Social partners had a mixed reaction to the budget speech on Monday.
Educators expressed their dismay at the lack of measures to help tackle a shortage of teachers, employers highlighted the need for more long-term measures, a trades union group said the budget was a limited one, and developers expressed their satisfaction that their suggestions were taken onboard.
What about education? – MUT
The Malta Union of Teachers said the budget was a very dry one when it came to education.
The union said none of its proposals, including incentives to attract youngsters to the teaching profession and infrastructure investments in schools, were included.
Instead, the budget speech focused initiatives announced years ago, the union said.
The MUT said the government was not taking problems in the education sector seriously.
This would result in serious consequences, as problems in education would only increase.
In a separate reaction, the Union of Professional Educators said the greatest problem facing the country was a shortage of practicing educators.
“Thus, it would have been wiser had the government done more to address this issue”, the union said.
Need for more long term measures – Employers
The Malta Employers’ Association welcomed the 'positive budget', although it cautioned that long-term measures were needed to sustain it.
It said the current level of economic activity needed to be supported by longer term strategies that ensured sustainability and to address the many challenges which the country faced, both economic and social.
Chief amongst which is the demographic transformation which the country was going through.
The MEA said that in spite of the low birth rate, the population was growing due to the rapid influx of foreign workers which were one of the main drivers of the economic growth, but which are also partly the cause of the current development boom, traffic congestion, pollution and other undesirable effects.
A balance needed to be struck between the exigencies of short term growth and long term sustainability, as it could have adverse effects on particular sectors, such as tourism and also on the quality of life of the population.
"The budget attempts to address these challenges through numerous positive environmental measures which also require sustained long term efforts, such as the shift to electric cars. The environmental incentives are too focused on construction, with less prominence given to other economic sectors," the MEA said.
A limited budget – trades union group
FORUM, a grouping of trade unions, said that while the budget included a number of good measures, including a reduction in income tax rate for part-timers, the “limited” budget did not address pending problems faced by its members.
The budget did not address problems like a lack of teachers, nurses and social workers, nor did it delve into the work-life balance directive, the introduction of family leave, and a change in the capping of pensions, the group said.
It also noted how existing schemes promoting energy sustainability for NGOs and trade unions were not extended.
The FORUM said the 2020 budget was a limited one that consolidated existing initiatives, but failed to create new ones and embark on new capital projects.
We are happy - developers
The Malta Developers Association (MDA) expressed its satisfaction that its proposals for the budget have been adopted by the government.
MDA said it was pleased to note that tax incentive schemes introduced in previous budgets were extended.
These include the first-time and second-time buyer schemes, incentives for those who buy property in Gozo and in village cores and the incentives for parents who hand over their business to their children.
Other measures introduced in this budget in response to requests submitted by MDA include tax incentives for all contractors who invest in new machinery and the increase from €150,000 to €175,000 in the value of property bought by first-time buyers that is exempt from stamp duty.
This will continue to help all those who decide to invest in their first home, the MDA said.
MDA said it was also very satisfied to note the reduction on duty from 35 per cent to 15 per cent on contracts when airspace was sold for construction.
The developers’ lobby said it was convinced that the implementation by government of these measures will be of benefit to all its members.
Moreover, the reduction of income tax on overtime is also considered as a very good incentive for the property and construction sector.
A budget of consolidation - tourist lobby
The Malta Hotels and Restaurants Association said this was a consolidation budget which built on the economic principles established over recent years.
Budget 2020 was also a budget with a heavy environmental spin.
From a social perspective, budget 2020 further aimed to spread the wealth being generated by the economy.
The MHRA said sustainability remained the name of the game and it was imperative that the government launched its vision 2025, tackling issues such as the need for human resources and a fair level playing field in tourist accommodation.
GWU pleased its measures were adopted
The General Workers' Union said it was pleased that the government had adopted its proposals, such as by making a commitment to bring in measures to ensure there was equal pay for the same work.
It also welcomed the extra day of vacation leave, lower tax on overtime, and better social benefits including higher pensions.
It also welcomed environment-friendly measures and said the Budget was continuing to distribute the national wealth among the people.
The GRTU said this was a positive budget for a growing economy. It, however, looked forward to the government adopting its call for income tax on small business to be reduced to 20% to enhance their competitiveness.
AD: Revision of minimum wage needed
Carmel Cacopardo, leader of Alternattiva Demokratika welcomed improvement of social services but noted that the government had not embarked on a revision of the mechanism used to calculate the minimum wage.
"This exercise is now long overdue. Tinkering with income tax payable on overtime is insignificant when compared to what is really required. We need a minimum wage which reflects the real needs of workers,” he said.
He also pointed out that the government had realised, at last, that it needed a ‘Green New Deal’ strategy.
"But for such a strategy to make sense, the government should first dismantle its existing strategies which are in direct opposition to a ‘Green New Deal’. It does not make sense, for example, for the government to declare
the need to protect the environment but then dishes out incentives of all sorts to encourage the property market; nor does it make sense to keep to its programme of intensive development of the road infrastructure, or keep pushing for the development of a tunnel between Malta and Gozo, which only serves the free movement of more cars between the islands. Instead of grants for batteries to store electricity generated through solar panels, it would have been much better had Government embarked on a massive investment to ensure the better distribution of electricity, as this would of itself increase the potential for the generation of more renewable energy by households."
No shock measures are good for business - Malta Chamber
The Malta Chamber of Commerce, Enterprise and Industry said it was pleased to see that no surprise measures of new taxes were included in the Budget for 2020, saying this was an advantage for business momentum.
It was similarly pleased to see initiatives for alternative transport were rolled over and said that cutting tax rates on overtime was a good example of how the government could incentivise work and help reduce labour shortage problems.
There were a few words of caution, however. The Chamber said that it wanted to see more measures to strengthen the construction industry and that the Budget had done too little to bolster Malta's competitiveness.
"The Chamber has consistently highlighted these shortcomings and continues to call for measures to ensure that key institutions in the island are adequately equipped and resourced with the right professional people to guide the country towards better competitiveness," it said.
Positive, next steps should be for SMEs - GRTU
The GRTU, which represents retailers and small and medium-sized enterprises, saw plenty of positives in Budget 2020, from cutting VAT on certain education courses to increasing pensioners' purchasing power.
The government had also taken up the GRTU's proposals to ensure adequate connectivity between Malta and Gozo, it said.
It said the government's future step should be to enact another GRTU proposal - that of capping tax rates for SMEs to a maximum of 20 per cent.
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