The government’s second package of fiscal incentives to mitigate the adverse economic effects of the coronavirus pandemic was not greeted with satisfaction across the board.
Business lobby groups and trade unions generally welcomed, in tandem, the fiscal initiatives aimed at protecting employment and supporting businesses, just as they had lined up to reject the earlier package on offer. On the other hand, the Nationalist Party, while acknowledging that this second package was more substantial than the first, argued that it came late and was too selective.
The organisations representing employers, small businesses, Gozo entrepreneurs and the self-employed seem satisfied that the government took note of their initial concerns and beefed up the packet of measures. They believe that this should help to avoid a crisis in employment and economic activity. As is to be expected, they all argued that since the impact of the crisis is still difficult to predict, further measures may be needed in the coming months.
Small businesses want banks to do more by reducing interest rates even if these rates are the lowest they have ever been thanks to ECB monetary policy. Some banks, on their side, announced they will be relaxing repayment programmes of loans to help their customers weather this economic storm.
Trade unions agree that the new set of measures should help reduce the impact on employment. Like the business lobbies, they insist they will continue to identify stress points in the labour market as this crisis evolves.
Some will argue that a nurses’ union asking for danger money for “scared nurses” is not in line with what these health workers should expect from the community they serve. Many trade unions have discarded the concept of danger money for working in a high-risk environment. Instead, union representatives should insist on adequate pay at all times for health workers and safer working conditions.
Surely no one will begrudge the payment of a productivity bonus to all healthcare professionals for their selfless commitment to patients in this extraordinary crisis.
The problematic element of defining what needs to be done in this crisis is the uncertainty that surrounds it. It is impossible to predict how long this crisis will persist from a medical perspective, when the lockdown will end to enable workers to go back to work, and when consumer confidence will return to start the wheels of the economy turning again.
While the fiscal measures will undoubtedly help to mitigate the economic effect on economic operators and their workers, it is still too early to decide whether enough has been done. The cost of dealing with this crisis has to be paid by today’s and tomorrow’s generations. Prudence can never be thrown to the wind even in these extraordinary times.
Of course, not everyone affected by this crisis will benefit equally and directly from the latest fiscal measures. But is it realistic to expect the government to issue a fully comprehensive insurance policy underwritten with taxpayers’ money to ensure that no one suffers any pain in this crisis?
Hopefully, in a few months’ time, some sort of normality will return. It will be a new normality built on the realisation that the time has come to invest in the resilience of our businesses to weather storms without going under.
We must continue to act on the evidence of the damage that is already being done to employment and economic activity.