How unions and interest groups reacted to Budget 2017

General Workers’ Union

The trade union was full of gushing praise for the Budget, in particular proposals to increase pensions and supplements for minimum wage earners, double rent subsidies, and introduce medical leave for cancer patients.

“This is a very positive budget and one that should help those must vulnerable in our society to have a better quality of life,” GWU secretary-general Josef Bugeja said.

Union Haddiema Maghqudin

The union hailed pension and in-work benefit increases, and plans to grant disabled people unable to work a disability pension equivalent to the minimum wage. However, it criticised the lack of measures aimed at the middle class as well as a lack of initiatives on cooperatives, as well as the increase in excise duty on construction material.

“While the government is giving incentives to first-time buyers, it is also punishing them with this duty on building materials necessary for completing their house,” UHM president Josef Vella said.

Malta Developers’ Association

The MDA welcomed the lowering of stamp duty on Gozitan property sales and on cross-generational transfers of family businesses, as well as the extension of the first-time buyers’ scheme, and tax rebates for landlords who rent out their properties on social housing prices for a minimum of seven years.

However, it warned that the new excise duty on construction material will ultimately be shouldered by homebuyers.

Malta Employers’ Association

The MEA critcised the government for failing to reduce electricity tariffs and for adjusting the Cost of Living Adjustment (COLA), raising it to €1.75 a week when it had originally been calculated at €1.16.

“The government should not have ignored the COLA mechanism, which had been agreed upon by all social partners,” MEA director general Joe Farrugia said.

Another major shortcoming of the budget, it said, was that the commercial energy rates were not revised downwards to make those rates in Malta on a par with those prevailing in many industrialised countries.

“Given the state of international oil prices, the cheap energy generated by the interconnector and the potential benefits of the new power station, this was a doable measure.”

It also noted that the budget did not adequately address the situation at Air Malta, nor did it offer tangible solutions to the traffic situation, with the exception of the incentives for company transport.

Chamber of Commerce

The Chamber welcomed the Budget, as one that spared major surprises and shocks on businesses. In particular, it hailed plans to set up a Malta Development Bank, to grant tax rebates on dividends for small shareholders of companies listed on the Malta Stock Exchange, and to give tax deductions for employers organising transport to their workers.

However, it said its key proposal – that energy tariffs for businesses should be reduced – was not taken on board.

GRTU

The small business Chamber welcomed incentives for employers to organise transport to their staff, plans to increase public car parks, and to construct a solar farm. It also welcomed the reduction in stamp duty for cross-generational transfers of family businesses, but said that it should not be limited for only a year.

It also said that electricity tariffs should have been cut further and that it will study the increase in excise duties on toiletries, non-alcoholic drinks, glass, iron and tilting.

“After years of being hindered by eco-contribution tax, these businesses are now being castigated with the introduction of excise duty,” it said.

Malta Hotels and Restaurants Association

The MHRA welcomed the tax credit scheme for renovations in hotels and restaurants, and plans to start works on the new Institute of Tourism Studies in Smart City. However, it said that more money should have been investment in the upkeep of core tourism areas like Bugibba and Qawra.

Flimkien ghal Ambjent Ahjar

The environmental NGO warned that the proposed widening of roads and construction of carparks will only increase traffic, decrying such projects as “putting the interests of developers before the national interest”. FAA also claimed that Budget measures to promote the purchase of property by foreigners, boost the purchase of property in Gozo, and spend €50 million on a social housing project will “almost certainly” continue the process of building on open spaces, rather than encourage the redevelopment of Malta’s over 42,000 vacant buildings. 

Malta Union of Teachers

The MUT warned that the Budget falls short on innovative initiatives and urgent decisions to attract new people to the teaching profession, which it said is facing an “imminent crisis”. It also failed to develop a new educational curriculum that caters for students with different abilities, or take up the union’s proposal for a permanent committee on education that would “exonerate education from partisan wrangles”. 

Malta Motorsports Federation

The MMF urged the government to develop the proposed motorsports track and education park, which it said will help Maltese racers improve their skills in a safer facility and generate new forms of tourism.

In the Budget, the government pledged to take a final decision on whether, and if so where, such a motorsports track will be built within the next year.

The MMF also welcomed the introduction of stricter penalties for drink-driving contraventions, and for people who smoke in vehicles carrying children.

Forum of Small and Medium Enterprises

The FSMEPN expressed disappointment due to the fact that the Budget fails to mention self-employed and small to medium sized enterprises. “These are crucial to Malta's economy and failing to address their needs is a disservice to the various businesses in Malta and Gozo,” the forum said.

The forum also lamented over the unaddressed traffic issue, which it said is having an adverse effect on various businesses that may be having less foot fall in view of the fact that people may be discouraged to go to the shops.

Turning to energy and fuel prices, which are amongst the highest in Europe and were not reduced in spite of the international price of oil being stable below $50 per barrel, the FSMEPN added that this is making Maltese entrepreneurs less competitive than competitors in other European countries. It also said that the increase in excise tax will be a blow for the import business as it will be affecting their cash flow.

However, the forum did welcome the reduced tax of 1.5% when parents transfer their businesses to their children. On the other hand, it questioned the reason behind this measure only being valid for 12 months.