25 November 2004

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Mixed reactions to Budget 2005

Rosanne Galea – Malta Association Women in Business
“The increase in Lm1.75 per week across the board that together with the 17 per cent surcharge on electricity bills will further erode the competitiveness of the Maltese economic players, especially in view of the recent tax decreases seen across Europe. The loss of holidays that fall on a weekend partially compensates for this loss of competitivity and is a tentative step in the right direction. While it is positively noted that investment related to Internet related IT infrastructure is being viewed as a crucial element for strengthening economic Maltese competitivity on the international market, it is felt that more effort could have been made in this direction. It can only be viewed with satisfaction the one-year tax exemption that is aimed to encourage women workers to return to the work place after a number of years’ absence. All in all this budget will further increase the pressure on cash flow of the micro and small operators of the Maltese economy.”

Claudine Cassar – Director, Alert Communications
“I have mixed reactions. As an employer in an information technology SME, what is positive are the research incentives, and the four days leave, as well as the Lm1.8 million which is being accorded to the Business Promotion Act. On the negative side, with SMEs like ours who look abroad for opportunities since Malta has a limited market, the Lm10 extra on departure tax is quite a large increase in our expenses, when considering an annual thirty to forty business trips, which are indeed necessary. Also worrying is the 17 per cent surcharge on water and electricity, which added to the already phenomenal costs in electricity is once again, a very worrying issue for both employer and those households which are not well-off. As ‘man-in-the-street’, I would be upset. As a mother, I say the tax exemptions for those returning to the labour force after five years are very encouraging.”

Wenzu Mintoff
“Gonzi promised he would be taking decisions on matters which have long been brewing, especially where education and health is concerned, and pensions. I think Gonzi’s white paper is an illusion that attempts to have people think they are being given options to choose from by showing them the worst-case scenario. Coupled with the lack of professionalism which saw the Budget being late for presentation, I believe many measures will be taken in between one budget and another.”

Profs Edward Scicluna – former MCESD Chairman
“The language of the budget is in the right direction, and the medium-term programme for the future should have their effects with the reforms. As for competitiveness, I don’t think the impact of the four days leave will not be as effective, given that it has been counterbalanced by the increases of the eco-tax and other expenses such as water and electricity – the effect will certainly be watered down. The four days are effective for the private sector, but has questionable effects for the public sector. What unions offered in the social pact, through the use of bonuses, ironically would have had a better impact, but these were refused by the employers.”

Michael Zammit Tabona – Hotelier
“With added costs such as those of the surcharge on water and electricity, this will affect the end-price for tourists and as a whole it is detrimental to the tourism industry. A clever government would have singled out specific growth industries which do not need any more burdens and extra costs.”

Harry Vassallo – Chairperson, Alternattiva Demokratika
“The government has been obliged to face reality – what is certain is that Malta has the slowest growth rate in the European Union. Now it is obliged to proceed with its Euro convergence plan which means it will have to sacrifice economic growth to just 1.5 per cent in 2005, when the EU’s growth rate will be three to four per cent, because Malta has a high deficit so reinvestment and economic stimulation is not an option for this government. We are sceptical of achieving such targets since these are mostly arrears with nothing positive for the years to come.
“It was disappointing that government has failed to address tax evasion and insisted on measures such as 33 per cent on public transport fares without establishing any clear reward for users. It is positive to note that bio-diesel will have an advantage now on fossil diesel because kerosene has increased, hopefully reducing pollution. It is very clear however, that this government has no environmental policy to speak of and all its initiatives are EU-directed: if we had not joined the EU, not only we would not have funds for infrastructural projects but not even a vision.”

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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