Second COVID vouchers scheme divides businesses

Businesses have been left in the dark as to which sectors will be able to benefit from the upcoming voucher scheme, as they quabble over distribution timing

Economy minister Silvio Schembri launching the first voucher scheme
Economy minister Silvio Schembri launching the first voucher scheme

It is as yet unclear which sectors of business will be able to benefit from the government’s second tranche of vouchers, aimed at mitigating the economic damage caused by COVID-19.

The vouchers were scheduled to be distributed at the end of January but the distribution was postponed indefintely following a recent spike in daily COVID-19 cases recorded. Economy Minister Silvio Schembri said that the ministry was in talks with the Health Department and other stakeholders to ensure that the vouchers be distributed at a time that would be in everyone’s interest.

The minister has thus far refused to explain which businesses will benefit from this second scheme.

The first round of vouchers included €80 that covered dining and accomodation. Another €20 could be spent in retail outlets that did not sell so-called essential services or goods, and were therefore forced to shut down for many weeks as part of the measures introduced to between March and June 2020 to combat the spread of coronavirus.

The second round of vouchers will now only include €60 to spend on accomodation and dining. Many had argued that the sum allocated to retail should be increased. In fact people will now receive €40 vouchers to spend on retail, but it is as yet unclear which sectors will be identified as possible benficiaries in the second scheme.

A spokesperson for the economy ministry would not give details and only said that the vouchers would be distributed “at a better time, when it would also be possible for bars, clubs and kazini to benefit”.

These outlets have been forced to shut down since the beginning of November, as a means to enforce social distancing measures.

MHRA wants vouchers by mid-February

The Malta Hotels and Restaurants Association agreed with this redistribution of the voucher allocation, albeit reluctantly.

“Of course, we would have preferred if those €80 were still destined for hotels and restaurants, but we also recognised the need to offer greater assistance to the retail sector which is also suffering amid the pandemic,” MHRA president Tony Zahra told BusinessToday. “At the end of the day, this is not the end of the world for our members.”

But wheras the MHRA might have acquiesced to a reallocation of the voucher money, it has definitely painted a target on itself by insisting that the vouchers need to be distributed as early as possible, definitely mid-February.

“We understand the concerns of people and other stakeholders who insist now is not the right time for the vouchers to be distributed, with the number of daily cases spiking in the past few day,” Zahra said. “However, once this wave related to the holidays is over and we reassess the situation, we believe we will once again be seeing a decline in the number of daily cases.”

He said if daily cases recorded return to pre-holiday levels, there should be no reason not to distribute the vouchers.

“The vouchers could make a huge difference to the cash flow of many restaurants and operators in the hospitality industry,” Zahra said. “The money currently going through the tills of many businesses at the moment is too little to sustain by businesses who have seen so little income since March.”

The MHRA’s position is at loggerheads with that of other stakeholders, mainly the Chamber of Commerce and the Association of Catering Establishments, which insist now is not the time to distribute the vouchers and that the government was correct to postpone their distribution.

Holiday fallout

Philip Fenech, deputy president of the Malta Chamber of SMEs, said these coming 10 days will be crucial in determining the full extent of the damage caused during the Christmas and New Year festivities as people got together, possibly ignoring social distancing rules.

He said that the current spike in daily COVID-19 cases could be attributed to the holidays.

“If the number of cases drops in the coming days, we could well be over the surge expected as fallout from the holidays,” he said. “Once certain we are over this fallout, then we need to examine the situation again and decide how to proceed.”

Fenech said it definitely does not make sense to distribute the vouchers at a time when the number of cases has risen to over 200 daily. Most people will still be wary of going out to enjoy themselves at a time like the present, he said.

It is also imperative, he said, that the distribution of the vouchers be timed in such a way so as to assist as broad a spectrum of business sectors as possible.

“It would be highly unjust of the vouchers were distributed at a time when clubs, discos and nightclubs, bars and kazini are closed,” Fenech said. “Everyone needs to be in a position to benefit from the scheme.”

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