstand the process”, Caruana said.

Caruana also recalled a recent statement by Christine Lagarde, ECB Governor who warned against an early withdrawal of supportive measures.

The extension is expected to cost Government coffers some 220 million euro. The system will remain based on the concept of loss of turnover, with Government saying that it will be the hardest-hit businesses which will continue to benefit from such aid until the end of the year.

On moratoria, Clyde Caruana said that the MDB, CBM and individual banks to extend this scheme further.

Enterprise Minister Miriam Dalli said that all those companies that are suffering the brunt of the pandemic will continue to receive assistance until the end of the year, while ensuring a gradual withdrawal from the scheme. However, in parallel, other incentives and schemes will be introduced, following consultation with stakeholders, to ensure that businesses are supported in regenerating their business model spurring economic growth.

She recalled that those businesses which were hit by new restrictions imposed this month will be receiving the full amount of the Wage Supplement, equivalent to 800 euro monthly. She added that businesses have already received some 70 euro million since the beginning of 2021. These include the wage supplement scheme, moratoria, support on rentals and reductions on electricity tariffs among others.

“Our aim is to help the Maltese economy in its transition to a more sustainable, green and prosperous one”, Dalli concluded.