No Reason For Malta To Extend Wage Supplement Beyond This Month, Chamber Of SMEs Says
Malta will enter new post-pandemic territory next month when it completely lets go of the wage supplement scheme.
And despite a recent call by Opposition leader Bernard Grech to extend the scheme by another three months, the CEO of the Chamber of SMEs believes now is the time to let it go.
“Our agreement with the government is for the wage supplement to last until the end of the year and we no reason to change that yet,” Abigail Mamo told Lovin Malta.
“Obviously everyone will be more comfortable with the wage supplement but I don’t think it will tally with the government’s very ambitious deficit targets. We should do our utmost to do without it.”
She said that the Chamber’s focus is on helping sectors badly impacted by the pandemic tap into Malta Enterprise schemes so that they can cover their costs in a sustainable manner.
Bernard Grech has called for the wage supplement to be extended until March 2022
“If they move their businesses in a certain direction, the aid available is significant and very flexible.”
She also reiterated the Chamber’s opposition to a third closure of shops and businesses, suggesting that if needs be, measures can be taken without shutting them down entirely.
The government spent several hundreds of millions on helping businesses pay their employees’ salaries during the pandemic, with national statistics showing it spent €392 million in 2020 alone.
It was an extremely generous scheme, with the government giving businesses up to €800 per worker a month, and it resulted in unemployment rates remaining low.
However, it also resulted in the deficit shooting up to 9.7% as a percentage of GDP in 2020, one of the highest rates in the EU, and up again to a forecasted 11.1% this year.
In its Budget for next year, the government has estimated that the deficit will drop significantly to 5.6%, although Finance Minister Clyde Caruana has said that soaring energy prices and general inflation could see it rise to 7%.
Earlier this week, Grech urged the government to extend the wage supplement till March, warning that hotels and restaurants are facing a drop in bookings as a result of a rise in COVID-19 cases.
Grech has been critical of the 11.1% deficit but has insisted that excess government expenditure isn’t due to COVID-19 aid but corruption and government mismanagement.
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