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BUDGET 2019 maltatoday | TUESDAY • 23 OCTOBER 2018 16 Chamber of Commerce – More competitiveness needed The Chamber noted that the Budget for 2019 was set against a backdrop of an economy that is performing well. "All in all, the Chamber is pleased to note that several of its recommenda- tions have, in fact, been included in the Budget Speech." The Chamber welcomes measures announced in the strengthening of national structures and administra- tive units responsible for border con- trols and market surveillance. The Chamber has been advocating such enhancements for several years The Chamber noted that its calls for government not to introduce any surprise measures and new taxes were largely heeded. "This is to the advantage of business momentum. The main new measure announced this year in this regard, relates to the introduction of a de- posit and refund system on beverage containers. The Chamber looks for- ward to further consultations with the authorities." New measures called for by the Chamber aimed at enhancing the na- tional action plan for entrepreneur- ship were welcomed, particularly those announced in the area of sup- port for start-ups. The Chamber was also pleased to note the setting up of new entities that will serve to promote Malta's efforts in lucrative and innovative sectors such as fintech, blockchain, artificial intelligence and internet of things. Another Budget measure resulting from one of its proposals with re- spect to active labour market meas- ures was to enhance the availabilit y of skills in the economy. In this respect, it noted the match- ing of fiscal incentives for persons employed in the public sector as had been made available for private sec- tor employees to postpone their re- tirement. The Chamber reiterated its position that discussions with the employer bodies remain ongoing with a view to ensure that the final effect of the additional days off measure is cost- neutral to employers. In line with the investment of €700m in the country's road network over the coming seven-year span an- nounced last year, the Chamber said it looks forward to contributing its recommendations on transport in an effort to solve the congestion prob- lem that is costing the environment as well as businesses and citizens dearly. GWU – Positive budget The General Workers Union said Budget 2019 ref lected the govern- ment's economic success, and toast- ed its outlook towards social justice. "These measures strengthen people's standard of living especially the most vulnerable in society, but also the middle class. Various measures will leave more money in people's pock- ets." The GWU said the increases in pensions, social benefits, increase in benefits for people with disability, the increase in children's allowance, extension of free public transport, work benefit for disciplined forces, extension of first- and second-home schemes, were all a ref lection of eco- nomic expansion. The GWU said the Budget was in line with requests by the GWU to en- sure better help for citizens, especial- ly in terms of housing, social housing, and the rental market. "We are satisfied that the govern- ment kept its word on another public holiday leave day being returned to workers… this was a positive Budget." MUT – Budget ignores priorities The Malta Union of Teachers said that Budget 2019 was a continuation of the government's current work pro- gramme in education, with the con- tinuation of measures to strengthen the sector. These include new opportunities in the secondary school system, a strengthening of language teaching, apprenticeships, and strengthening the link between secondary and post- secondary education. The Budget also included a reference to pedagogical training for educators and the possibility of training for sup- ply teaching grades to move up to reg- ular grades, as well as free MATSEC exams in a continuation of last year's measures. However the MUT said the Budget made no reference to serious problems inside the educational sector, among them the lack of teachers. "The Budg- et does not include any investment for youths to choose the profession of teaching, and there is no reference to any aid for non-state schools to keep offering the best of services. "This Budget does not address the problem of security in schools. It is disappointing for MUT because it looks like there is no attention giv- en to these serious incidents which schools have experienced in recent years. The MUT hopes that the edu- cation ministry offers a better reply to these problems in its detailed finan- cial estimates." GRTU – Positive but lacks creativity The Chamber of SMEs said Budget 2019 would affect SMEs positively on four particular points: an increase in salaries and benefits, that would ul- timately put more money in people's pockets to spend; self-employed peo- ple will be granted the right to claim unemployment benefits; an increase in subsidy to small businesses to be able to invest in a third pillar pension; an extension of the scheme for the transfer of family businesses to save tax now down from 5% to 1.5%. "With a strong economy and sur- plus, small businesses expected a sub- stantial decrease in tax, a reduction in taxation to address the advantages reaped by foreign businesses; we ex- pected the extension of the Microin- vest for businesses to claim a refund on the investment they make; and ini- tiative to address the serious problem of workers' shortage." The GRTU said that while it was satisfied that various initiatives were rolled over from the previous year, there have been a "serious lack" of new ideas to incentivise SMEs. MHRA – Improved quality of life MHRA welcomed news that Air Malta has successfully registered positive results in performance and its growth prospects are encouraging. "Specifically, MHRA notes the vision being set for Air Malta as the Airline for the Mediterranean. An overall ex- pansionary strategy that incorporates development of new routes and new airlines. These growth prospects are supported by the substantial increase in MTA's budget from €55 million to €72 million." The MHRA commended an inten- tion to maximise the collection of the eco contribution which will further help improve the tourism product through embellishment initiatives. Marsaxlokk, Birzebbugia, Xlendi, Gzira and Msida promenades also got a special mention for embellishment. MHRA feels that other important tourism zones like Bugibba and the Northern part of the island, must also be considered. "The coast remains a very important component of the tourism product, and the announced beach develop- ment projects for both existing and proposed new beaches, will contrib- ute to improving the tourism offer," MHRA said. The MHRA welcomed measures to improve safety and security of the is- lands, and called for stricter enforce- ment of regulations to secure a level playing field among the operators in the sector. "We consider the various measures announced in the Budget 2019, to be favourable and will contribute posi- tively to sustain further economic growth in the year to come. MHRA reiterates that growth prospects have to be supported by a long term, ho- listic and sustainable plan, based on quality and socio-economic benefits for the country." MEA – Longer- term vision required The Malta Employers Association said the Budget ref lected the rapid growth being experienced by the Mal- tese economy, with good measures aimed at vulnerable groups, most no- tably pensioners. "It remains to be seen whether these measures will improve the purchas- ing power and quality of life of this growing segment. The Budget also seeks to spread a number of focused benefits that target low income fami- lies. Perhaps the Budget should have projected a more concrete vision for a sustainable economy over a number of years." The MEA said the current pressure on wages due to a shortage of numer- ous skills in the labour force, together with the cost of additional optional leave days may result in a wage price spiral as companies will seek – where possible – to shift the added costs on consumers both business and final consumers. "Thus, increased inf lation - project- ed to increase to 1.9% in 2019 - caused by cost push factors carries the danger of eroding profitability and competi- tiveness, particularly in sectors which are price sensitive, such as export ori- ented manufacturing and tourism." The MEA has also cautioned against growth which is the result of a sudden increase in population, adding that this required a comprehensive strat- egy to cater for the socio-economic impact of such a phenomenon, in- cluding investment in the necessary physical and social infrastructure to make such growth sustainable. "The domestic labour market can generate three thousand jobs per an- num, but the demand for labour is in the region of eleven thousand, thus the deficit can only be addressed through the importation of labour. The one-day increase in optional leave will certainly have an impact on productivit y and the Association still believes this was unnecessary, given that Malta already has among the highest number of days of op- tional leave and public holidays." REACTIONS TO BUDGET SPEECH