Issue link: https://maltatoday.uberflip.com/i/1526615
5 gozotoday | FRIDAY • 13 SEPTEMBER 2024 NEWS 2025 BUDGET PROPOSALS GRDA focuses on eco-contribution revenues, fiscal incentives for staff training and changes to Local Plans CONTINUED FROM PAGE 1 The GRDA said that its pro- posals reflect important consid- erations and look at the Gozitan dimension from a long-term perspective and in line with the GRDA role in contributing to the socio-economic development of Gozo. The GRDA positively acknowl- edged that its proposal entitled 'better targeting and alignment of the stamp-duty reduction on residential property in Gozo' that feature in the GRDA proposals over the past last two years has been taken into consideration in the Budget Speech for 2024 and was fully implemented in Febru- ary 2024. Ringfencing of revenue from the tourism eco-contribution to Gozo The GRDA strongly advocates a more mature and extended re- gional approach to decision mak- ing. The use of some type of reve- nue in the region of its generation is a practical way to implement a more de- centralised and regional approach. Ensuring that the revenue col- lected is reinvested in the eco- nomic activity that has been singled out to be taxed ensures legitimacy and acceptance by the operators. Thus, the GRDA has once again proposed that revenue generat- ed from the eco-contribution in Gozo should be ringfenced to be used for the upgrading of the tourism product and infrastruc- ture of Gozo. Review of training fiscal incentives Gozo has a significant presence of microenterprises, with around half of the businesses on the is- land employing fewer than nine people. This creates a vulnerability within the business ecosystem, especially during periods of change. Microenterprises face various challenges in upskilling and reskilling their workforce due to the inverse relationship between company size and em- ployee participation rates in learning opportunities. Limited resources and training difficulties exacerbate this problem, leaving both employees and businesses in Gozo highly vulnerable. To tackle the major barrier of time investment that hampers skills development for microen- terprises, the GRDA proposed a review of the current training fis- cal incentives targeted for train- ing and upskilling of workers. Recognising the significant presence of microenterprises in Gozo and their inherent limita- tions in reskilling and upskilling their workforce, the GRDA sug- gested that training fiscal incen- tives for Gozo should cover not only training costs but also com- pensate for the productive loss experienced by employees while participating in training. Crucially, this should be accom- plished without requiring em- ployees to undergo training out- side of paid working hours. Changes in Local Plans for Government Housing Estates In line with its vision of Gozo as an 'Island of Villages', the GRDA recommended preserving Gozo's distinctive urban character by protecting certain zones within the island's built environment. This recommendation stems from the recognition that certain areas are characterised by unique design, that exhibit harmony and coherence, which merit distinc- tive recognition and protection. More specifically, the GRDA is proposing changes in the local plans for areas which form part of what are commonly known as Government Housing Estates. These zones are overwhelming characterised by rows of terraced houses, with their height in good proportion when compared to street width. These ratios and proportions give rise to streetscapes and sky- lines that fully respects the con- cept of a 'Island of Villages'. Changes in the local plans for these zones will ensure that the existing height and streetscapes are retained. The GRDA strong- ly believes that this represents a positive step in line with Gozo Regional Development Strategy. Economic outlook During 2023, activities in Gozo continued to expand resulting in economic growth. According to the Gozo Business Sentiment issued in June 2024 business conditions remained positive with almost 90% of enterpris- es reported either stable or im- proved business conditions over the period under consideration. This is expected to continue over the coming months, with 90% of businesses expecting their busi- ness conditions to remain either unchanged or to improve. This sentiment is confirmed by the latest projections produced by the GRDA in collaboration with Oxford Economics.It is expected that Gozo's real Gross Domestic Product (GDP) increases by 3.8% in 2024. This envisaged growth is large- ly driven by an expected increase in tourism activity and strong domestic consumption. Beyond 2024, the Gozitan economy is set to continue to grow further how- ever at a slightly more moderate pace. The growth is expected to be driven by strong tourism in- flows and further outlays on pub- lic investment. Notably, infrastructural under- takings including but not limited to those financed through the Sustainable Urban Development Fund, are set to contribute to this growth trajectory. From the output side, growth in 2024 is set to mainly ema- nate from the services sector. The largest expected gains as set to stem from the sectors comprising of the administra- tive, support and professional service activities. Positive con- tributions are also projected from the accommodation and food services, as well as whole- sale and retail and transport activities. Besides the services sector, the manufacturing and indus- try sector is also expected to be a positive contributor to growth in 2024 driven by ex- pected growth in manufac- turing and construction sec- tors. Going forward, over the 2025- 2026 projection horizon, growth is set to be broad based, predominantly from the servic- es sector and to a lesser extent manufacturing. Within the services sectors, the envisaged growth is primarily driven by accommodation and food ser- vices, administrative and sup- port services, wholesale and re- tail, as well as construction and health related activities. Labour market Gozo's labour market main- tained its strong momentum, with a steady increase in em- ployment. The buoyant labour market environment is expect- ed to persist over the projec- tion horizon as employment is set to grow by an average annual rate of 2.8% over the 2024-2026 projection horizon. This growth is largely on the back of higher employment in the services sector particularly those of administrative support and professional and technical activities. In 2024, employment is ex- pected to increase by 3.7%, in line with the insights from the latest Gozo Business Senti- ment. Over the coming years, this growth is projected to gradu- ally slow, with rates of 2.6% in 2025 and 2.1% in 2026. These forecasts also account for the tight labour market condi- tions, with the private sector frequently reporting shortages, particularly in unskilled and semi-skilled workers The Malta Tourism Strategy 2021-2030 states that the Island should continue building on its distinctiveness and embracing the principles of climate friendly tourism (Photo: Peter Avramoski/Unsplash) The GRDA recommends preserving Gozo's distinctive urban character by protecting certain zones within the island's built environment