What unions and employers said about Budget 2019

Chamber of Commerce – More competitiveness needed

The Chamber noted that the Budget for 2019 was set against a backdrop of an economy that is performing well. “All in all, the Chamber is pleased to note that several of its recommendations have, in fact, been included in the Budget Speech.”

The Chamber welcomed measures announced in the strengthening of national structures and administrative units responsible for border controls and market surveillance, pointing out that it had been advocating such enhancements for several years.

It noted that its calls for government not to introduce any surprise measures and new taxes were largely heeded.

“This is to the advantage of business momentum. The main new measure announced this year in this regard, relates to the introduction of a deposit and refund system on beverage containers. The Chamber looks forward to further consultations with the authorities.”

New measures called for by the Chamber aimed at enhancing the national action plan for entrepreneurship were also greeted, particularly those announced in the area of support for start-ups.

The Chamber was also pleased to note the setting up of new entities that will serve to promote Malta’s efforts in lucrative and innovative sectors such as fintech, blockchain, artificial intelligence and internet of things.

Another Budget measure resulting from one of its proposals with respect to active labour market measures was to enhance the availability of skills in the economy.

In this respect, it noted the matching of fiscal incentives for persons employed in the public sector as had been made available for private sector employees to postpone their retirement.

The Chamber reiterated its position that discussions with the employer bodies remain ongoing with a view to ensure that the final effect of the additional days off measure is cost-neutral to employers.

In line with the investment of €700 million in the country’s road network over the coming seven-year span announced last year, the Chamber said it looks forward to contributing its recommendations on transport in an effort to solve the congestion problem that is costing the environment as well as businesses and citizens dearly.

GWU – Positive budget

The General Workers Union said the Budget reflected the government’s economic success, and toasted its outlook towards social justice. “These measures strengthen people’s standard of living especially the most vulnerable in society, but also the middle class. Various measures will leave more money in people’s pockets.”

The union said the increases in pensions, social benefits, increase in benefits for people with disability, the increase in children’s allowance, extension of free public transport, work benefit for disciplined forces, extension of first- and second-home schemes, were all a reflection of economic expansion.

It went on to note that the Budget was in line with requests by the GWU to ensure better help for citizens, especially in terms of housing, social housing, and the rental market.

“We are satisfied that the government kept its word on another public holiday leave day being returned to workers… this was a positive Budget.”

MUT – Budget ignores priorities

The Malta Union of Teachers said the Budget proposals announced yesterday were a continuation of the government’s current work programme in education, with the continuation of measures to strengthen the sector.

These include new opportunities in the secondary school system, a strengthening of language teaching, apprenticeships, and strengthening the link between secondary and post-secondary education.

The Budget also included a reference to pedagogical training for educators and the possibility of training for supply teaching grades to move up to regular grades, as well as free MATSEC exams in a continuation of last year’s measures.

However the MUT said the document made no reference to serious problems inside the educational sector, among them the lack of teachers. “The Budget does not include any investment for youths to choose the profession of teaching, and there is no reference to any aid for non-state schools to keep offering the best of services.

“This Budget does not address the problem of security in schools. It is disappointing for MUT because it looks like there is no attention given to these serious incidents which schools have experienced in recent years. The MUT hopes that the education ministry offers a better reply to these problems in its detailed financial estimates,” it added.

GRTU – Positive but lacks creativity

The GRTU said that while it was satisfied that various initiatives were rolled over from the previous year, there have been a “serious lack” of new ideas to incentivise SMEs.

The Chamber of Small and Medium-Size Enterprises said Budget 2019 would affect SMEs positively on four particular points: an increase in salaries and benefits, that would ultimately put more money in people’s pockets to spend; self-employed people will be granted the right to claim unemployment benefits; an increase in subsidy to small businesses to be able to invest in a third pillar pension; an extension of the scheme for the transfer of family businesses to save tax now down from 5% to 1.5%.

