[WATCH] Edward Scicluna justifies government’s cautious approach on aid package

Country needs to have reserves since nobody knows how long the coronavirus crisis will last, Finance Minister Edward Scicluna says on TVM’s Xtra

Finance Minister Edward Scicluna was interviewed via video conferencing on tonight's Xtra
Finance Minister Edward Scicluna was interviewed via video conferencing on tonight's Xtra

Saving jobs is government’s priority but the country needs to retain reserves because no one knows how long the coronavirus pandemic will last, Edward Scicluna said.

The Finance Minister said the uncertainty over the length of this crisis was the reason why government was not spending more as requested by employer organisations.

The government unveiled a generous aid package a fortnight ago that would finance the wages of employees in certain sectors at €800 per month per employee. However, the measure covered a range of companies that collectively employed some 60,000 workers.

Another 100,000 workers in other sectors would only benefit from €160 per month.

Scicluna was interviewed on TVM’s Xtra by Saviour Balzan on Thursday.

Asked whether the government is ready to further increase the national debt so as to support the economy at this time, Scicluna said that, while Malta is in a position to do so, no one knows how long this pandemic will last.

“This is the answer I give when people wonder why we don’t spend more – because we don’t know how long this will go on for,” he said. 

Scicluna said the government’s first reaction when faced with this unprecedented situation was to safeguard jobs, especially in those sectors which have been completely shut down due to the impact of the coronavirus pandemic, especially the tourism sector.

This was the reasoning behind the first economic package that the government put forward, he said. However, he added, that government soon realised it would not be sufficient. 

“As time passed we realised that this would not be enough, and that in an indirect manner, all the sectors of the economy were going to be affected by this. Consequently, we started adding other sectors, in what is still a work in progress. Although these will not be granted the entirety of the €800 per month, they will still be benefitting from it partially,” he said.

Malta Employers Association director general Joe Farrugia
Malta Employers Association director general Joe Farrugia

The Finance Minister said the country’s funds are being directed towards two goals – ensuring the safeguarding of jobs, and making certain that businesses have enough liquidity and cash flow to survive. 

“The first aim is to protect jobs so employees will remain on the company’s payroll instead of becoming unemployed, which means that once all this is over, they will not need to enter the job market looking for work,” he said.

Scicluna also said that the government is now in a position to direct banks to put a moratorium on loans so as to further help businesses.

The Finance Minister also noted that one must also think about the economic recovery which has to follow, once this crisis is over. 

“If the future is uncertain, one has to leave some reserves, not only in case this situation continues to prolong itself, but also for when we come to the recovery. That is where we must give funds. The virus would be behind us, so we would then look to the future to return to the economic state that we were at, but in order to do that we would need to pump money into those sectors which need it,” he said.

Joe Farrugia, director general of the Malta Employers Association, expressed similar sentiments, noting that the uncertainty of the situation is amplified by the fact that the recovery process will be different for every sector.

“Every business has been hit,” Farrugia said, arguing that while many have the resources to stay afloat for a few months, there are limits beyond which they cannot survive.

“That is why this is the time for the government to help. When we speak about helping businesses, we are talking about saving jobs. The €800 which the government is passing on to businesses will ultimately end up in people’s pockets,” Farrugia said.

Questioned by Balzan as to what further measures he wishes the government will enact, Farrugia said that the government should expand its economic aid to more companies. 

“There are sectors that have not been ordered to close down, but who are still at a standstill, and are not eligible for the aid which is being offered to others. The government should identify these pockets and pass on its incentives to them as well, so that we can keep companies alive, and safeguard jobs,” he said.

Protecting your mental health

Meanwhile, psychiatrist Anton Grech, the clinical chairperson of the Department of Psychiatry, had some advice for those suffering from increased anxiety due to the pandemic.

Grech spoke of the impact of spending too much time consuming negative news, noting that too much negativity will only increase anxiety.
Instead, he advised that people should fill their time with activities they enjoy and which distract them, saying that one should pick up past hobbies once more. 

“There is no health without mental health,” Grech said, noting that while the country is currently concerned about physical health, we also need to be careful to safeguard our psychological health during such times.