Budget 2016 had dozens of measures which have been warmly welcomed by the sectors that they will help – but it is impossible to please all the people all the time.

Take the Malta Chamber of Commerce, Enterprise and Industry, which was thrilled with measures aimed at SMEs.

These include the promise to address the country’s ease of doing business rankings; updating bankruptcy legislation; streamlining tendering procedures reducing the performance guarantees from 10 per cent to four per cent; and the re-establishment of an export credit guarantee scheme.

The chamber was also pleased by newly-announced programmes for business to be administered by Malta Enterprise and furthering of public-private partnerships, as well as the setting up of Malta Marittima, Education Malta and Property Malta, all of which it felt were conducive towards increasing international business for Maltese companies in sector-specific areas.

However, president Anton Borg was still upset that the government had shot down the chamber’s call for lower energy prices for all businesses.

“While being fully aware of Enemalta’s financial situation, the chamber felt the need to advocate further reductions to protect Malta’s export competitiveness position, particularly in price-sensitive sectors such as manufacturing, given that electricity typically represents around four per cent of turnover or 12 per cent of overhead costs in a manufacturing company.

“In view of this, energy cost is among the primary considerations foreign direct investors take into account when choosing a location to set up their business,” he said.

The chamber was also disappointed that the government failed to invest in research technology development and innovation.

“The chamber’s proposals were aimed at making available the necessary RTDI infrastructure to provide Maltese business with a better chance of building and retaining a more resilient and competitive position. From the chamber’s point of view, Malta has missed a valuable opportunity to re-invest part of its proceeds from prosperity in safeguarding a competitive future,” he said.

The property sector saw a number of measures, particularly when it comes to getting vacant properties back on the market. Kevin Buttigieg, the CEO and managing director for Re/Max, was pleased that their suggestions, made alongside those of the Malta Developers’ Association, had been taken on board.

“Even though there are a number of properties caught up in inheritance disputes, the reasons also extend to price disagreement among parties inheriting the pro-perty as well as the number of people inheriting the said property.

Energy cost is among the primary considerations foreign direct investors take into account when choosing a location to set up their business

“Sometimes the value is so low that the heirs are not interested to sell. Re/Max believes that with the new incentives put in place people will be more inclined to sell. Selling quickly will not only give them savings but will also help to resolve issues related to selling price that seems to be a common factor within inheritance cases.

“Finally, we feel that this change in regulation will affect everyone (both locals and foreigners) since it will help cities like Valletta regain their original charm. Abandoned properties will either be restored or sold, which will result in cleaning up streets giving them the beautiful features they once had,” he said.

Even taxes, such as the 50c environmental contribution, were greeted. Malcolm Grima, the sales and marketing manager at the Pergola Hotel, believes that it has come at an opportune moment.

“The influx of tourists to the islands is peaking now, due not only to marketing and accessibility but also to a number of problematic factors affecting Malta’s competitor destinations. In this context, I do not believe that 50c per person per night could leave a negative impact on tourism.

“City/tourist taxes are common around Europe, and avid travellers would already have had experience of this. There could undoubtedly be niggling negatives, but if the moneys collected are well administered and cautiously invested, I believe the positives would far outweigh the negatives,” he said.

The €6 million generated is going to be administered through a set-up that will include the Malta Hotels and Restaurants Association. When it came to where this money should be spent, Mr Grima clearly had a bias for the hotel’s vicinity.

“Moneys should be used to embellish touristic areas and exceed tourists’ expectations. There are top touristic areas in dire need of attention or are crying out loud for improvement. An example is the front at the island’s largest sandy beach, Mellieħa Bay,” he said.

The Budget also included updates on measures from the previous Budget, and the Finance Minister announced that third-pillar pension products were imminent.

Stuart Fairbairn, the chief officer for business development at MSV Life, confirmed that the company had applied for official recognition of its products and that once these were approved MSV Life would be in a position to launch them on the local market.

“This means that clients can apply for the tax credits on the savings they make into their personal pension plans.

“Everything is now in place to enable individuals to receive a tax credit on the savings they make for their retirement. This is great news and really helps people to save for their future in a tax-efficient environment. We see this as the first important step of a journey and hope that in the future the tax incentives will increase,” he explained.

“The tax credit available for 2015 is set at 15 per cent, up to a maximum contribution of €2,000, which means you can receive up to €300 from the Inland Revenue next year. Furthermore, it is possible to make savings for your spouse, so a total saving of €4,000 could be made with tax credits of €600 available.

“There are no other savings schemes available where the government gives you such a financial incentive,” he said.

If the moneys collected are well administered, I believe the positives would far outweigh the negatives

“The contributions must be made to an approved pension and left until at least age 50. When you start to take your pension you are allowed to take up to 30 per cent of the plan as a tax-free lump sum. The balance is then used to provide you with an income to supplement your state pension. The income can be guaranteed for life – through an annuity – or you can elect to keep the money invested and withdraw your income from the investments.”

In some cases, the Budget did not introduce new measures, but rather repeated successful ones. A spokesman for the Association of Car Importers Malta gave as an example the scrappage scheme, saying that each one had a positive effect on new car sales.

“The Maltese car stock is one of the oldest in the EU and there are therefore a lot of customers that can benefit from the scheme. Moreover, the scheme contributes positively towards the environment by removing very old cars and replacing them with new ones with very low carbon dioxide and nitrous oxides, helping slow down climate change and improving our health,” he said.

The association was disappointed by the take-up of electric cars over the years and is hoping that fiscal incentives in Budget 2016 could encourage greener modes of transportation. But it said this might not be enough on its own.

“Educational campaigns are undeniably important in order to create more awareness of the additional benefits using low-emission vehicles brings, especially for our health and that of our children. This is crucial and most necessary.

“All new cars being imported into Malta are now Euro 6-compliant, which are much leaner on fuel and produce far less emissions. Older vehicles have much higher emissions and have lost most of their efficiencies. This fact has also been recognised in the Budget when announcing the compulsory VRT testing of vehicles with 160,000km or more on the clock. Other countries have had several campaigns for users to dispose of their worn-out used vehicles for several years now.”

The Budget also has indirect effects that need to be well managed, Robert Delia, heads of recruitment agency Vacancy Centre, explained.

“The growing Maltese economy has resulted in increased capital investment and requirement for human capital, resulting in greater labour mobility. Such mobility is creating further gaps in the labour market that will need to be filled in the very near future, particularly at a skilled level and at an operational or semi-professional level.

“And the evolving economy has generated different labour requirements, particularly within the financial services industry, ‘people development’ and IT/gaming. A typical labour shortage is that of skilled front-end developers,” he said.

He warned that it was important to develop the Maltese human capital, as gaps that already exist are being filled by non-Maltese.

“Organisations hire talent, not ‘nationality’, and capital growth does not distinguish between nationalities but only between capabilities. We should be doing much more to develop the necessary talent that will fuel the economy’s requirements.

“If the necessary capabilities exist or can be developed by third country nationals, then yes, we should be putting this labour resource to much better use. Only by having the necessary talent will the Maltese economy be able to sustain its growth in coming years,” he said.