SMEs lobby, Opposition call for equal support across all sectors amid Covid-19 crisis

Government’s third coronavirus aid package to help businesses and save jobs was met with a positive reaction from social partners, however, concerns have been raised about the lack of assistance being given to a large chunk of private sector industries

Claudio Grech, Joseph Farrugia, Abigail Mamo
Claudio Grech, Joseph Farrugia, Abigail Mamo

Government’s third coronavirus aid package to help businesses and save jobs was met with a positive reaction from social partners, however concerns have been raised about the lack of assistance being given to a large chunk of private sector industries.

Chamber of SMEs CEO Abigail Mamo and PN MP Claudio Grech told BusinessToday that while they welcomed the new measures, the government was still not offering equal support to all businesses and employees which were struggling beneath the burden of the economic impact of the coronavirus pandemic.

On Tuesday, Prime Minister Robert Abela unveiled new financial aid measures for businesses – the third package in as many weeks – which will see the 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.

However, businesses in other industries will receive considerably less assistance – a second tranche of aid will be provided for companies and sectors hit by reduced consumption, which will see the government finance only one day per week in wages, around €147.

Companies falling under this "second-tier" include those in the manufacturing, car sale, cargo handling, newspaper publishing and broadcasting sectors, all of which will be indirectly impacted by the coronavirus.

Mamo noted that, after having announced a €1.81 billion financial aid package which was widely criticised for being insufficient in terms of tangible help for businesses, the government had subsequently heeded the concerns of the social partners, albeit falling short of providing equal assistance to all workers in the private sector.

"We are glad our perseverance has borne fruit but there are more that need this help and we will continue working with the government and voicing our members’ concerns until who needs help gets it," Mamo said.

She said that the Chamber "wants to see equal support."

"If not a wage subsidy, there should be an equivalent cash injection that will give these companies the necessary liquidity, without risking any more than they are already risking, and that will help them retain their employees," she said.

Mamo said that, in addition to the cash injection for wages, the country also urgently needed a tax moratorium for businesses and their employees. "We are looking literally at all the running costs a business might have and where possible we are working on suspending these costs so that the priority would be to sustain [the company's] functioning in whatever form this is, and keep people in employment."

On his part, Grech underlined that, of around 164,000 private sector workers in Malta, the government's measures would mostly be helping 60,000 people who worked in the industries most affected by the measures put in place to curb the spread of Covid-19.

He said that the Nationalist Party was in no way criticising the assistance given to those 60,000 hospitality and related industries’ workers, and emphasised that these needed the help they were being given.

However, he said that government’s measures should apply to all those who were suffering the consequences of the pandemic – including businesses and workers having to cope with the indirect effects, such as companies providing media content, which have been hit by a drastic drop in advertising revenue.

"The government should not be selective when it comes to the different industries. [...] The measures should apply to all those who are in any way suffering the implications of the pandemic," he said.

"We need to ensure jobs are safeguarded. This is a crisis, and we will all suffer. But we must safeguard people's employment, so that when the crisis passes – and we are optimistic that this is temporary – we won't have a situation where jobs would have been lost and enterprises find it difficult to restart their operations."

Asked whether he felt the government had enough resources to help everyone, Grech said the issue wasn't a matter of a "bottomless pit."

"We are not saying the government has to do something beyond its means. But it has all the needed tools," he said, highlighting the fact that the European Central Bank and European Commission had made available liquidity facilities and funding packages to help member states survive the crisis.

'No business will end up lost' – Economy Minister

Questioned by BusinessToday on the matter, Economy Minister Silvio Schembri said the government had progressively improved its economic aid measures.

"This is a fluid situation and not all industries are going to be impacted in the same way.  Through the first measures, we sought to first protect those jobs that are most hard hit by these circumstances, such as tourism, accommodation, restaurants, rentals of motor vehicles, employment activities, travel agents, security, entertainment, service to building activities, transport, retail and personal activities (barbers, beauticians etc.)," Schembri said.

"Every time measures were announced, we came forward with an even more sustained and improved economic package, which reflect this government’s commitment to serve as a shoulder to those facing economic hardship."

He said that the government would keep up its discussions with social partners in order to offer more targeted economic assistance.

"I understand that there are more specific sectors which we need to assist.  We shall continue to discuss with constituted bodies to help with more specific tailor-made economic assistance so that no business with a wall in front of it will end up lost in this economic storm. I understand that every successful business contributed to the economy in terms of creating more wealth, jobs for our people and paid tax," he said.

"We’re constantly analysing how the situation unfolds and we shall take the necessary action to help other sectors which are asking for government support," Schembri stressed.

"We took action to help those most in need and we shall continue to reach out to those who still have more steam to go on. My duty is to see that we do whatever is required to help as many businesses as possible to brave these difficult times. Our main goal remains that of safeguarding as many jobs as possible and helping businesses preserve their structures to rebound steadily when we’re out of this storm," he added.

‘Package might need to be reviewed’

Malta Employers' Association director Joseph Farrugia told this newspaper that the latest steps the government had taken were "generally good" and addressed those sectors which had seen the highest numbers of companies buckling under the pressure of Covid-19's economic havoc.

He noted, however, that other sectors – such as manufacturing and publishing – had also been affected. "The longer the situation lasts, the more the current financial aid package might need to be revised," he said.

Farrugia, however, acknowledged that the government had to be cautious about not dividing its resources across all sectors to such an extent that each industry would end up getting insufficient help.

"If it were for me, I would give benefits to all. But we must be fair with the government and concede that if it were to pay €800 to all workers, its reserves would dry up fast," he said.

Hotels went from running a business to zero income – Tony Zahra

Asked by BusinessToday for his reaction to arguments that the hospitality sector had unfairly benefitted from government aid compared to other industries, Malta Hotels and Restaurant Association president Tony Zahra said that businesses in the sector he represented had, practically overnight, gone from doing well to generating no revenue at all.

"I represent hotels and restaurants, so I cannot speak for other sectors. We went from running a business to having zero income," he said, "The situation wasn't sustainable."

He underscored that his role was to speak up for the sector he represented. "I can't lobby for those I don't represent," he said, remarking that, from a personal perspective, some of his private businesses had not been included in the latest government aid package.

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