Malta PM: Coronavirus lockdown not yet necessary, announces economic measures for business

Prime Minister Robert Abela has announced a package of economic measure for businesses impacted by the COVID-19 to assist employers and the self-employed with cash flow problems.

They include postponement of provisional tax, VAT, social security contributions (national insurance) for both self-employed and employers, for March and April. Companies who invested in teleworking schemes will also be granted refunds on their investments.

Government will also accelerate VAT refund payments to businesses.

“These are strong measures that will have a positive impact on businesses to safeguard jobs. They’re not easy measures, but our economy is resilient, and our finances are stable. This government has always been prepared for this rainy day. It is indeed with us,” Abela said.

Abela said the government had spoken to stakeholders, the Chamber of Commerce, SMEs, Malta Hotels and Restaurants Association and other associations. The economic package is mainly geared to businesses in tourism and hospitality, recreational services, transparent, and some industries in manufacturing.

Abela said his experts’ advice so far is not to go for total lockdown.

“They have given us simple reasons: this would be a house arrest except for the acquisition of food and medicinals… for weeks on end. It could be a populist measure, but also a dangerous one. We have taken drastic measures, for example, 14 days’ quarantine for all travellers, so as not to arrive to this most extreme measure. It would be a most inconvenient measure. Indeed it has been said that it would be ill-advised for us. We are discussing with our public health experts. If that measure will be needed, we will do it. But the numbers right [Covid-19 infections] now show that we are moving in the right direction.”

He said no lockdown would prevent having zero cases of infections. “We will have a number of infections, it is inevitable. What we are trying to avoid is a massive spike in these cases, so that the health authorities are not over-burdened at one go….

“We will be making the best of efforts to supervise mandatory quarantine. This is not the time to take things lightly. Those who are subject to quarantine must take this seriously. Even those who are not obliged because they were abroad a few days before the new rules set in, they should still do a 14-day quarantine period. This is my appeal.”

“The minute the public health superintendence tells us ‘we need a lockdown’, that is what we will do.”

Abela once again appealed for calm. “The situation is under control. I appeal for calm, and courage from our businesses. We have health authorities who know what they are doing. They make this country proud with their preparedness.”

Finance minister Edward Scicluna said Malta’s economic growth will be impacted upon by the coronavirus shock. He said it was still too early to say whether this could lead to a recession. “Malta starts from such strong growth, with its surplus, that any impact from coronavirus is buttressed by this cushion.”

He said Malta will be introducing a mini-budget to take stock of the coronavirus impact.

Scicluna said he met the Malta Bankers Association, who said they had “promised” to do everything they can to assist businesses on cash-flow problems for the next months. Scicluna said he will keep monitoring the situation, to see whether another package of measures will be required.

In a statement after the conference, the Medical Association of Malta said that it noted that the Prime Minister confirmed that a lockdown would be necessary in the future when there is documented sustained local transmission.

"The statement that a lockdown suffering will be much bigger than that caused by coronavirus seems to be in direct contradiction to his declared intention to introduce it at more troubled times. Undoubtedly it will be a necessary sacrifice," MAM said.

The association said that since this is a novel virus without a textbook solution, it would be wise to learn "from other countries' mistakes."

"The problem with waiting for documentation of local person to person transmission is that there is a significant time lag between infection with the virus and clinical illness. This means that a lockdown would then come into effect only after there is uncontrollable spread, with potentially devastating consequences on human health. This is more probable in a small and densely populated country like ours," the association said.

It added that "half-measures" such as those in China, Italy and Spain were proven completely ineffective as all three government resorted to drastic measures when it was too late.

The Malta Chamber of Commerce welcomed the measures, but said it expected bolder decisions from the government to “indicate clearly when it is going to dig into the country’s reserves to make good for the hardships companies are currently facing and enduring through no fault of theirs.”

“All this must be put in the context of the government’s decision to declare quarantine leave as equivalent to ‘jury leave’ by means of a legal notice, and this without any consultation, which means it has to be paid by businesses. As The Malta Chamber has argued several times already, this decision is unacceptable and will have serious negative effects on our businesses and the economy at large.”

The Chamber complained that the method with which this decision has been taken left much to be desired, claiming “all competent and relevant institutions have all been bypassed. The government has in fact ridden roughshod on the MCESD, and the Employment Relations Board, against the express opinions of all constituted bodies, who were in complete unison on the subject.”

The Chamber insisted that quarantine leave needs to be paid by the government, “otherwise this will threaten the very survival of businesses.

