There is no doubt that the unfolding COVID-19 situation in Malta and the rest of the world is causing a huge health concern and several non-health related challenges.
Given our combined health concern, in an ideal scenario, Malta would experience the least possible COVID-19 cases, so our health services and infrastructure return to normality sooner rather than later. Given that the outbreak is now considered a pandemic, given how the linear trend has transformed to an exponential curve in neighbouring countries, the probability is that COVID-19 will have similar behaviour in Malta. I honestly pray and hope that my prediction is wrong.
In my humble opinion, leading Maltese virologist Chris Barbara explained very well why it could take up to five months until Malta is clear of COVID-19. While five months seem to be a long time, it seems that the five months stretch is in fact a blessing as it provides a platform through which our health services would be able to cope better. But, is this all good news?
On the one hand, it seems it is. Our medical specialists and health authorities are well engaged and trying their best to manage and control the trend of the outbreak. This is to ensure that our health services can handle the demands and pressures as more COVID-19 cases emerge.
On the other hand, we have our economy to think about. In the first two to three weeks of this pandemic our economy is already experiencing serious challenges. Challenges that are devastating our businesses and negatively impacting our workforce. All our businesses are no doubt experiencing cash flow challenges and individuals are facing the risk of losing their jobs.
While I am not qualified to comment on whether the government and the health authorities are handling the health side of things correctly, I feel that the government is being too slow and very poor in ideas to rescue our economy. Our economy needs immediate attention. The government must realise that the pace at which business operates is not the same pace at which it operates. Unless government is going to be agile, it may realise that it lost several businesses on the way.
During a press conference given on Saturday, the government announced business aids focussed on releasing pressure on cash flow.
The government must continue to engage with stakeholders to ensure that the spectrum of industries is not just limited to the hospitality, transport and manufacturing industries. Through a collaborative and cooperative approach, it must discuss, define and create pragmatic solutions to protect the entire private business sector. It must recognise its obligation towards our country and quickly announce substantial business aids for all industries.
All propositions must be aimed to secure business continuity and safe jobs.
The incentives announced on Saturday are weak and lack creativity. Many organisations across all industries have already benefitted from NI contribution and tax repayment programmes. While postponing the March and April 2020 payments helps, are the past contractual due payments for these two months postponed too?
Now is the time to puts one’s money where one’s mouth is
The announced VAT incentive is a very weak proposition. Why? During this COVID-19 war, businesses are suffering from the lack of sales. This is not just limited to hotels and restaurants; this includes all the retail industry as customers are simply not interested in being in such spaces.
The impact of lost revenues is throughout all industries, including the service industry. In the absence of sales, surely no VAT will be collected. This means the government’s aid in relation to VAT only delivers if sales are achieved. If sales were being achieved, we would not be having this debate.
The outcome of each of the propositions put forward by the government must be to release the burden on cash flow. Businesses are surely experiencing a significant drop in revenue.
The government must therefore focus on assisting businesses with cost reduction and the provision of funds. The government can reduce cost on fuel, water and electricity, government permits, government licences and make funds available for rent, increased marketing etc. What the government announced on Saturday is weak and a tick in the box exercise.
Other measures should be put in place to safeguard those people who lose their jobs and have home loans. Same goes for those landlords who invested in property through the Buy-To-Let scheme and suddenly find themselves with no tenants, hence no income, no cash for their loan repayment.
The government has been very vocal about its surplus success, even during the press conference itself. Now is the time to puts one’s money where one’s mouth is. This is of course unless the government needs these funds to finance the many wrong and corrupt decisions that a small group of people from within it have taken.
Are we alone? Is COVID-19 damaging the Maltese economy only? The answer is no. All European countries are experiencing the same economic damage and most probably on a larger scale. Once COVID-19 mellows down and the green light shines again, Malta and every other European country is going to join the economy recovery race.
In Malta we must all remember and acknowledge that in this race we are starting with a huge handicap. This is because on several occasions during the last six months alone we have been shown the yellow card and our previous prime minister was shown the red card. Our corrupt government has displaced us from underneath the radar from where we enjoyed growth and prosperity and placed us in the limelight where every other European country has been given every reason not to trust us.
Our reputation damage is a significant deficit and we must work harder if we wish to keep up and place well at the end of the economy recovery race.
The government must therefore not use COVID-19 to overshadow the other serious realities that this country must face head on. The government should continue to deal with COVID-19 and while all of Europe has suddenly reduced its focus on us due to their own COVID-19 challenges, our government must be smart enough to use this time to do all the necessary changes to ensure that when the economy recovery race starts, Malta would have minimised its deficit, its handicap, so as to ensure that we perform better than expected in the race.
In parallel to managing the COVID-19 crisis, the government must focus on implementing a plan. Malta needs a plan to restore its reputation on the world stage, to restore rule of law, to have a functional and credible police force, to serve justice and to ensure that its institutions are truly independent and empowered to deliver.
All well-meaning Maltese citizens want Malta to perform well in the economy recovery race. Our government must protect the future of this country. It must endeavour to ensure that Malta earns back the reputation it enjoyed for so many years. A reputation that secured our iGaming, financial services, maritime, aviation and other industries. If our prime minister really wants to protect this country, he must lead it and start adjusting the sails.
Ivan Bartolo is an entrepreneur and Nationalist MP