“With a strong economy and surplus, small businesses expected a substantial decrease in tax, a reduction in taxation to address the advantages reaped by foreign businesses; we expected the extension of the Microinvest for businesses to claim a refund on the investment they make; and initiative to address the serious problem of workers’ shortage.”

MHRA – Improved quality of life

The Malta Hotels and Restaurants Association welcomed news that Air Malta has successfully registered positive results in performance and its growth prospects are encouraging. “Specifically, MHRA notes the vision being set for Air Malta as the Airline for the Mediterranean. An overall expansionary strategy that incorporates development of new routes and new airlines. These growth prospects are supported by the substantial increase in MTA’s budget from €55 million to €72 million.”

The MHRA commended an intention to maximise the collection of the eco contribution which will further help improve the tourism product through embellishment initiatives.  Marsaxlokk, Birzebbugia, Xlendi, Gzira and Msida promenades also got a special mention for embellishment. MHRA feels that other important tourism zones like Bugibba and the Northern part of the island, must also be considered.

“The coast remains a very important component of the tourism product, and the announced beach development projects for both existing and proposed new beaches, will contribute to improving the tourism offer,” MHRA said.

The MHRA welcomed measures to improve safety and security of the islands, and called for stricter enforcement of regulations to secure a level playing field among the operators in the sector.

“We consider the various measures announced in the Budget 2019, to be favourable and will contribute positively to sustain further economic growth in the year to come. MHRA reiterates that growth prospects have to be supported by a long term, holistic and sustainable plan, based on quality and socio-economic benefits for the country.”

MEA – Longer-term vision required

The Malta Employers Association said the Budget reflected the rapid growth being experienced by the Maltese economy, with good measures aimed at vulnerable groups, most notably pensioners.

“It remains to be seen whether these measures will improve the purchasing power and quality of life of this growing segment. The Budget also seeks to spread a number of focused benefits that target low income families. Perhaps the Budget should have projected a more concrete vision for a sustainable economy over a number of years.”

The MEA cautioned the current pressure on wages due to a shortage of numerous skills in the labour force, together with the cost of additional optional leave days may result in a wage price spiral as companies will seek – where possible – to shift the added costs on consumers both business and final consumers.

“Thus, increased inflation - projected to increase to 1.9% in 2019 - caused by cost push factors carries the danger of eroding profitability and competitiveness, particularly in sectors which are price sensitive, such as export oriented manufacturing and tourism.”

The MEA has also warned against growth which is the result of a sudden increase in population, adding that this required a comprehensive strategy to cater for the socio-economic impact of such a phenomenon, including investment in the necessary physical and social infrastructure to make such growth sustainable.

“The domestic labour market can generate three thousand jobs per annum, but the demand for labour is in the region of eleven thousand, thus the deficit can only be addressed through the importation of labour. The one-day increase in optional leave will certainly have an impact on productivity and the Association still believes this was unnecessary, given that Malta already has among the highest number of days of optional leave and public holidays.”

UĦM – Addresses 'social pockets' but lacks vision

The UĦM contended that positive initiatives are beneficial to small pockets in society, but the budget lacks a long-term vision. The union was mostly pleased with raises in pensions, an inclusion of an extra day of leave in the calendar year, the removal of exam fees for SEC and MATSEC, cancer medicines passed out for free.

However, UĦM showed its displeasure at the fact that certain measures it proposed were not included by the government. They mentioned as an example the mechanism for the protection of workers' wages that is not in place; foreign workers were unfortunately being largely forgotten, they said. The union asked for work to be of higher quality and provides a pay that is dignifying and able to protect families.

UĦM opposed the Home Equity Release because it is through this system that a Maltese pensioner is forced to buy his own home to make up for the lack of funds from his or her pension. "We should be a generation of citizens that is able to pass on its property to the next generation," a spokesperson said.

The union said that a surplus was always welcome. "A surplus like this one, of €400 million," UĦM said, "is expected to reach all kinds of people and to reach many more." They said that more investment was expected, so that the government would be able to have a long-term vision for the economy.