“Government’s proposals to date are considered not to reassure the local economy in terms of any potential plans for a lockdown in the country to protect the health and welfare of our population.

“Unless there is complete and inclusive dialogue and planning in the appropriate fora and according to agreed procedures, the Chamber fears that the consequences of a lockdown, as much as this may be sensical from a national health viewpoint, will have catastrophic economic effects on businesses and jobs.”

12:25 Does Edward Scicluna expect a deficit this year? Doesn’t seem like it… Matthew Vella

12:23 Abela has also appealed for calm on issues of food stocks or banking. Matthew Vella

12:23 “The minute the public health superintendence tells us ‘we need a lockdown’, that is what we will do.” Matthew Vella

12:21 Ok, more questions on lockdown. Robert Abela insists health advice is that no lockdown is required in Malta as of now. He does not rule out a lockdown when it becomes necessary. Matthew Vella

12:12 “We will be making the best of efforts to supervise mandatory quarantine. This is not the time to take things lightly. Those who are subject to quarantine must take this seriously. Even those who are not obliged because they were abroad a few days before the new rules set in, they should still do a 14-day quarantine period. This is my appeal.” Matthew Vella

12:09 “I am not being indifferent. Indeed we have taken measures to cushion the economic impact.” Matthew Vella

12:08 “We will have a number of infections, it is inevitable. What we are trying to avoid is a massive spike in these cases, so that the health authorities are not over-burdened at one go.” Matthew Vella

12:07 “If the target is to have zero cases in Malta, it is impossible even if we had to go for lockdown and lock out the island’s access from other countries.” Matthew Vella

12:04 “They have given us simple reasons: this would be a house arrest except for the acquisition of food and medicinals… for weeks on end. It could be a populist measure, but also a dangerous one. We have taken drastic measures, for example, 14 days’ quarantine for all travellers, so as not to arrive to this most extreme measure. It would be a most inconvenient measure. Indeed it has been said that it would be ill-advised for us. We are discussing with our public health experts. If that measure will be needed, we will do it. But the numbers right [Covid-19 infections] now show that we are moving in the right direction.” Matthew Vella

12:02 Abela says his experts’ advice so far is not to go for total lockdown. Matthew Vella

12:01 Economy minister Silvio Schembri says that he will be working to keep Malta’s economic growth at the strongest of rates in Europe. Matthew Vella

12:00 Ok... some measures now being mentioned by economy minister Silvio Schembri, a bit more detail in terms of financing. We will be going deeper on this in the final write-up of the story here. Matthew Vella

11:51 Scicluna said he will keep monitoring the situation, to see whether another package of measures will be required. Matthew Vella

11:49 Scicluna said he met the Malta Bankers Association, who said they had “promised” to do everything they can to assist businesses on cash-flow problems for the next months. Matthew Vella

11:48 He said Malta will be introducing a mini-budget to take stock of the coronavirus impact. Matthew Vella

11:48 “Malta starts from such strong growth, with its surplus, that any impact from coronavirus is buttressed by this cushion.” Matthew Vella

11:47 Finance minister Edward Scicluna says Malta’s economic growth will be impacted upon by the coronavirus shock. He said it was still too early to say whether this could lead to a recession. Matthew Vella

11:46 Abela once again appealed for calm. “The situation is under control. I appeal for calm, and courage from our businesses. We have health authorities who know what they are doing. They make this country proud with their preparedness.” Matthew Vella

11:44 “These are strong measures that will have a positive impact on businesses to safeguard jobs. They’re not easy measures, but our economy is resilient, and our finances are stable. This government has always been prepared for this rainy day. It is indeed with us.” Matthew Vella

11:43 Government will also accelerated VAT refund payments to businesses. Matthew Vella

11:42 They include postponement of provisional tax, VAT, social security contributions (national insurance) for both self-employed and employers, for March and April. Companies who invested in teleworking schemes will also be granted refunds on their investments. Matthew Vella

11:41 The economic package is mainly geared to businesses in tourism and hospitality, recreational services, transparent, and some industries in manufacturing. Matthew Vella

11:41 Abela says Malta government has spoken to stakeholders, Chamber of Commerce, SMEs, Malta Hotels and Restaurants Association and other associations. He is announcing an economic package to ensure these businesses’ liquidity and cash flow situation, in a bid to save jobs. Matthew Vella

11:40 “Health is important, but so are jobs are important, because people need money.” Matthew Vella

11:39 Ok, so this looks like a press conference on economic measures. Matthew Vella

11:30 We will be live-blogging this press conference Matthew Vella