The Malta Independent 16 July 2020, Thursday

Budget 2020 reactions: Some say it’s good, others say it’s bad

Tuesday, 15 October 2019, 08:37 Last update: about 10 months ago

As expected, there was a mixed reaction to the budget for 2020 presented by Finance Minister Edward Scicluna.

A budget of contradictions – Alternattiva Demokratika

Alternattiva Demokratika – The Green Party’s Chairperson, Carmel Cacopardo issued the following reaction to Budget 2020 speech.

“As expected, Government is strengthening various social benefits, including pensions. These affect in particular, rightly so, those categories which were ignored for a number of years. It is however noticed that government has once more failed to embark on the process of revising the mechanism used to calculate the minimum wage, in order that this reflects the real needs of workers. This exercise is now long overdue. Tinkering with income tax payable on overtime is insignificant when compared to what is really required. We need a minimum wage which reflects the real needs of workers.


“We note that Government has almost announced the cut-off date for the importation of cars running on petrol and diesel. But it has not arrived there yet. There is no seriousness in the manner in which this topic is being addressed, because had government been determined in this respect it would have declared an immediate moratorium on the construction of fuel service stations. As an additional bonus payable to every citizen, had it been serous, it would have immediately withdrawn all operating licences of fuel stations which have not been in operation for some time. In addition, it would have halted its senseless development of road infrastructure which serves only to increase cars on our roads. The alternative to this, are measures to reduce the number of cars on our roads.”

“Government has realised, at last, that it needs a ‘Green New Deal’ strategy. That is, a strategy which addresses the impacts of climate change sustainably, economically, ecologically and socially. But for such a strategy to make sense Government should first dismantle its existing strategies which are in direct opposition to a ‘Green New Deal’. It does not make sense, for example, for Government to declare the need to protect the environment but then dishes out incentives of all sorts to encourage the property market; nor does it make sense to keep to its programme of intensive development of the road infrastructure, or keep pushing for the development of a tunnel between Malta and Gozo, which only serves the free movement of more cars between the islands. Instead of grants for batteries to store electricity generated through solar panels, it would have been much better had Government embarked on a massive investment to ensure the better distribution of electricity, as this would of itself increase
the potential for the generation of more renewable energy by households. The lack of effective measures to generate more energy from renewable sources clearly shows that Government is not really committed in implementing a real ‘Green New Deal’ strategy.”

“The Minister of Finance is taking everybody for a ride, when on the one hand he speaks of Gozo as an ecological island but at the same time he keeps insisting on the ‘need’ for a tunnel between the
islands, which tunnel will only serve to accelerate the environmental degradation of Gozo.”

Carmel Cacopardo concluded by saying, “This budget is based on glaring contradictions.”  


Budget continues to build on past successes - MHRA

Budget 2020 is a consolidation budget which keeps building on the economic principles established over the past recent years.  Budget 2020 is also a budget with a heavy environmental spin. Indeed, the proposed actions bring along challenges for MHRA members, amongst others, due to changes which will impact current operations, however we believe it is action in the right direction.  From a social perspective budget 2020 is a budget which aims to further spread the wealth being generated by the economy and therefore is a significant contribution to the people in need in our society.  MHRA commends Government’s concrete initiatives to further refine and embellish the tourism product and further spread amongst the many the benefits generated from this important economic sector.

Sustainability however remains the name of the game and MHRA considers imperative that Government launches its vision 2025.  Limiting factors such as human resources need to be taken into consideration in this vision 2025.  MHRA has for too long called on Government to spearhead effective control measures in relation to the provision of private accommodation to ensure a fair level playing field with Hotel type accommodation providers. MHRA will be evaluating the budget estimates in more detail in the coming days in order to better understand the actual impact on the sector.       


A positive budget which needs to be supported by longer term strategies - MEA

The national budget presented for 2020 is a reflection of a strong macro-economic stability, resulting from a budget surplus over the past few years, falling public debt which is expected to reach 40% of GDP in 2020, unemployment which stands at 3.5%, relatively low inflation and a robust economic growth. 

There are various labour market measures that aim to increase labour participation. The preferential tax on overtime will incentivise more employees to work overtime in their own workplace in preference to part time work. The measures to increase the welfare of pensioners are commendable, but preferably might have been supplemented with stronger incentives for active ageing measure to retain pensioners in employment.  The Malta Employers’ Association has always expressed itself against the increase in optional leave, as Malta already has among the highest allocation of leave days in the world. The day’s increase in optional leave will erode our competitiveness. The pronounced measure regarding outsourced work needs to be discussed in detail as it can create inequalities within companies.

The investment in education is important but there should be stronger evaluation that guarantees that the country is getting an adequate return on the investment in this crucial sector, combined with an intensified effort to bridge the gap between education and industry.     

This level of economic activity needs to be supported by longer term strategies that ensure sustainability in the longer term, and which address the many challenges which the country faces, both economic and social. Chief amongst these is the demographic transformation which the country is going through. In spite of the low birth rate, the population is growing due the rapid influx of foreign workers which are one of the main drivers of the economic growth, but which are also partly the cause of the current development boom, traffic congestion, pollution and other undesirable effects. A balance needs to be struck between the exigencies of short term growth and long term sustainability, as it could have adverse effects on particular sectors, such as tourism and also on the general quality if life of the general population. The budget attempts to address these challenges through numerous positive environmental measures which also require sustained long term efforts, such as the shift to electric cars. The environmental incentives are too focused on construction, with less prominence given to other economic sectors.

