The Malta Independent 21 January 2021, Thursday

Business representatives say new wage supplement scheme promotes fairness

Karl Azzopardi Thursday, 7 January 2021, 08:52 Last update: about 13 days ago

The new wage supplement scheme promotes more fairness, representatives of the business sector told to The Malta Independent, noting that the future for businesses depends on the vaccine’s rollout, investment in businesses and the restructuring of Malta’s economy.

On Tuesday, the new wage supplement scheme was announced. It removed the previous Annex system and introduced a tiered system for the supplement based on businesses’ VAT returns by comparing 2019 and 2020 results.

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This move has received positive feedback from representatives of the business sector – namely President of the Malta Hotels and Restaurants Association (MHRA) Tony Zahra, CEO of the Malta Chamber of SMEs Abigail Mamo and President of the Chamber of Commerce David Xuereb.

All representatives agree that the new scheme promotes more fairness across the board as it is based on a more holistic system wherein those who need the most help will be better recognized, while those businesses that actually did better during the pandemic will not receive the supplement.

“At the end of the day, assistance should be provided to those who need it the most,” Zahra told this newsroom, noting that all of the Association’s members had already been consulted on this new system and reacted positively.

Mamo reciprocated this sentiment, saying that, in principle, the new scheme is a positive change as it shows that Malta has learned from and improved on previous experiences.

“However, the devil is in the detail which can only be seen in practice and our members have some uncertainties as to how it will be implemented and how it will impact them. But there have not been any bad reactions.”

From his end, Xuereb explained that the Chamber of Commerce had already brought up the argument on helping businesses depending on how badly the pandemic was affecting that particular business.

“Now it is no longer about having long arguments over which sectors belong in which Annex; it is a true measure of performance which we are pleased with.”

All three representatives also mentioned their satisfaction with the government recognising and providing wage subsidies for employees that are hired to replace employees that left during the pandemic. This was not being done in the previous system, as employers were not being given a subsidy for any replacements they hire to take over the jobs of previous employees.

Future measures and support

The Malta Independent also asked each representative if they envisage the need for any future measures that would help businesses even more as Malta makes its way to recovery in the coming months.

MHRA President Zahra said that the situation is what it is, and everything now depends on the vaccine's rollout.

"What we need is for the vaccine to work and the quicker it does, the quicker we will get out of this problem. It is good to encourage people to use our member's services and the vouchers are a plus, but our survival depends on the vaccine as this will bring more tourists back to Malta."

He also believes that more focus should be put on Destination Malta, as Andre Bocelli's musical performance is already doing. "This will benefit the country as a whole since Malta needs endorsements from such globally renowned individuals, promoting our country as an ideal place to visit, be it for business or relaxation."

Vice-President Mamo spoke of the need for the wage supplement to be extended beyond March as businesses need a longer period in order to overcome the insecurities the pandemic created.

“The government told us that considering the scenario we are working in, it cannot commit to anything further than March, but we are already discussing what will happen beyond March as certain sectors like tourism need to plan ahead.”

She also noted that there is a need for more aggressive schemes that encourage businesses to restructure. “Businesses have a lot of debt piling up, and at the same time we are telling them to reinvest and reinvent themselves, but they will need much more support to do so.”

Additionally, she encouraged the government to inform businesses about its plans to restructure the economy so that it would no longer be as dependent on tourism.

Chamber of Commerce President Xuereb also noted the importance of restructuring Malta’s economy saying that, while the government did well to focus on the preservation of employment, the point of focus must now shift to help businesses grow.

“We cannot talk about preservation anymore. We are now at a stage where action needs to be taken and where we need to explore new economic sectors driven by digitalisation, talent, quality of life and climate change. That is where we need to be.”

He explained that what gives Malta its competitive edge in this regard is its size; “we are nimble, and we can be efficient and therefore are able to implement change better than other countries. Let us hope that we do not lose out on this opportunity.”

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