Business says 20-week maternity leave costs €20m to the economy

According to the MBB report, increasing the maternity leave from the current 14 weeks to 20 weeks would potentially cost the Maltese economy €7.5 million worth of value in a year, equivalent to 0.18 per cent of GDP.

Of this, the cost to private business would amount to €5.3 million worth of value added a year, equivalent to 0.14 per cent of private sector GDP. In addition, according to the MBB report, introducing two weeks of paternity leave would cost the economy €4.8 million in terms of value added a year, equivalent to 0.12 per cent of GDP.

Of this, the cost to private business would be €3.7 million in a year in term of value added, equivalent to 0.1 per cent of GDP. These costs were subject to issues of take-up of leave and substitutability of workers.

According to the MBB report, the costs to the Maltese economy would be “especially relevant given the predominance of small and micro-enterprises which will be hit especially hit in terms of the difficulties they face to substitute for absent workers who are on parental leave”.

The report also claims that if the extension of maternity leave “could even reduce the female unemployment rate which currently stands at 37.7 per cent compared to 58.6 per cent in the EU. On his part, Parliamentary Secretary Chris Said, when presented with the report, insisted that the government was not against “women forming their own families”.

In this respect, the government had introduced numerous incentives to encourage a higher female participation rate in the workforce. He explained how in the 2009 the government had extended its tax benefits for mothers rejoining the workforce. On the question of the EU parental leave directive, Said was non-committal on the government’s final decision on the matter.

Another sore question, Said added, was who was going to pay for the added maternity leave. There were countries who had a shorter maternity leave period which offered full benefits, while there were other countries, including the UK, which offered a whole year of maternity benefit but at a minimal rate, he concluded.

The report, which was compiled by University professor Gordon Cordina and Jana Farrugia, was presented to Parliamentary Secretary for Public Dialogue, was presented by an MBB delegation chaired by MBB President John Huber. The MBB is composed of the Malta Chamber of Commerce, Enterprise and Industry (MCCEI) and the Malta Hotels and Restaurants Association (MHRA).