Another situation that needs to be addressed is the reputational damage Malta is suffering from due to the bad publicity caused by numerous scandals. Our current level of economic performance is heavily dependent on our reputation as a safe investment destination that will sustain sensitive sectors such as financial services and igaming. The issue of correspondent banks needs an urgent resolution, and the fall in placing in the competitiveness index, as shown in the Global Competitiveness Index is an eye opener that we can never be complacent about our successes.  Yet the budget speech

confirms this governments’ attempts to break into new sectors, such as blockchain to further diversify the economy. This diversification is one of our major strengths, considering the size of our economy. 


MDA satisfied government adopted its budget recommendations 

The Malta Developers Association (MDA) said it is highly satisfied that its proposals for the Budget have been adopted by the government, as was confirmed from the Budget Speech, announced earlier today.

MDA is pleased to note that the time limits of tax incentive schemes introduced in previous budgets were extended. These include the first-time and second-time buyer schemes; the incentives for those who buy property in Gozo and in village cores; and the incentives for parents who donate their business to their children.

Other measures introduced in this budget in response to requests submitted by MDA include tax incentives for all contractors who invest in new machinery and the increase from €150,000 to €175,000 in the value of property bought by first-time buyers that is exempt from stamp duty. This will continue to help all those who decide to invest in their first home.

MDA is also very satisfied to note the reduction on duty from 35% to 15% on contracts when property rights are ceded (cessjoni).

MDA is convinced that the implementation by government of these measures ­– requested by it – will be of benefit to all its members.

Moreover, the reduction of income tax on overtime is also considered as a very good incentive for the property and construction sector.


Union of Professional Educators

As a Union we are pleased to see that yet again our country has recorded a surplus and that our economy has continued moving ahead.  We more than welcomed the fact that this budget did not bring with it any direct taxation on educators. On the other hand, we feel that one of the greatest challenges currently facing our country, is that of a shortage of Educators practicing within the educational system. Thus we feel, that it would have been wiser that the government done more to address this issue.


What about education? - MUT

The Malta Union of Teachers said the budget was a very dry one when it came to education. 

The union said none of its proposals, including incentives to attract youngsters to the teaching profession and infrastructure investments in schools, were included. 

Instead, the budget speech focused initiatives announced years ago, the union said. 

The MUT said the government was not taking problems in the education sector seriously. 

This would result in serious consequences, as problems in education would only increase. 


A limited budget - FORUM

FORUM, a grouping of trade unions, said that while the budget included a number of good measures, including a reduction in income tax rate for part-timers, the “limited” budget did not address pending problems faced by its members. 

The budget did not address problems like a lack of teachers, nurses and social workers, nor did it delve into the work-life balance directive, the introduction of family leave, and a change in the capping of pensions, the group said. 

It also noted how existing schemes promoting energy sustainability for NGOs and trade unions were not extended. 

The FORUM said the 2020 budget was a limited one that consolidated existing initiatives, but failed to create new ones and embark on new capital projects. 


GWU pleased with budget

The General Workers' Union said it was pleased that the government had adopted its proposals, such as by making a commitment to bring in measures to ensure there was equal pay for the same work.  

It also welcomed the extra day of vacation leave, lower tax on overtime, and better social benefits including higher pensions.

It also welcomed environment-friendly measures and said the Budget was continuing to distribute the national wealth among the people.


UHM-Voice of the Workers

This budget was afraid to tackle the transport problem and the threat of foreign workers, as well as the problems the working people will find when they become pensioners, the UHM- Voice of the Workers said.

Welcoming the one-off bonus to make up for the increase in the price of milk and bread and other measures related to the purchase of property by first-time buyers, the union said it expected more on social housing.

The union greeted the initiative to help operators of the construction industry to replace old machinery, but it expected a fund to compensate victims of accidents on construction sites.


BirdLife disappointed that not enough importance has been given to biodiversity 

BirdLife Malta welcomed a number of environmental initiatives announced yesterday in the Budget for 2020 but is disappointed to note that not enough importance has been given to measures directly related to biodiversity and nature protection, including our call – supported by several other NGOs – for the establishment of a specialised #WildlifeCrimeUnit with the necessary resources to combat crimes related to nature in Malta.

It is positive that finally the MaltaGov will be publishing the studies related to the Malta-Gozo tunnel project. We look forward to see what these studies say. We are also satisfied with the news that there will be an increase in afforestation projects in urban areas and we think that this is a step in the right direction as we also welcome the proposal to roof over part of Regional Road and the Santa Venera Tunnels where a much-needed recreational open space will be created in this area.

In our opinion the most significant environmental changes being announced in this budget are those in relation to incentives to ban the use of plastic and those which will enable Malta to fulfil its European Union - EU obligations in relation to #SingleUsePlastics. We agree with the ban on the importation and production of plastic bags, plastic cutlery, plastic straws and single-use plastic plates from the start of 2021 and the total ban on their distribution and sale after 1st January 2022. We also applaud the subsidy scheme launched by the Government to help shops to set up Green Corners, where part of the shop is dedicated to the sale of food products and others by weight using containers provided by the clients.

BirdLife Malta also welcomes the incentives to reduce the impact of cars on air pollution, the launch of new ferry connections as alternative means of transport, the introduction of a lower tariff and residential charging points for electric vehicles, and the news that a final date will soon be recommended after which polluting vehicles will not continue to be imported to Malta.

On the other hand BirdLife Malta is somewhat disappointed that the budget practically ignores the protection of natural habitats, in particular #ODZ, which do not seem to be important for the Government. We were expecting the Government to announce it is setting up – or that at least it is preparing to set up – a Wildlife Crime Unit, something BirdLife Malta and other environment NGOs have been calling for and on which it seems there is a general agreement. BirdLife Malta will continue with its efforts to convince the Government to take the protection of Malta’s biodiversity seriously – something which, so far at least, does not seem to feature in any way on the national agenda.


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