Government should incentivise businesses not encourage unemployment benefits, shadow economy minister says

Shadow economy minister Claudio Grech said that €800 per every employee who loses his job should not be encouraged in government coronavirus care packages and instead invested in businesses to keep their employees.

"There is no logic in allowing employees to go through the hardship of becoming redundant so that the government would be paying unemployment benefits equivalent to €800 when it could give in the same amount in the first place to the employer to keep the employee in his or her job. It is wiser to do this and enable the employer to top up the €800 with a further supplement to allow a better income for the employee," Grech said.

He added that though such measures could cost the government a significant amount of money, it was more viable to help keep businesses afloat in the long run.

Speaking on TVM's Xtra, Grech said that the €800 should not just be guaranteed to Annex A businesses but all industries and businesses which were struggling as a result of the pandemic and they should be invested in each company.

"Over 100,000 employees are at risk of losing their jobs... we should start thinking of the aftermath of this pandemic now, rather than just the present: how will we deal with the economic fallout?"

Speaking on the health assurances of many employees, Grech said that it was futile to have a health measure not allowing groups of more than three people congregating in public while most people were still reporting to work in an office environment for fear of losing their jobs.

"We need to collect all our efforts on a national scale to map the most effective measures at this time. It's more important now to help businesses financially to keep their employees," he said.

Economy Minister Silvio Schembri  said that the government was prepared for the long haul, that economic packages and enhancements to current programmes are already designed so that they can kickstart after some time. 

"The economic package the government announced helps all businesses that are struggling. In the future and as time passes, more enhancements will kickstart," he said.

Economist Gordon Cordina said that the world was experiencing an economic crisis every ten years or so, but that due to the coronavirus, this crisis was manifesting itself differently because employees could not report to work and tourists could not travel.

"In Malta, this can hit us worse, because we depend on tourism. 25% of our money is directly from tourism, not to mention the many industries that sell to the tourist demographic.

"Future generations will probably have to pay for the debt that Malta incurs at this time. In Malta, the government debt is currently at around 45% of what it produces in a year, so there is plenty of room for manouvering," Cordina said.