[WATCH] Robert Abela unveils new coronavirus aid package: government will pay €800 monthly wage for workers in hard-hit sectors

Prime Minister Robert Abela unveils a new economic package that will see government finance the wages of a full-work week for some sectors decimated by the current crisis • Employers agree minimum top-up

Prime Minister Robert Abela
Prime Minister Robert Abela

Government will fork out €61 million per month to finance wages in sectors hard-hit by the coronavirus and €10.5 million to sustain workers forced to take leave.

A new economic aid package was unveiled this evening by Prime Minister Robert Abela after agreement was reached with unions and employers during a meeting of the Malta Council for Economic and Social Development.

Journalists were given a technical briefing before the Prime Minister’s announcement.

The improved package of direct aid will see government finance a full five-day work week at a minimum of €800 per month for all workers and self-employed in critical sectors that were decimated by the coronavirus measures. The measure also applies to part-time employees at a reduced €500 per month.

These critical sectors include hotels, restaurants, certain retail outlets, travel agencies, transport operators, entertainment, barbers, beauticians and hairdressers. All activities hit by forced closure as a result of public health measures will benefit from this scheme.

This measure will cost government €44 million per month.

Employers guarantee minimum top-up

However, it was agreed at the MCESD that employers will guarantee a minimum top-up of €400 per month per employee to ensure that employees receive a minimum of €1,200 per month.

Employers that cannot afford the top-up will have to obtain permission from the Director of Labour.

Nothing prevents employers from giving more than the agreed minimum top-up.

Some companies will receive one-day wage

A second tranche of aid will be provided for companies and sectors hit by reduced consumption, which will see the government finance one day per week in wages, based on a monthly pay of €800. The cover may increase to two days over time.

Gozitan companies and the self-employed will have two days covered immediately. Those self-employed who employ people with them, will be entitled to three days of cover.

The companies in this category include those in manufacturing, some retail outlets and the information sector.

This measure will cost government €17 million per month.

  • The full list of companies/self-employed and the schemes applicable to them will be released next week and will be communicated through Malta Enterprise.

Forced leave

The aid package unveiled tonight retains the €800-per-month benefit for a parent that has to stay at home because schools have closed. This benefit applies to people where both parents work in the private sector.

This alone will cost government €9.5 million per month.

The package also includes an €800 per month benefit for disabled people who work in the private sector but choose to stay at home. This will cost €1 million per month.

Anybody who had his job terminated since 9 March because of the coronavirus crisis will receive an unemployment benefit of €800 per month.

The measure to part-finance the quarantine leave of employees with a €350 contribution has been retained.

Public sector employees

Government officials who gave the media a briefing before the Prime Minister’s address, said government had no intention of cutting wages in the public sector and its agencies.

However, cost-saving measures such as reducing overtime were being implemented.

Tax deferrals

The government has retained the initial measure to defer all income tax, national insurance and VAT contributions due by companies and self-employed individuals – a measure that will cost public coffers €700 million in forfeited revenue.

No date has yet been set for when the deferred tax will have to be paid.

Government will also put up €900 million in guarantees to enable businesses to access bank finance.

The health authorities will also receive €35 million more in budget allocation, a measure that was announced last week.

Debt up by 8%

The measures announced tonight will be sustained for three months but can be reviewed depending on how the situation develops.

The package means that government will have to loan more than €1 billion to cover the full cost. This will cause public debt to increase by about 8%.

Government anticipates that the debt-to-GDP ratio will still be less than 50%, giving it enough fire power to increase the aid package at a later stage if the situation does not improve.

Government’s aid package last week was widely criticised by employers and unions because it fell short in its scope to protect jobs.

Abela gave the constituted bodies a briefing of the measures during a special meeting of the MCESD this afternoon, where unanimous agreement was reached.

Talks between the government, employers and unions had been going on all weekend and yesterday.

Asked if he would consider imposing ‘windfall tax’ on businesses which made big profits in the last year or so, Abela said that the government vision is that of aiding businesses and workers rather than taxing them. 

The PM was also asked if he would consider calling on banks to lower interest rates on loans. He said that discussions are already underway, with some banks already agreeing to lower interests on personal, home and business loans. 

On the government’s decision to issue calls for a makeshift hospital in light of the ongoing Covid-19 pandemic, rather than make use of facilities within St Luke Hospital currently owned by Steward Healthcare, Abela said that a revision of the contract was underway before the coronavirus situation, with such a revision having to be halted due to the pandemic.

“A stock-take was underway, and while the evaluation has not been halted, it has been put on the back-burner,” he said.