The Malta Chamber terms the Budget for 2020 as a mixed bag.

In fact, Malta’s foremost employer organization feels that while some steps in the right direction were made, these were not as bold as desired.  In fact, it is safe to say that the Budget was very strong on elements of social nature, mild on issues related to the environmental but more could be done on the economic side of things.

Government was sensitive to the requests and proposals of the Chamber on a number of matters, yet fell short of taking the opportunity to make a notable impact in certain areas that really require serious attention in the immediate term.

The Chamber appreciated the fact that Government refrained from introducing any surprise measures or new burdens on businesses. This has been an issue in the past, and the Chamber is pleased that Government has heeded the Chamber’s calls of once again, not surprising businesses at such a delicate time of year, to the detriment of business momentum.

At the same time, in the light of Malta’s recent movement in the wrong direction in the World Economic Forum’s Global Competitiveness Index by two places, the Chamber expected more investment in resources to strengthen the shortcomings exposed, namely the soundness of institutions, skills, market structure and financial systems.

The Chamber has consistently highlighted these shortcomings and continues to call for measures to ensure that key institutions in the island are adequately equipped and resourced with the right professional people to guide the country towards better competitiveness ranking required by Malta’s economic ambitions as a global player.

The Chamber once again insists with Government, to prioritise Malta’s competitiveness and enhance the country’s attractiveness to investors.  Malta cannot afford to erode its inherent competitive advantage further and delay addressing fundamental aspects of competitiveness, in the interest of preserving its current success.

With reference to specific sectors, the Chamber observed references to incentivising new sectors such as Tech, Aviation, Start-Ups and Video Game Development and eSports, as well as support to the manufacturing industry.

However, the Chamber is compelled to note the addition of another day of vacation leave in lieu of public holidays falling on a weekend. In the light of the fact that this is the third day of additional leave being granted during this legislature, the Chamber reiterates its position that this will further intensify cost-competitive considerations for Maltese companies, which are increasing to levels of concern particularly to those economic sectors which are expanding at below-average pace.

At the same time, the Chamber notes the introduction of a 15 per cent flat tax rate on the first 100 hours of overtime for those workers earning up to €20,000. Whilst this is regarded as a step in the right direction, the Chamber looks forward to further “make-work-pay” incentives to help alleviate the current shortage of labour and skills being faced by all employers on the island.

Further to Chamber calls for reforms in Rent Laws and the Construction industry, the Chamber welcomed the announced tax incentive for construction companies to modernise their equipment. The Chamber also noted the support measures for people to move from rented to owned property and the extended exemption of duty on documents on the first €175,000 of the property value. Nevertheless, the Chamber expects further measures that strengthen the quality and reputation of the construction industry. Likewise, the Chamber expects the issues pertaining to Rent Laws to be addressed.

In the coming days, the Chamber shall be seeking clarifications on a number of the measures and initiatives announced during the Budget speech as it will endeavour with further discussions with all stakeholders.