Government Aid Financial package: the contents are different from the label – MEA

In its reaction to the financial measures announced by government to help business cope with the Coronavirus outbreak, the Malta Employers’ Association stated that while the figure of €1.8bn sounds impressive from a public relations perspective, the contents of the package are different from the label and will cost government significantly less than the amount stated.

Although the package does contain measures that do address the hardship that many companies are facing during this crisis, it falls short of what is necessary to keep the ship afloat, and the incentives will, in many cases, be insufficient to curb the onset of layoffs in many firms.

The bulk of the package is a deferment – not cancellation – of VAT and Social Security payments and loan guarantees. The impetus should have been more on wage subsidisation, rather than liquidity. This would have been more effective to protect jobs in the private sector.

Together with the other employer bodies, MEA had submitted concrete proposals to address the situation more effectively. Other measures that could be introduced are related to training, that is full refund of wages and training costs, including online training for a specified period.

The package does have positive aspects, such as the assistance which is also extended to the self-employed and to parents who cannot telework.

On quarantine leave, the €350 grant given to employers is insufficient, and in any case employers are, in principle, against the imposition that they have to pay for such leave. Quarantine leave is a social service and social services are financed by taxes, not by employers. Although the amount announced is an improvement on the initial position, MEA will continue to strongly oppose the amendments to legal notice both because of its contents and also because of the manner in which it was introduced, which bypassed all normal channels of social dialogue.

All in all, the measures announced are a step in the right direction but fall short of covering the full scale of potential problems that are being envisaged by many businesses. It is hoped that this package will be enhanced by other measures that government may introduce in the near future.