The Malta Independent 14 July 2020, Tuesday

€200 million to be spent over the next 3 months in financial aid for businesses – Economy Minister

Karl Azzopardi Wednesday, 10 June 2020, 11:15 Last update: about 2 months ago

€200 million will be spent over the next three months in financial aid for businesses, to help them get back on their feet, Economy Minister Silvio Schembri said.

He was addressing a press conference on Wednesday morning, in which he described, in more detail, the financial aid that will be given to businesses in the coming months as per the mini-budget that was announced last Monday.

On Monday, the government presented a multi-million euro 'mini-budget' aimed at helping the economy recover from the effects of the Covid-19 pandemic. The budget includes measures that affect the economy directly, as well as others aimed at helping families return to normal consumption levels.

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"This mini budget is part of a strategy that we had planned at the start of the pandemic in Malta," Schembri explained. "We knew it would have an effect on demand for domestic products, exportation and importation; apart from the obvious effect it would have on tourism in general."

He said that because of the uncertainty that resulted from the pandemic, the government had to work on a plan to tackle this fear. "We had to pause our focus on our economy to preserve our economic achievements so that once we came out of the pandemic we could hit the ground running."

"It is important to note that we paused not stopped. We had a lot of pressure to go into a total lockdown and if we gave in to that pressure, and if the PM did take that decision, we would not be speaking like this as we would have a dead economy which would never be able to be resuscitated. This is why we call this a plan to regenerate our economy," he added.

In saying so, Schembri explained that €200 million will used in the next three months over and above the budget announced last October, "the most ambitious one we ever had."

The ministry is expecting to see an increase in demand for local products and more liquidity for business and citizens alike which will, in turn, increase people's confidence  and get the economic wheels turning once again.

Turning his focus on the small and medium enterprises (SMEs) and self- employed, he said that most of the weight is felt by these businesses as they form a large percentage of Malta's economy. "Thus, we want to reduce their financial burden and get them to a point where they will no longer need to rely on the state."

He explained that the government will be helping every SME and self-employed with a record amount of €18,000 each. Notably, this is the average amount of financial aid as there are some businesses which will be getting more help than others where needed.

This amount has been calculated through the number of initiatives that where included in last Monday's mini-budget announcement.

This includes the supplementary payment scheme which over 20,000 businesses are benefitting from and will amount to €91 million in cost. Any businesses with an average of five or six employees will be benefitting from €4,550 per month.

There is also the restart grant which will help businesses with rent fees and other expenses which amount €50 million, as every business will be benefitting from €2,500 in this financial aid.

These businesses will also experience a 50% payment reduction in utility bills which amounts to another €30 million, with each business saving €1,500 each.

Commercial businesses that have applied for a one-year license, over 12,000, will have that license removed and their payment of €415 for the license refunded as the government does not think it is fair on them since the pandemic brought about challenges with it.

Additionally, Tax credits received as part of the Malta Enterprise micro-invest scheme can now be transferred into cash grants. Up to 30% of these credits can be changed into a cash grant to a maximum of €2,000, or €2,500 if the business is based in Gozo or is led by a female entrepreneur.

The government will also be paying for any training and engineering processing that businesses look into in order to better their profits, up to a maximum of €5,000 per business.

Schembri added that with these measures, the government will be helping businesses three fold if they reopen, as each business will benefit from €8,500 between July and September in restart grants, a utility bill reduction and the wage supplement, while those businesses that have a license will benefit from a further €2,000. Additionally, those who invest in training and engineering processing will be getting an average financial aid of €18,000.

"This shows how the government will be rewarding all businesses that will reopen. I urged all businesses to apply for the schemes through the Malta Enterprise once they are out," he concluded.



 

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