First reactions to Budget 2023: unions and employers with nuanced views

Malta Union of Teachers

The Malta Union of Teachers (MUT) has welcomed the reference made by Finance Minister Clyde Caruana on a new sectoral agreement which will start being discussed in January.

It also reminded government on the electoral promise to improve teachers’ wages and work conditions. It also welcomed the COLA increase.

Malta Employers Association

“On a macro scale, the main feature of the budget is government’s decision to shoulder increase in fuel, energy and cereal prices on businesses and consumers to maintain economic stability and price competitiveness. This is fundamental in a global scenario where many countries are experiencing rates of inflation which have been unheard of for more than 40 years.”

The MEA said the targeted budget ensured discipline in government spending whilst taking active measures to support family income without undue burdens on businesses. “This appears to have taken precedence over capital expenditure.”

It said social benefits were being fine-tuned for the feelgood factor, but that numerous business incentives had been announced for better regulation and technical support to adopt ESG criteria, digitalisation and internationalisation.

“In the current situation, government does not have much room for fiscal manoeuvrability, and for the fiscal targets to be attained, it becomes even more imperative that government exercises discipline in its spending, and to curtail unnecessary expenditure such as unproductive employment in the public sector and extravagant activities of dubious national benefit.”

Chamber of Commerce

The Chamber of Commerce said the government was using all financial resources available to maintain stable energy prices and safeguard spending power of lower-income groups against the backdrop of persistent inflation. “This is essentially a policy of preservation of our economy – with all its strengths and weaknesses.”

“We would have liked to see more ambition with respect to sustainability beyond the continuation of existing schemes for the purchase of electric vehicles. We would also have liked to see more tangible support with respect to innovation and new economic niches that can guarantee sustainable economic growth.”

The Chamber said that in spite of all the investment in roads and free public transport, traffic congestion has not improved, therefore seeking to engage with stakeholders to limit circulation of certain service vehicles before 9am. “Similarly, it is encouraging to see The Malta Chamber’s proposal for the establishment of a Board for the assessment of quality and aesthetics features of new developments taken on board. These two relatively minor proposals are examples that can improve the quality of life of people.”

Chamber of SMEs

The Malta Chamber of SMEs welcomed the “safety net” against international hikes of energy prices, which it called “by far the biggest threat Malta is facing at the moment.”

It welcomed the Rent Subsidy Scheme to help Malta mitigate the impact of freight costs. “Positively noted is the work being done to tackle issues with banking services and the increased importance being given to aesthetics in the development of buildings. The Budget is a continuation of the 2022 budget, where it concerns SMEs.”

But it said the Budget fails to effectively tackle other major challenges which are choking businesses. “The serious employment crisis, suffocating bureaucracy and impossible traffic, merited more than simply being mentioned in this budget. These issues are seriously affecting productivity and we cannot afford to start thinking of policies now, with no solution, nowhere on the horizon.”

MHRA

The Malta Hotels and Restaurants Association called the Budget a war chest addressing current unprecedented global economic challenges. “The government’s €600 million investment in energy represents approximately 10% of Malta’s budget and this must be the most important budgetary measure towards ensuring the continued sustainability of the tourism industry,” Tony Zahra said.

It said countries which have not been as bold as Malta in subsidising energy costs were finding that a lot of SMEs are struggling to stay afloat. MHRA believes that this budgetary measure was necessary to ensure the continued good health of the tourism and hospitality sector.

“Air connectivity remains the key to a successful economy especially the tourism sector where 99% of tourists arrive by air. In this respect Air Malta remains the most important channel for the industry and MHRA reiterates that the national airline must continue flying without any interruptions whatsoever,” Zahra said.

ADPD

The Green Party called the additional COLA benefit “a misguided attempt to create an alternative mechanism to one that already exists”, which could otherwise be and that could be updated to reflect the needs of all those who have been feeling the pinch of the cost of living increase, including those who depend on social services.

Carmel Cacopardo said the need for the newly-created COLA additional mechanism confirmed that the current mechanism badly needed to be updated to reflect better today’s needs. “For the first time the Minister of Finance is confirming that more than 80,000 people are living in poverty. While the policy of handouts Father Christmas-style has been reinforced, these individuals are not being assisted to improve their situation so that they no longer need to depend on social benefits.”

Cacopardo said it had long been felt that the basket of products and services on which the minimum wage and COLA is worked out needed to be revised to reflect today’s needs.  “Government’s hard-headedness in its refusal to revise the current basket on which the minimum wage is calculated is keeping people dependent on low wages and on government handouts.”

General Workers Union

The GWU dubbed the Budget a socially fair and responsible one that built on the past budgets’ social frameworks. “The GWU is satisfied that this is another budget with a social soul. While our neighbouring countries are struggling with an economic crisis, the budget guarantees economic growth, and reassuringly a social soul, supporting the most vulnerable in our society.”

The most important measure for the GWU was the continued subsidisation of the price of energy, fuel and cereals – €608 million – without introducing new taxes, as well as guaranteeing the fiscal sustainability of our country. It also welcomed the increases for pensioners, the second additional COLA mechanism, the increase in Childrens’ Allowance, Carers’ Grant, 1st time buyers grant, the increase in stipends and tax refunds among others

The GWU also praised headline figures for the economy. “Over the past months and years the government has guaranteed stability among families, workers and enterprises.This budget will see a recovery in the economy, turning current challenges into opportunities for Maltese enterprises and foreign investment to continue to grow.”

UĦM

The UĦM – Voice of the Workers weclomed proposals on COLA for civil servants and public entity workers, but warned that with slower growth, the Budget lacked long-term vision. “At present the country needs investment in human resources. The Budget does not mention how to increase productivity to move from a quantity-economy to one based on quality and value-added.”

UĦM said there were no concrete proposals on the environment, and how to address traffic problems, increase energy efficiency, and increase public and recreational spaces for families.

UĦM said many of its proposals were ignored, chiefly the non-payment of stamp duty, double payment on Sundays for all and work-family balance measures for parents to have the right to reduced hours.

Malta Union of Midwives and Nurses

MUMN said that the Budget failed to address major areas of concern in the health sector. It said that it expected government to build new wards, refurbish Mount Carmel Hospital, and address the nursing shortage. "MUMN has no other option but to label such a budget as disappointing, since it fails drastically to address the needs of the patients and shows that government has no intention on giving the health sector the priority it deserves."