[WATCH] Silvio Schembri defends coronavirus budget amid mounting criticism

Silvio Schembri has defended the package offered by government to mitigate the economic impact of the coronavirus, insisting no one knows how long the crisis will last.

The Economy Minister said on TVM’s Xtra that the government had to ensure it will still be in a position to help businesses further down the line.

“If we get all we have and spend it all in three months, only for this crisis to last six months, what would we do then, tell the people that we can’t help them anymore?”, the minister said.

He was forced to defend government's emergency budget amid rising criticism that it is not enough to prevent businesses from going under and laying off workers.

Schembri said that unlike many other European countries, who are putting forward aid packages that correspond to 1% or less of their GDP, Malta’s coronavirus budget corresponds to 1.5% of the country’s GDP.

The Economy Minister said that with this budget the government is prioritising the safeguarding of employment, and the protection of the most vulnerable members of society.

“These measures ensure that those families who have little more than a minimum wage, and are possibly already suffering, will not need to suffer even more,” he said.

Schembri said that the government had to find a balance, which is why the incentives were calculated on the basis of a monthly salary of €800, noting that the government cannot afford to cover wages of those earning €40,000 or €50,000 a year.

Responding to critical comments from Chamber of Commerce President David Xuereb, who insisted that the government should cover 50% of employee wages, Schembri said the government needs to look out for everyone’s interests.

The government has to look out for businesses, people, and the country as a whole, and as such, would not accept the Chamber’s proposal, which also includes the caveat that employees accept a reduction of 25% in wages.

“When the country was doing well, everyone was benefiting… by the same principle, we need to ensure that, now that we are going through difficult times, everyone shares the burden,” he said.

The Economy Minister said that while the government understands the difficult position which businesses find themselves in, there must also be respect shown towards workers. 

“There needs to be a chain between workers, businessmen, and the government,” he added.

He concluded by noting that these measures are not set in stone and subject to change should the need arise, stating that there will eventually be further measures put forward to lessen the burden on businesses, but that this is a process that will take time. 

 “The situation is constantly changing and we will adjust accordingly,” Schembri said.

Government’s measures will lead to mass redundancies

Opposition MP Claudio Grech (left) says government's rescue package falls short of what the country needs

Nationalist MP Claudio Grech said that instead of a message of hope, the Maltese people were presented with a Prime Minister who is resigned to the fact that many people will lose their jobs. 

“The narrative they put forward is one which already shows that this is a government that is taking action too late in the day, and putting forward a programme of measures that will lead to one thing only – mass redundancies,” Grech said, adding that this is something which is already being proclaimed by the relevant unions.

MHRA President Tony Zahra, and Chamber of SMEs President Paul Abela said as much in recorded comments.

Zahra insisted that the government has yet not understood the gravity of the situation, and Abela warned that many jobs are going to be lost unless this budget is revised. 

Grech lambasted the government’s measures, claiming that, while the average national monthly wage is of €2,000, the maximum amount that the government is offering is €320.

“How can you incentivise an employer to keep his employees with such an amount?” he asked.

The Nationalist MP argued that the government should have immediately announced that it would be covering all the costs incurred from quarantine leave, as well as 50% of employee’s wages.

Such measures should not be seen as “gifts”, Grech insisted, noting that the unions’ appeals to the government are merely a reflection of a reality where “work has dried up”.

“Employers don’t want any gifts,” Grech said. “What we are calling for is 50% of wages capped off at a figure which is agreed upon by all the relevant bodies, and not decided by the government on its own.”

Grech added that no businessman is expecting “hand-outs” from the government. “What they are expecting is a government that understands them, understands the circumstances, and is ready to put this country’s wealth – which was not created by the government, but by business and workers – to good use.”

The Nationalist MP concluded by appealing to the government to enter into discussion with the Opposition, and all the relevant bodies to find a solution so that, once this crisis is over, employees will still have their jobs, and the country will have the energy and ability to rebound and rebuild.