Issue link: https://maltatoday.uberflip.com/i/739617
15 Budget 2017 maltatoday, TUESDAY, 18 OCTOBER 2016 REACTIONS GRTU: 'Economic progress starts spreading' THE positive growth being expe- rienced by our economy has pro- duced wealth giving rise to the possibility of spreading economic benefits across sectors, the GRTU said, but warned that continuous tangible incentives and measures were necessary in the implemen- tation phase to ensure that the positive economic results are not only achieved but sustained. GRTU said that direct fiscal measures targeted at wider sec- tors such as pensioners and those on minimum wage are expected to increase disposable income to generate economic benefit across the board. GRTU's calls and proposals for immediate solutions to the traf- fic crisis also led to a number of commitments and measures in this Budget. "Private collective transport is being incentivised by tax deductions to employers that organise free transport for their employees and large government entities are to provide transport for their own. The urgent need to give a full focus on the Kap- para Junction Project to increase the rate of work drastically in order to reduce the negative im- pact of the length of the project seems to have been heard with a renewed commitment. Incentives to increase parking areas through Projects Malta and Planning Au- thority proposals to attract pub- lic car parks also echo GRTU pro- posals to solve the traffic crisis. Measures addressing organised school transport which are key for imminent improvement have unfortunately been left out." But the GRTU said it failed to understand how yet for another year, possible savings to business by reduction of energy bills has not been transcended to boost the economy. "Following last year's call by GRTU to decrease utility tariffs, one of GRTU's main pro- posals was that of opening up the energy market to more operators in a bid to increase competition and reducing cost to businesses. Renewable energy initiatives such as the PV Farm project have al- ways been advocated by the GR- TU and is once again welcomed as it is being committed to in the Budget. It is however the second year to see this proposal in the Budget and now GRTU awaits immediate implementation." The GRTU welcomed the re- moval of "senseless compulsory audits" for micro-SMEs. "This is the very first time this concept has been introduced in Malta. This incentive is however only tied to post-graduate start- ups and should definitely be ex- tended to all start-ups if we want all youths to feel empowered on an equal level and not discrimi- nate between business ideas based on educational attainment. " It also said the positive results of decreasing unemployment rates have led to human resources evidently becoming more of a key growing concern to employers across the majority of sectors. GRTU's proposal for a mandato- ry pension for self-employed with voluntary opt-outs also resulted in voluntary pension incentives for employers and their employ- ees. "In GRTU's opinion this is a positive step yet the take-up is expected to be weaker than that of the original GRTU proposal." The GRTU welcomed the meas- ure for family business transfer stamp duty to be reduced from 5% to 1.5% from parent to child is a tangible implementation of the Family Business Act concept. GR- TU however asks why this is only being launched for 12 months where such timeframe does not allow for planning and execution. Malta Employers Association disappointed: no energy cuts MEA president Joseph Farrugia said the association had been ex- pecting a reduction in the cost of electricit y and criticised the gov- ernment's decision to meddle with the mechanism establishing the cost of living adjustment It was a pit y that the budget did not include any reductions in the cost of electricit y, 'despite the cost of fuel being what it is', Farrugia, president of the Malta Employers Association, said. Farrugia also criticised the fact that the government had decided to meddle with the cost of living adjustment, raising it to €1.75 per week in next year's budget, Farrugia told MaltaToday that while it was true that the increase to the COLA would be absorbed in the coming years, the govern- ment should not have ignored the mechanism agreed upon by all so- cial partners. The COLA was actually calculat- ed at €1.16 and the difference will be deducted from increases given in the coming years. Farrugia said this budget was ob- viously one aimed at easing social burdens and did not include many measures aimed particularly at employers. "It seems as though the govern- ment this year, because of the low unemployment and strong mac- ro-economic indicators, focused mainly on addressing the issue of povert y." "However we were pleased to see measures such as that for trans- port provided by companies in- cluded," he said. Chamber of Commerce says budget acknowledges private sector's role in economy IN its reaction to the 2017 budget, the Malta Chamber of Commerce, Enterprise and Industry noted that it continued to build on previous years' efforts in a number of areas including income support for low and middle-income earners and pensioners, further investment in human resources, environmental initiatives and transport infra- structure. The Chamber also noted that, save for certain excise tax meas- ures, the budget speech had spared major surprises and shocks on pri- vate economic operators. It said it was encouraged by the remarkable rate of economic ex- pansion over the past quarters and the manner in which this is sup- porting public finance consolida- tion. The 0.7% deficit to GDP ratio for 2016 and 0.5% ratio for 2017 was encouraging, but as credit rating agencies had consistently remarked, the country must not allow for any complacency and must at all costs ensure that there are no slippages in at least three areas: public finances, continued reformed programmes and part- nerships with the private sector. The Chamber welcomed efforts being made in the area of competi- tiveness, particularly the access to finance via the seed-capital for set- ting up of the Development Bank, tax incentives on dividends from companies listed on the Malta Stock Exchange and tax deductions for employers offering transport to their workers. Tax incentives on transfer of fam- ily businesses, the attraction of an international accelerator for local start-up companies, a proposal to support companies to facilitate the research and commercialisation of innovative products and ser- vices, the introduction of permit- ting (planning) fees applicable to industry, and the simplification of licencing and start-up procedures for business were also welcomed by the Chamber. The Chamber said that €1.75 cost of living increase was not unafford- able for employers but renewed its call for adjustments to the COLA mechanism in terms of the formula used and an updating of the Re- tail Price Index through a revised Household Budgetary Survey. It said it was also disappointed to note that that there were no meas- ures to address the further lower- ing of energy tariffs for business, which was the Chamber's prime recommendation prior to this year's Budget. "It is feared that this fact may support further erosion in Malta's competitive position in cost-sen- sitive sectors relative to other re- gions and states." MHRA welcomes Budget 2017 as 'ensuring shared value' THE Malta Hotels and Restaurants Association has welcomed Budget 2017 as one that focuses on lower income earners and pensioners. "This is in line with our pre- budget theme of 'Creating Shared Value'," the MHRA said, adding that it was pleased with the number of measures that directly support the tourism sector. These include investment to fur- ther support the sustainable growth of the cruise-line business; the commencement of works on the new Institute of Tourism Studies; infrastructural investment includ- ing projects related to public parks, various embellishment initiatives and improvement in the road net- work across a number of localities including Gozo. The MHRA also welcomed the tax credit schemes for renovations in hotels and restaurants aimed at the continued improvement of the tourism product. "However MHRA was expecting specific votes for the immediate upkeep of core tourism areas, such as Bugibba and Qawra, which are in urgent need of serious investment," it said. An energy efficiency scheme which MHRA proposed for hotels and restaurants will be implement- ed next year. MHRA said it was encouraged by the 2016 deficit estimate which was set to be below one per cent and is expected to further improve next year. MHRA noted that the national debt as a percentage of the GDP is on the decrease and getting closer to the 60 per cent allowed by Euro zone targets. "MHRA will be reviewing the budget estimates for next year in further detail and accordingly will be presenting a more detailed anal- ysis," it said. Every Thursday @ 20:50