The government unveiled its budget for 2021 on Monday night. Prime Minister Robert Abela described it as the "best ever". Opposition leader Bernard Grech said it was short-sighted. What did stakeholders make of it?
Workers
Malta’s largest union, the General Workers Union, said it was pleased with Budget 2021 and praised the government for combining “economic caution and fiscal discipline”.
The union was effusive about worker-centric measures such as the extension of the COVID wage supplement and increase of in-work benefits, which it said were part of its pre-budget proposals.
It also reserved a special thanks to the government for having set aside funds to compensate workers with grievances dating back decades.
“The country must be ready for the economic growth that is expected in the coming years, not just when the world finds a COVID-19 vaccine but also as a result of the economic stimulus the government has introduced over these past months,” the GWU said.
Trade union confederation FORUM said it understood that tackling the COVID-19 pandemic was at the top of the priority list and that it was pleased to see social initiatives such as providing an additional day of leave to workers, increasing pensions and boosting green economy initiatives included in the budget speech.
It was less happy about the government’s failure to include a measure allowing parents to use part of their sick leave allocation to care for their sick children. The measure was promised as part of Labour’s 2017 electoral manifesto, it noted.
Teachers
The Malta Union of Teachers acknowledged the unusual circumstances of this year’s budget and said it would be reserving comment until it took a closer look at budget estimates for the Education Ministry.
The MUT did have one key observation to make, however, saying that the government had to look beyond its short-term needs and make a concerted effort to solve the growing problem that Malta’s lack of teachers is creating. Young people need more incentives to encourage them to embark on a career in education, the MUT said.
Business lobbies
The Malta Chamber said the budget had failed to address the massive impact that COVID-19 is having on operating costs for businesses, and introduced no new measures to support businesses struggling on this front.
It said the budget speech reflected the government’s optimism that the economy would recover in the short term and said that optimism was not shared by businesses at large. Should the COVID-19 crisis deepen or extend beyond the next six months, further support beyond that included in this budget would not be forthcoming, it said.
The Malta Chamber welcomed a number of measures, including the extension of the wage supplement scheme linked to the loss in turnover of operators.
The Malta Chamber of SMEs, formerly the GRTU, welcomed the extension of the most important COVID-19 support measures particularly the wage supplement and the new round of vouchers.
It also noted incentives to help businesses to re-engineer their business models and invest in digital tools as well as the widening of the bracket for tax exempt businesses from €20,000 to €30,000.
The Gozo Business Chamber positively noted the economic stimulus provided through the Budget, especially through measures intended to enhance consumption in targeted economic areas.
These included the € 100 vouchers for persons over 16 years old and the extension of existing schemes on property purchases and sales.
It also noted the measures targeted towards business continuity principally the extension of the reduced stamp duty to 1.5% on the transfer of family businesses, the increased VAT threshold exemption for small operators, from €20,000 to €30,000, the extension of the COVID-Wage supplement till March 2021, and the continuation of the schemes currently implemented by the Gozo Ministry for Gozo in various economic sectors.
It noted government’s commitment in terms of transport and connectivity and the emphasis on digitalisation, and the green economy, two economic pillars the chamber said it had proposed in its budgetary document.
However, it called for the formulation of specific initiatives for Gozo. Gozo, it said, merited special attention especially when it came to digitalisation.
The chamber noted that given Gozo’s double insularity, there was positive discrimination to attract investment to the island. This would ensure diversification from an economy presently over-dependent on the tourism sector, it said.
Construction lobby
The Malta Developers Association described the budget as a “step forward” and said many of their proposals were taken on board by the government.
They said initiatives to encourage property purchases are especially welcome and said that initiatives to encourage developers to invest in more efficient machinery are also in line with the MDA’s vision for the country.
MDA president Sandro Chetcuti said that sectors represented by the association now had “the right tools in place to post important economic results to the benefit of all the community at large.”
Tourism sector
The Malta Hotels and Restaurants Association positively noted that no new taxes have been introduced and allowed for enough space and ability to craft further action as may be necessary at the most appropriate time.
MHRA said it values the government’s strong focus on social initiatives in this budget as this will inspire a feel-good factor across all society, in difficult times for all.
"MHRA strongly believes that the tourism industry is resilient and will return to be a major pillar of the economy once the pandemic subsides."
The Gozo Tourism Association noted the re-issue of a tweaked vouchers scheme, intended to generate turnover in the tourism establishments and retail outlets, the extension of the wage supplement and the contemplation of an updated tourism strategy. It also noted the proposed upgrading of the Gozo product.
However, it observed that no direct fiscal measures were introduced towards the Gozitan tourism industry.
It welcomed the adoption of a proposal it had put forward for the updating and renewal of the existing Diving Master Plan for Gozo. It also noted the announced sea link measures, whereby the fourth ferry operated by Gozo Channel will now be on a permanent basis and the introduction of the fast ferry service.
Employers
The Malta Employers Association said that overall, the budget focused on the immediate concerns due to the COVID-19 pandemic through a set of carefully designed and targeted measures, but it needs to be supplemented with a longer-term vision for the country through identifying new economic sectors that offer economic potential.
Entertainment, arts industry
The Malta Entertainment Industry and Arts Association welcomed the overall generic measures but said it was extremely concerned at the lack of measures specific to the arts and entertainment sectors.
“Whereas the budget is rich on social measures, it does not consider the arts and entertainment sectors as drivers of economic development in a time of recovery. It also does not address ways in which the sector can recover in the coming three years and recoup the major losses incurred.”
It said the extension of the wage supplement scheme will remain an important immediate measure for members and welcomed measures for a plan to attract the digital and innovative economy such as virtual and augmented reality which underpinned new areas of development for the arts and entertainment.
As for the reintroduction of the vouchers scheme, MEIA stressed that most of its sectors remain shut down with very limited content to provide to audiences.
It expressed disappointment that the only sector specific measure was a €1 million cultural assistance fund to address the multiple challenges resulting from COVID-19.
Young people
The National Youth Council said it was pleased to see further investment in campaigns on mental health, sexual health and plans to continue the discussion on the use of cannabis.
It was however disappointed that a concession allowing people born before 1962 to include work they did as 16- and 17-year-olds to count towards their National Insurance contributions was not extended to current-day youths.
The council welcomed environmental initiatives, though it noted these had to been seen in the light of a government deal to hand Miżieb and Aħrax woodlands to hunters.
The council also raised a question about the extension of the COVID wage supplement, asking whether students who received a stipend would also receive the supplement.