Coronavirus: Abela announces third set of financial incentives

Tourism industry employees to receive €800 contribution per month • Employees in other sectors to receive only €147 monthly • Prime Minister insists ‘now is not the time’ for windfall tax on big profits • PN spokesman says new incentives will only seriously help 60,000 of 164,000 private sector employees

Prime Minister Robert Abela
Prime Minister Robert Abela

The improved package of direct aid will see government finance a full five-day work week at a minimum of €800 per month for all workers and self-employed in critical sectors that were decimated by the coronavirus measures.

These critical sectors include hotels, restaurants, certain retail outlets, travel agencies, transport operators, entertainment, barbers, beauticians and hairdressers. All activities hit by forced closure as a result of public health measures will benefit from this scheme.

This measure will cost government €44 million per month.

Employers guarantee minimum top-up

However, it was agreed at the MCESD that employers will guarantee a minimum top-up of €400 per month per employee to ensure that employees receive a minimum of €1,200 per month.

Employers that cannot afford the top-up will have to obtain permission from the Director of Labour.

Nothing prevents employers from giving more than the agreed minimum top-up.

Some companies will receive one-day wage

A second tranche of aid will be provided for companies and sectors hit by reduced consumption, which will see the government finance one day per week in wages, based on a monthly pay of €800. The cover may increase to two days over time.

Gozitan companies and the self-employed will have two days covered immediately. Those self-employed who employ people with them, will be entitled to three days of cover.

The companies in this category include those in manufacturing, some retail outlets and the information sector.

This measure will cost government €17 million per month.

The full list of companies/self-employed and the schemes applicable to them will be released next week and will be communicated through Malta Enterprise.

Forced leave

The aid package unveiled tonight retains the €800-per-month benefit for a parent that has to stay at home because schools have closed. This benefit applies to people where both parents work in the private sector.

This alone will cost government €9.5 million per month.

The package also includes an €800 per month benefit for disabled people who work in the private sector but choose to stay at home.
This will cost €1 million per month.

Anybody who had his job terminated since 9 March because of the coronavirus crisis will receive an unemployment benefit of €800 per month.

Public sector employees

Government officials who gave the media a briefing before the Prime Minister’s address, said government had no intention of cutting wages in the public sector and its agencies.

However, cost-saving measures such as reducing overtime were being implemented.

Tax deferrals

All income tax, national insurance and VAT contributions due by companies and self-employed individuals will be deferred – a measure that will cost public coffers €700 million in forfeited revenue.

Government will also put up €900 million in guarantees to enable businesses to access bank finance.

Debt up by 8%

The measures announced tonight will be sustained for three months but can be reviewed depending on how the situation develops.

The package means that government will have to loan more than €1 billion to cover the full cost. This will cause public debt to increase by about 8%.

Government anticipates that the debt-to-GDP ratio will still be less than 50%, giving it enough fire power to increase the aid package at a later stage if the situation does not improve.

PN: New incentives treating many workers as ‘second-class’

Reacting on social media immediately after the new financial package was revealed, Opposition spokesman Claudio Grech said the new incentives woould only be seriously helping 60,000 out of 164,000 employees in the private sector.

“He’s treating the other workers as second-class,” Grech wrote.

“Abela is making a very big mistake in ignoring those sectors 1try’s economic growth.”

MHRA welcomes incentives

The Malta Hotels and Restaurants Association (MHRA) welcomed the measures, saying it believed they would help the tourism and hospitality sector weather the storm.

“This follows continuous and persistent representation from MHRA that the grant of €320 towards the cost of wages was simply not enough and had to be reviewed significantly upwards,” MHRA President Tony Zahra said.

“We are satisfied that our calls to Government for review have been heard by Government and that was ready to go back to the drawing board with us to ensure the welfare of the economy.”

Government will fork out €61 million per month to finance wages in sectors hard-hit by the coronavirus and €10.5 million to sustain workers forced to take leave.

A new economic aid package was unveiled yesterday evening by Prime Minister Robert Abela after agreement was reached with unions and employers during a meeting of the Malta Council for Economic and Social Development.

But while, under the new measures, the government will be paying €800 monthly to employees in the tourism and related industries, workers in other sectors will only receive €147 per month.


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