Malta Enterprise forked out lion’s share of COVID-19 cash

Malta Enterprise was government’s biggest spender throughout the COVID-19 pandemic, financing 51% of total aid announced by government.

The National Audit Office will be reviewing the COVID-19 mitigating measures adopted by government since the start of the pandemic in 2020, exploring the volume of cash dedicated to these measures.

Malta Enterprise enjoyed the highest allocation, largely due to the €400 million wage supplement scheme. Another €400 million was set aside for investment in industrial infrastructure, including the Life Sciences Park, Kordin Business Incubation Centre, the former landfill at Marsa and other projects by Malta Industrial Parks.

This investment will see industrial zones expand vertically to create added space, at a total cost of some €470 million.

At the time of their announcement, the estimated costs for the industrial investments and wage supplement schemes accounted for nearly half – 45.4% – of the total COVID-19 budget.

After Malta Enterprise, the Malta Development Bank (MDB) was the second biggest spender with a dedicated budget of €350 million. Up until September 2020 – the cut-off date for the NAO’s preliminary review – MDB spent €74.5 million of this.

Following MDB, the Office of the Commissioner for Revenue was responsible for the thid largest financial package at €255 million. Of this budget, over half was already spent by September last year.

On a wider level, Malta spent at least 33% of its estimated COVID-19 budgets. Of the amount spent by September 2020, five measures accounted for over 90% of the cash spent. The wage supplement took up the bulk government finances, followed by several tax deferral schemes set up by the Commissioner for Revenue.

This was then followed by the bank guarantees schemes and added assistance to the medical sector.

At €34.4 million, the voucher scheme was government’s fifth most expensive COVID support measure, up until September 2020.

This preliminary review by the NAO will be providing the initial foundations for the office to map out a wider audit programme relating to these fiscal measures.

Timeline of fiscal measures

A rescue package worth €1.8 billion was announced in March 2020, a couple of weeks into the outbreak locally: €1.6 billion of this package dedicated for added liquidity in companies, of which €700 million in tax deferrals and €900 million in guarantees.

Health authorities were allocated an additional €35 million budget to combat the pandemic, while government promised to pay companies €350 per employee on quarantine leave apart from parent, unemployment, medical and disability benefits.

Government forked out further money in the form of a new and improved wage supplement scheme: the improved package saw government finance a full five-day work week at a minimum of €800 per month for all workers and self-employed in critical sectors that were decimated by the coronavirus measures. Employers would guarantee a minimum top-up of €400 per month per employee to ensure that employees receive a minimum of €1,200 per month.

A second tranche for companies and sectors hit by reduced consumption, saw the government finance one day per week in wages, based on a monthly pay of €800.

All this was eventually followed up by a €753.4 million Economic Recovery Plan, launched on 8 June, which saw the introduction of 24 new measures. Among those measures introduced was the well-received voucher scheme, rent subsidy, and reduction in the tax on property transfers.