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

As expected, there was a mixed reaction to the budget for 2020 presented by Finance Minister Edward Scicluna on Monday. While unions welcomed certain measures, one sticking point for a number of them seemed to be the lack of action by the government to tackle the teacher shortage.

A budget of contradictions Alternattiva Demokratika

Alternattiva Demokratika – The Green Party chairperson Carmel Cacopardo issued the following reaction to Budget 2020 speech:

“As expected, the government is strengthening various social benefits, including pensions. These affect, in particular, 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 may reflect 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,” he said.

Turning to environmentally friendly measures, Cacopardo said that the 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 As an additional bonus payable to every citizen, had it been serious, it would have immediately withdrawn all operating licences of fuel stations which have not been in operation for some time.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.”

“The 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 the 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 the government to declare the need to protect the environment but then dishes out incentives of all sorts to encourage the property market.”

Budget continues to build on past successes - MHRA

The 2020 Budget is a consolidation budget which keeps building on the economic principles established over the years, the MHRA said. “Budget 2020 is also a budget with a heavy environmental spin. Indeed, the proposed actions bring along challenges for MHRA members, among others, due to changes which will impact current operations; however, we believe it is a step in the right direction. From a social perspective, Budget 2020 is one 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. The MHRA commends the government’s concrete initiatives to further refine and embellish the tourism product and further spread among the many the benefits generated from this important economic sector.”

Sustainability, however, remains the name of the game and the MHRA considers it imperative that the government launches its vision 2025. “Limiting factors such as human resources need to be taken into consideration in this vision 2025. The MHRA has for too long called on the 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.”

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

The national budget presented for 2020 is a reflection of strong macro-economic stability, resulting from a budget surplus over the past few years, the Malta Employers Association (MEA) said.

“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 measures 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, the MEA said.

“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.”

“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 longterm 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.”

Another situation that needs to be addressed is the reputational damage Malta is suffering from due to the bad publicity caused by numerous scandals, the MEA said.

“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.

The 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 secondtime 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 the 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 firsttime buyers that is exempt from stamp duty. This will continue to help all those who decide to invest in their first home.”

The MDA is also very satisfied to note the reduction on duty from 35 to 15 per cent on contracts when property rights are ceded (ċessjoni). The association said that it is convinced that the implementation by government of these measures 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.”

Teacher shortage? - UPE

The Union of Professional Educators (UPE) said that it is pleased to see that the 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 practising within the educational system. Thus we feel that it would have been wiser if the government had 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 infrastructural investments in schools were included.

“Instead, the budget speech focused on 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 parttimers, the “limited” budget did not address pending problems faced by its members.

This union group also highlighted that 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.

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 bringing 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. The GWU welcomed environment-friendly measures and said the Budget was continuing to distribute the national wealth among the people.”

U}M-Voice of the Workers

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