We are living in unprecedented times. COVID-19 has literally turned our world upside down.
While trying to contain the spread of this virus, a number of businesses have closed shop and seen their revenue wiped out overnight. Others, while not as severely hit, have suffered a severe reduction in earnings.
Such businesses are still having to keep up with unavoidable daily expenses such as water and electricity costs (catering establishments have to keep their fridges running for 24-hours a day due to food stocks), rent, salary costs, as well as professional costs.
During these challenging times, the reliance on professionals has increased exponentially. Business owners are regularly asking their professional advisors for projections, such as cash flow forecasts, 3+9 projections and comparative scenario reports.
Additionally, they are having to provide advice on what type of government aid they are eligible for.
They are relying on their legal advisors for guidance on what employment laws allow them to do, while juggling with the idea of reducing salaries, in order to survive without making staff redundant.
To make matters worse, these professionals are being faced with situations where their clients are asking them for more assistance, but are unable to pay them their fees, due to the fact that their businesses have been closed, or have been severely damaged by circumstances.
Other professionals too have been hit directly. Lawyers who practice their profession in court are unable to do so, due to the fact that court sessions have been suspended.
70.3 per cent of professionals saw a reduction of more than 50 per cent in their income- Graham Bencini
Medical general practitioners, paediatricians, physiotherapists, consultants and others in the medical field have seen a drastic drop in their revenue, since patients are correctly following the health authorities’ social distancing instructions. Rather than visiting their medical advisors, they tend to seek advice over the telephone, a service which such practitioners do not charge for.
Notaries have also been badly hit. They are unable to register contracts since the public registry and land registry are closed. They are also unable to witness signatures, in an attempt to avoid contact with people. The offer made by some notaries to effect digital signatures is not accepted by all jurisdictions, further curtailing their services.
The real estate sector, one of the country’s prime economic drivers has, like a number of other sectors, been brought to its knees. Estate agents, whose livelihood depends on meeting people and showing them properties, have seen their income crippled, and in many cases, disappear altogether.
Insurance advisors, insurance brokers, tax consultants, auditors, architects, veterinarians and many others have also been drastically affected.
While the government has done well to assist those businesses which have been hit the most, it has totally failed to address the financial problems being faced by these professionals, leaving them out in the cold and offering no sort of assistance or support whatsoever.
Deferral of VAT payments, FSS and NI payments is exactly what it is – a deferral, which means that such payments must still be made in a few months’ time. Not much help there, is there?
On April 24, the Malta Federation of Professional Associations published the results of a survey they carried out about the current working conditions of professionals. The aim of this survey was to understand the difficulties these professionals are facing in the current situation. The full survey report can be seen on the MFPA website.
The survey showed that 97.4 per cent of the respondents usually see clients on a ‘face-to-face’ basis. Twenty-eight per cent of the respondents stated that they have been working longer hours since mid-March, while 72 per cent feel more stressed than they usually do.
The survey also addressed the financial situation of such professionals. A staggering 96.9 per cent of self-employed practitioners stated that they suffered a loss in their income. 70.3 per cent of these professionals saw a reduction of more than 50 per cent in their income, while 83.5 per cent of employed professionals have also suffered financial losses.
Government financial assistance to such professionals is desperately called for, and it is required immediately. Contrary to public perception, not all professionals are wallowing in money. This may be the case with the few, but the vast majority struggle hard to make a decent livelihood.
Comparisons are odious and generalisations are even worse.
It is a fact that wage supplements (for employed professionals) and professional fee supplements (for self-employed professionals) will certainly help.
Granted, government financial resources may be stretched at this point in time, even though we have constantly been told by the government that the economy was at an all-time high. However, assistance can be provided in various other manners, if not on a cash basis.
Tax credits could be considered. The government may offer such professionals a series of tax credits. Such tax credits will be beneficial to professionals since it will reduce their tax liability, while not having any impact on the government’s immediate cash resources. Self-employed professionals will be able to benefit immediately seeing that by the end of June, they must submit their tax returns and tax payments for 2019.
Reduction of utility bills is another relief measure that should be considered. This is a measure that should be applied nationwide, not just to professionals, once all sectors of society are seeing an increase in utilities consumption during these times of house confinement.
It is stating the obvious when one says that professional services are one of the main contributors to our economy. Consequently, they too need to be assisted in order to survive.
Graham Bencini is president of the PN’s Forum for Professionals.