Malta employers: Government's coronavirus rescue package won't keep ship afloat

The Malta Employers Association said that the government's €1.81 billion care package to mitigate the Covid-19 crisis might sound good on paper but "it falls short of what is necessary to keep the ship afloat."

On Thursday, the government announced a mini-budget in light of Covid-19, guaranteeing companies €700 million in tax deferrals and €900 million in guarantees.

"The figure of €1.8 billion sounds impressive from a public relations perspective [but] the contents of the package are different from the label, and will cost government significantly less than the amount stated," the MEA said in a statement on Thursday.

"Although the package does contain measures that do address the hardship that many companies are and will face during this crisis, it falls short of what is necessary to keep the ship afloat, and the incentives will, in many cases, be insufficient to curb the onset of layoffs in many firms.

"The bulk of the package is a deferment – not cancellation - of VAT and Social Security payments, and loan guarantees. The impetus should have been more on wage subsidisation, rather than liquidity. This would have been more effective to protect jobs in the private sector," the statement read.

The association said that, together with other employer bodies, it had submitted concrete proposals to address the situation more effectively. 

It praised its "positive aspects" and said assistance to self-employed and parents who cannot telework was a good step.

On quarantine leave, the MEA said that a €350 grant was insufficient and that, in any case, employers are in principle against the imposition that they have to pay for such leave. 

"Quarantine leave is a social service, and social services are financed by taxes, not by employers. Although the amount announced is an improvement on the initial position, MEA will continue to strongly oppose the amendments to the legal notice both because of its contents and also because of the manner in which it was introduced, which has bypassed all normal channels of social dialogue.

"All in all, the measures announced are a step in the right direction but fall short of covering the full scale of potential problems that are being envisaged by many businesses. It is hoped that this package will be enhanced by other measures that the government may introduce in the near future."

In a separate statement, the Malta Hotels and Restaurants Association said that the hotels, restaurants and other hospitality stakeholders are at a standstill.

"The airport is closed, restaurants are closed, all hospitality events cancelled and hotels are ghost hotels with near-zero occupancy."