A bud­get aimed at re­liev­ing the lower classes – MEA

Malta Independent - - NEWS -

The Malta Em­ploy­ers’ As­so­ci­a­tion stated that the main thrust of the na­tional bud­get 2017 is to al­le­vi­ate the hard­ships faced by low in­come seg­ments, namely sin­gle par­ent fam­i­lies, pen­sion­ers and min­i­mum wage earn­ers with­out adding sub­stan­tial bur­dens on em­ploy­ers.

Mea­sures such as the in­crease in sup­ple­men­tary in­come, carer’s al­lowances, rent sub­si­dies and re­vised thresh­olds for the ta­per­ing of ben­e­fits are fo­cused on vul­ner­a­ble groups. In this re­spect it is a pos­i­tive bud­get.

The MEA is crit­i­cal of the man­ner in which the COLA mech­a­nism was tam­pered with, as gov­ern­ment has re­sorted to re­peat a prece­dent cre­ated by the pre­vi­ous ad­min­is­tra­tion by award­ing a COLA in­crease which is higher than the €1.25 which should have been the COLA in­crease for 2017.

An­other ma­jor short­com­ing of the bud­get is that the com­mer­cial en­ergy rates were not re­vised down­wards to make th­ese rates in Malta on a par with those pre­vail­ing in many in­dus­tri­alised coun­tries. Given the state of in­ter­na­tional oil prices, the cheap en­ergy gen­er­ated by the in­ter­con­nec­tor and the po­ten­tial ben­e­fits of the new power sta­tion, this was a doable mea­sure.

The cur­rent com­mer­cial en­ergy rates could cre­ate a se­ri­ous com­pet­i­tive dis­ad­van­tage to many com­pa­nies, par­tic­u­larly in the man­u­fac­tur­ing sec­tor.

The bud­get does not ad­e­quately ad­dress the sit­u­a­tion at Air Malta, nor does it of­fer tan­gi­ble so­lu­tions to the traf­fic sit­u­a­tion, with the ex­cep­tion of the in­cen­tives for com­pany trans­port.

The taxes on a num­ber of prod­ucts, in­clud­ing con­struc­tion ma­te­rial, de­ter­gents and toi­letries will have an ad­verse ef­fect on some busi­nesses and con­sumers in gen­eral.

Al­though the bud­get is lack­ing in a longer term vi­sion for the econ­omy, it does in­clude some mea­sures with fu­ture im­pli­ca­tions, amongst them the in­cen­tives for vol­un­tary sec­ond pil­lar pen­sions, in­cen­tives for a wider dif­fu­sion of so­lar en­ergy through so­lar bonds, and the study for the gas pipe­line.

Fun­da­men­tally, the bud­get is a state­ment about the state of cur­rent and pro­jected gov­ern­ment fi­nances, and the fact that the deficit is pro­jected to de­crease to 0.5% in 2017, with a cor­re­spond­ing fall in the GDP/na­tional debt ra­tio to 63% is pos­i­tive in it­self and a di­rec­tion that should be main­tained in the fu­ture.

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