October 2018
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The Malta Independent on Sunday | 28 October 2018
Budgetary thoughts Government plays a key role in setting regulatory frameworks. Successive governments have successfully used this regulatory role to promote economic growth and the creation of new industrial and service-based sectors.
JP Fabri
Many people believe that the national budget is primarily an accounting exercise whereby government projects its revenues and expenditures. n essence, a national budget is an economic policy tool that allows governments to allocate resources within a financial constraint. It allows the government to correct market failures and more importantly to direct present resources to future growth. Therefore, any analysis of a government budget must be multi-dimensional. Although not exhaustive, this analysis seeks to provide a multi-dimensional review of the Budget presented last Monday in terms of government’s different economic roles.
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The stabilising role Humans and societies always try to achieve stability, especially in their economic affairs. Having a stable economy and economic policy fosters and facilitates investment decisions. Over the past few years, Malta
has achieved a strong economic trajectory with robust growth rates and low unemployment rates. The Budget continues to build on previous policies and offers a continued sense of stability with the continuation of various schemes and incentives. The distributive role Government’s usually intervene in the market to correct for market failures and to achieve a sense of economic social justice between different cohorts of society. The idea is to provide a safety-net for the most vulnerable groups in societies. Building on strong economic fundamentals, the Government has continued to distribute resources to the most needy through various measures including employment incentives, tax breaks and measures to address the rising housing rents. The Government
continued to invest in the welfare, health and educational system. The regulatory role Government plays a key role in setting regulatory frameworks. Successive governments have successfully used this regulatory role to promote economic growth and the creation of new industrial and servicebased sectors. Currently, the digital economy sector is one which the Government is pushing heavily, and the Budget has shown that there is the drive to continue pushing boundaries in this sector and areas such as artificial intelligence is soon to be integrated. There is also a focus on enlarging the portfolio of the Malta Medicines Authority as it seeks to play a key role in the medical marijuana industry. However, given the number of strains that are currently effect-
ing Malta’s institutional framework, it would have been beneficial for a determined push for a deep institutional and governance reform to be announced in the Budget. The allocative role Finally, the Government is tasked with allocating current resources to future growth. This can be done primarily by directing Government expenditure towards productive factors. Given that Malta is attracting a larger number of tourists and both foreign workers, our infrastructural carrying capacity needs to be continuously enhanced. The Government has committed itself to enhance Malta’s road network however I do believe that we need more of a smarty city approach and focus on a holistic infrastructural investment programme. Allocating resources to enhance
the private sector’s ability and appetite to invest is also important and a continuation of a number of public-private partnership projects is welcome. So is the drive to attract international start-ups. However, I was hoping that there would be a bigger drive towards increasing the expenditure on R&D and to promote more research-based economic sectors. Although Malta’s current economic performance is buoyant, Government needs to ensure that growth is more inclusive and broad-based whilst continuing to sow the seeds for tomorrow’s industries and capacity to grow. The Budget is just one tool at Government’s disposal to achieve its goals and the budget for 2019 is a step in this direction. In the coming years, the Government needs to continue pursuing the right mix of policies, strategies and reforms for this to materialise.
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The Malta Independent on Sunday | 28 October 2018
WHAT’S IN SOCIAL No new taxes or tax increases COLA increase at €2.33 per week Further decrease in income tax Additional day of leave to be given to all workers Second round of tax refunds of between €40 and €68 to be given to over 200,000 people Disability benefit to increase by €10 a week Final tranche of refunds on VAT paid on car registration tax to be handed out Increased refund on VAT on wedding costs PENSIONS Pensions to increase by €4.50 a week (inclusive of COLA), to remain tax-free up to €13,000 Tax exemption on third pillar pensions to be increased to €2,000 Possibility of working beyond retirement age to be extended to the Public Service EDUCATION Tax rebates for children attending private schools to increase MATSEC exams to become completely free Students and up to two adults to get free access to Heritage Malta sites
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The Malta Independent on Sunday | 28 October 2018
IT FOR YOU? PROPERTY Scheme to help individuals over the age of 40 to buy a property More accessible and revised rent subsidy INFRASTRUCTURE AND ENVIRONMENT â‚Ź100 million allocated for road infrastructure projects Launch of schemes to incentivise development of private urban car parks with overlying green areas â‚Ź70 refund for households investing in reverse osmosis systems TRANSPORT Free public transport to be extended to 14 and 15-year-olds, disabled persons and full-time students GOZO Allowance for Gozitans who work in Malta if they carpool or use public transport Ferry ticket refund for Gozitan private sector employees if they use public transport Affordable accommodation and rent subsidy for Gozitan students
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The Malta Independent on Sunday | 28 October 2018
Strengthening society now for the challenges of the future Josef Bugeja
After decades of neglect, the current administration, since assuming the responsibility of leading our country, has for the past five years focused on strengthening the social fabric of the Maltese society by reforming and providing better means of living for those members that were finding it challenging to have ends meet. he fact that for another year the government increased both contributory and non-contributory pensions, decreased income tax, introduced and kept on increasing the in-work benefits, increased other social benefits and introduced innovative
