Prime Minister Robert Abela has announced a €2 billion package for Maltese businesses to protect the economy ahead of an incoming recession brought on by the COVID-19 coronavirus outbreak.
That’s 12.9% of Malta’s 2019 GDP.
Flanked by Finance Minister Edward Scicluna and Economy Minister Silvio Schembri, Abela said that the package will also cover bank loans, rentals, self-employed individuals and disabled persons.
There will be tax deferrals of up to €700 million and loan guarantees of €900 million.
A postponement of income tax, VAT, and national insurance for the months of March and April for both employees and the self-employed. This is predicted to cost between €400 and €700 million.
Quarantine leave will be partially covered by the government, with Abela announcing that the state will make funds available for each business for every employee to cover the expense.
Working parents who are unable to telework will be given an €800 benefit per month. This, the government says, should help around 12,000 families in Malta and cost around €16 million.
There will also be two weeks extra leave made available.
The government hs also set aside a further 900 million for further guarantees and an additional credit of €4.5 billion.
The National Development and Social Fund, which is funded by the controversial cash-for-passports scheme, will allocate €150 million for bank guarantees.
Local banks will also be able to accept all requests for a 3-month moratorium for personal and business loans.
There will also be other measures to cover potential job losses. The government will create avenues for employment in other industries for those who face redundancies.
Anywhere between 20,000 to 44,000 workers will receive some benefits. These will reflect a two day or one-day weekly salary. This will cost around €3 million.
Anyone whose job has been terminated from 9th March 2020, will receive a temporary increase in their unemployment benefit. Housing subsidies will also increase.
The same benefits apply to self-employed persons who could have closed their doors.
Jobs plus will launch a new service to assist with residents who are now unemployed, to third-country nationals whose employment has been terminated, and employers seeking new recruits.
Abela said that the measures would guarantee certainty during these uncertain times and protect both workers and businesses alike.
“Without any distinction,” Abela said in what appeared to be a reference to Schembri’s recent slip-up.
While stressing that health would remain a priority, Abela said it was the economy that guaranteed the livelihood of Maltese residents.
Each measure has been costed and was focused on economic sustainability, Abela said, warning that the crisis could go roll on for months.
Economic concerns have grown in recent days with the COVID-19 coronavirus outbreak set to trigger an economic recession. Malta is already taking a heavy hit ever since the government effectively closed its borders to non-essential travel through mandatory quarantine for all arrivals.
The tourism and hospitality industry is facing the most significant threat. However, businesses across the entire spectrum are expected to feel the punch.
Measures introduced by the government, such as a teleworking grant and a two-month moratorium on collecting taxes, had done little to alleviate worry, with the business leaders and unions feeling they did not go far enough.
The Chamber of SMEs even warned that if measures failed to improve, workers could have been out of a job within two months.