Issue link: https://maltatoday.uberflip.com/i/1418522
16 maltatoday | TUESDAY • 12 OCTOBER 2021 BUDGET2022 Chamber of Commerce – Budget ac- knowledges present realities The Malta Chamber of Commerce, Enterprise and Industry welcomed this year's Budget. The Chamber's key proposals were also taken on board, amongst others: schemes to incentivise productive work and shift works as well as reduced tax rates for part-time and overtime work; zero tax on pensiona- ble Income for those in employment beyond retirement age; zero tax on the re-investment of profits for business op- erators; and green investments in terms of mobility and construction as well as in favour of heritage buildings and UCA properties. But Chamber said the budget did not effectively address measures aimed at the recovery of the worst hit sectors such as tourism related segments. The Chamber also said the govern- ment's short to medium terms objec- tives of achieving a deficit rate of 5.6% looks overly optimistic. "The Malta Chamber notes that the Government is forecasting the highest increase in revenue to originate from VAT receipts with estimates higher than the 2019 VAT income. This assumes continued growth in consumption and rigorous enforcement of VAT dues as well as the collection of deferred VAT payments. The Malta Chamber fully supports the Government's renewed commitment towards fiscal morality." MHRA – Investment in quality of life The Malta Hotels and Restaurants As- sociation (MHRA) noted with satisfac- tion various incentives addressing peo- ple, the environment and prosperity as was advocated in the Association's pre- budget proposals. The budget's focus on sustainable de- velopment with special emphasis on fiscal incentives for re-investment in business, and on connectivity and mar- keting of the tourism product are also commended by MHRA. Indeed, MHRA lauds the increase in the budgets for the Malta Tourism Authority and various government entities which are tasked with the upkeep and cleanliness of pub- lic spaces. "This budget is evidence of how well Malta was managed during the pandem- ic not only in safeguarding the health of our people but also in generating enough reserves to sustain business operations during unprecedented eco- nomic conditions and significantly to take forward the sustainable develop- ment of our economy and improve the quality of life for all our people - the real protagonists of a successful Malta." GWU: 'Socially bold Budget' The General Workers Union said that over 18 proposals it had submitted to the government had formed part of Budget 2022, which it dubbed socially bold. Among these proposals were the dou- ble payment on working Sundays for contractor employees; 15% overtime tax for those earning up to €10,000; and 10% on part-time work, with extended opening hours for childhood centres. "These measures will further incentivise work and a higher income for workers." "It is also rewarding to see that the con- tributory and non-contributory pension will increase, which means an increase to all pensioners. Apart from those who choose to continue working beyond re- tirement age, their pension will be dis- tinguished from any other income and excluded from any tax payment." The GWU said it was pleased to see the government addressing "the problem of mass transport" and seeing priority giv- en to the environment with free public transport, a measure it claimed would reduce private cars and air pollution. "This budget also provides for a skills census next year to identify where there are deficiencies and disproportional skills of workers. The GWU believes that following this census and analysis, the country would be better placed to direct vocational education towards its kills shortage." Chamber of SMEs: 'More disposable income, but FATF greylisting ignored' The Malta Chamber of SMEs noted a number of positive initiatives that will aim at pushing both businesses and workers forward. Addressing Malta's human resources crises, the Budget will result in rewards for those choosing to work more through in-work benefits and tax incentives. At the same time the Budget acknowl- edges the support businesses require following the pandemic in making in- vestments. The incentives welcome includes allowing the transferability of capital allowances, tax benefits on re- invested profits, financing schemes and various other schemes that encourage sustainability and moving towards clean energy amongst others. Incentives in favour of green trans- port, electrification of vehicles and sus- tainability of buildings show also a clear commitment aimed at making Malta a cleaner and more attractive country for locals and tourists alike. While the Budget further explained that work to get Malta out of the FATF greylisting status is underway and is ex- pected to yield the desired results, the GRTU said this fell short in addressing how this greylisting is affecting Maltese SMEs. ADPD: Minimum wage not address Carmel Cacopardo, chairman of AD- PD — The Green Party, said in the par- ty's first comments that a substantial part of the budget was a list of benefits that had been rolled on from predvious years. "It is good that the government is go- ing to invest in an afforestation project in the Marsaskala limits of Inwadar, near an area that the government want- ed to develop recently as a university. The government was forced by public opinion to change these plans. But on one hand it will encourage afforestation but then it is planning to take the Mar- saskala beach to convert it into yacht marina." ADPD said that while the budget of- fered several benefits, it did not directly address the outstanding problem of a decent minimum wage. "Caritas's re- peated studies show that the minimum wage must be substantially increased to be a decent living wage. During the year the European Union started a con- sultation on a Directive establishing a uniform way to calculate the minimum wage in the EU. An analysis of this Di- rective leads to similar conclusions drawn by Caritas in Malta. The min- imum wage needs to be substantially raised. The Maltese government is op- posed to all this." MEA – Pre-election Budget built on strong assumptions The MEA said the Budget had the characteristics of a pre-election budget which commits itself to increased ex- penditure, strengthening the social safe- ty net whilst softening the tax burden in certain aspects, but which provides less clarity on the revenue side of the equa- tion. "It is based on a strategy to generate economic growth through an expansion in domestic demand in the short-term through tweaking of numerous social benefits and benefits to pensioners which will increase the disposable in- come of vulnerable groups. Whilst this is socially desirable and just, it may not provide guarantees for long-term eco- nomic sustainability." The MEA said that although the ex- penditure on such assistance will be drastically reduced during 2022, it will nonetheless be a major challenge for government to reduce the budget defi- cit to the targeted levels, given that the fiscal deficit in 2021 is expected to be in excess of 12% of GDP, even if the econo- my manages to grow at a forecasted rate of 6.5%. "This is an ambitious budget that is built on strong assumptions and opti- mistic forecasts. The impact of inflation, the recovery of tourism to pre-Covid levels, together with how fast Malta can be removed from the FATF grey listing are amongst the variables that will de- termine the sustainability of our econo- my and public finances. The grey-listing certainly poses a threat to the financial services and gaming sectors, the two sectors with the highest value added in the economy." Malta Union of Teachers: 'Educators not consulted' The MUT said the Budget reflected the shortcomings of the government not in- cluding teachers in its budget consulta- tion process. "Instead of a budget with vision for the educational sector, it ig- nores the challenges in our field. As many others would agree, it is mostly notable by what has been omitted rather than what has been said," the MUT said. "The MUT feels that the government is not taking the difficulties in the educa- tional sector seriously and is not paying attention to what educators are saying. The MUT will be looking at the detailed estimates and speeches of the Ministry of Education and hopes that there will be more answers to these problems." The MUT said the budget also omits a plan to overcome a number of chal- lenges in the field: for example, the crisis of teacher shortages, which had consequences on a number of educators who received their deployment only in the last days before school began. "One would have expected that this would be at least recognised as a problem, with a plan for the coming years." Incentives to attract young people to the teaching profession were also omit- ted. "Measures to give educators the tools with which to work were left out, along with a long-term vision for the ed- ucational field that the country needs so much." Reactions to budget speech