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measures to reflect better today’s reality is something that one should commend, and welcome. One should appreciate that all these improvements are happening thanks to the successful growth of our economy, the continued search for new investment, the ease with which current industries can expand and create new job opportunities, and year after year the national debt is decreasing thus impacting our Gross Domestic Product. For us, as a Union, it is heartening to notice that the government is focusing on the most vulnerable groups while also focusing on strengthening our workforce competencies to increase employability. Moreover, the future was the under theme of this year’s budget speech. The investment in infrastructure and the setting up of the TechMT is a clear sign that Malta is preparing for a new wave of investment that will create new jobs. If we want to keep and improve our standard of living, our country needs to continue to attract new innovative industries, while encoring and facilitating expansion in various industries. We believe that together we can achieve a higher growth rate. We must not forget that in a couple of decades time, the current employee generation, will be some years away from enjoying their merited pension. We must also prepare current students to fill future vacancies. Maybe there will be those that say money is not every-
thing, and these last years’ budgets focused on increasing cash in people’s pockets. However, one should remember that with these measures our economy started to grow and attract new foreign investment. We shed away all the austerity measures that were in place before. Those public entities that were a counterpoise on the public finances, today they improved their operations and are making profits (namely Enemalta and Water Services) and the employees' jobs are no longer at risk. Air Malta also is adjusting its financial position and this year is going to break even. Also last year, wages increased by 3% according to the
The investment in infrastructure and the setting up of the TechMT is a clear sign that Malta is preparing for a new wave of investment that will create new jobs.
last statistics. As a Union, are we satisfied with what so far has been achieved? Yes! Have we reached the end of our members' aspirations and needs? Certainly not! However, we must say that the majority of our members, in these last years, have enjoyed a better standard of living because we were able to improve their working conditions and pay packet drastically. So now they can provide a better life for their families. Also, the introduction of the second day of vacation leave is of great satisfaction to us. We still have a long way to go, but we always believed that this was a process that needs to adjust according to the current realities. Let's take the case about precarious employment. After years being the only ones speaking about precarious employment, finally this reached the political agenda in our country, and the government took steps to curb on the abuses of unscrupulous employers. It was very heartening, last Monday, to hear the Prime Minister wish to push forward our proposal that all workers need to be part of a trade union. If we as a country finally decide on this proposal, we would have achieved the means to end all discrimination and exploitation at the place of work something that trade unions were born to do. Josef Bugeja is the Secretary General of the General Workers’ Union
A budget with no long-term economic vision Josef Vella
The UĦM Voice of the Workers feels that this Budget attempts to address pockets of society (such as pensioners, persons with disability and the parents of children who attend independent schools) but is lacking a long-term economic vision.
rom a social dialogue perspective, the least this union expected was a plan for our economy for 2019 and beyond. The Budget speech lacked any mention of economic policies and this is why the union is critical of the Budget. If we had to disregard the public sector, iGaming and the financial sector, we would have an average wage of €16,000. This is a very low figure when one considers our cost of living. Out there, the feeling is that not everyone is doing well. When they say this, people are usually thinking about their lot. If you are not an employee within the iGaming, government or financial sector, you will not be benefiting from this Budget. Indeed, you may even be negatively affected. This presents the first challenge. What plans are there to develop the economic sectors? We cannot allow those who are forging ahead to keep moving forward unchecked while we
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turn our backs on those who are hardly managing to make ends meet and leave them to struggle. While we recognise the fact that it is hard to have all the sectors moving at par in an economy, it is the responsibility of those at the helm to ensure that there is no significant discrepancy between one sector and another. The UĦM Voice of the Workers notes that the surplus is considerable and this is a positive thing in itself. However, this means that if before we had to bake a cake and this cake had to be of a certain size, the cake we have to bake now has to be bigger. The thing is that if, for example, we had to compare the situation in 2011 with that of today we would find that, whereas in 2011 workers used to have 44 per cent of the cake, today they have only 41 per cent of it. It is the workers who are helping to make the cake bigger and yet they are being punished by being given a portion that is
three per cent smaller than the portion they got before. In other words, the discrepancy between what the investor is getting and what the worker is getting continues to grow. This union has also drawn attention to the impact of foreign workers in the Maltese job market. The Government, however, is resolutely ignoring this situation. The UĦM Voice of the Workers has explained more than once that this is not a question of fear, race or different religious beliefs. This is about the fact that one out of every four workers today is foreign. If we were to analyse the figures we would realise that this is a high number. The presence of foreign workers threatens collective bargaining in this country. If the situation does not change soon, this phenomenon may quickly turn into a crisis. All that was gained by the unions over the years could be lost. Why? Because these workers are not operating on a level
playing field with Maltese workers. The only thing that is keeping the figures high is the high level of unionisation in the Civil Service and public entities. If these were to leave, we will have a problem on our hands. The Government needs to apply the law that demands ‘equal pay for job of equal value’ and it is imperative that foreign workers are offered the same conditions offered to Maltese workers. This would ensure a level playing field and would mitigate abuse. Furthermore, this union has long proposed that the workers join a union of their choice. It is also high time that the Government implements a proposal made by the union that would mean that every worker has a work contract that is registered in order to ensure that the contracts are drawn up according to law and that the established conditions of work are not ignored. Continues on page 10
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The Malta Independent on Sunday | 28 October 2018
BUILDING ON OUR ACHIEVEMENTS a strong investment in the justice and culture sectors Justice
Since taking office, this Government started working on measures, reforms and the enactment of laws, to better the justice system in our country, with the main aim of improving and enhancing good governance, rule of law and democracy. Notable amongst these, but not only, are:
• The removal of prescription on acts of political corruption. • The legal regulation of political party financing. • The introduction of the rights of disclosure, translation, and interpretation to suspects and those held under arrest. • The liberalisation of laws on artistic freedom. • The strengthening of the Commission for Administration of Justice by entrenching it in the Constitution - establishing the Judicial Appointments Committee, and establishing the Committee for Judges and Magistrates as a completely independent organ within the judiciary to take charge of disciplinary cases involving members of the judiciary. • The introduction of the right to be assisted by a lawyer during police interrogations. • The transposition of the Fourth Anti-Money Laundering Directive and Capital Requirements Directive. This budget again proposes other measures and reforms that will continue to enhance and build on what
Culture and Heritage This will be an ambitious year ahead for our Culture and Heritage. During the past year, we saw numerous restoration projects that gave a new lease of life to our historical buildings in Valletta and in our towns and villages. We also had great year where attendance to museums is concerned and increased participation in all cultural
activities. Obviously, the highlight is Valletta 2018 with participation not only of local artists but also of their foreign counterpart. Two notables for this sector where the launching of the new Museum for Contemporary Art – MICAS and in a few days, the inauguration of the new Museum of Art – MUZA. Enhancing this sector is an ongoing process. In store next year:
• Looking back at the commitment given during the Our Ocean Conference organised in Malta in 2017, a new Underwater Cultural Heritage Unit will be established. • More programmes will be developed so that the public will have greater access to our museums and historical sites – during monthly open days which will be free of charge. • With effect from next year, all students attending schools up to secondary level will be entitled to visit all Heritage Malta sites and museums together with two adults, without paying an entrance fee, access will be free and unlimited daily, throughout the year. All children in State, Church and independent schools are entitled to this incentive. • The process leading to the National Inventory for intangible culture will continue with the aim of including traditional elements, activities and practises in the UNESCO list.
has already been achieved, amongst which: • A mediation system within the Rent Regulation Board to address cases of old rents. • A law which gives administrative autonomy to our Courts; • Court services will be enhanced with more services available and accessible online. • Structural works will improve the accessibility to the Chamber of Advocates. • More investment for the Legal Aid Agency. • A digitalisation project will see our Notarial Archives services being provided online.
• A National Monument Committee will be set up. • We will be enhancing our archaeological research, exploration and archival research. • The Superintendence of Cultural Heritage will also see more investment with the engagement of professional personnel and within the administration of this Unit. • By the end of next year a National Culture Policy will be launched.
We strongly believe that our heritage has to be protected as this forms part of our history and should be left as a legacy to future generations. Restoration projects will also continue during 2019 with several projects planned throughout the Maltese islands. Sponsored by:
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The Malta Independent on Sunday | 28 October 2018
Caritas Malta’s reaction to Budget 2019: Socially sensitive but questions remain Anthony Gatt
While Caritas Malta regards the 2019 Budget as a socially sensitive one, and appreciates that the government has recognised the need for social measures to address the needs of the working poor and those who are disadvantaged, questions remain whether the generated wealth has been adequately distributed and whether the proposed raises adequately respond to the rise in cost of living.
mongst the socially sensitive measures are the raises of children allowance for lower income families and the increases in benefits for persons with disability and mental illness. Furthermore, Caritas Malta welcomes the attempts at addressing the grave challenges faced by some people in relation to their housing situation. The significant increase in rental subsidies, the support for middle aged persons to be able to access loans to buy property, and considerable investment in social housing contributes to alleviating the strain of a number of persons who are struggling with securing an adequate roof on their head. Other measures that directly impact persons that we offer support to include the efforts to eradicate Hepatitis C; the investment in prison system to have an adequate infrastructure that allows for the much needed categorisation system, and a system that truly encourages rehabilitation as opposed to punishment; and the investment in youth work. The continuation of inwork benefits will continue to encourage people off unemployment benefits. Notwithstanding the list of social measures, five concerns remain. In the area of Education we would have expected increased efforts to retain chil-
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dren at school by offering incentives for families whose children are dropping out, especially those who are under 16years of age. The earlier a child drops out of school the higher the risk for maladjustment. Improved education and literacy are key to the eradication of poverty. While an attempt was made to increase pensions for pensioners and to introduce measures to increase their income, the question remains whether such increases are adequate. A question also remains whether the raise in minimum wage as planned in previous budgets and the COLA will adequately respond to the rise in cost of living. Caritas will continue to advocate for a minimum wage that secures enough income for an adequate living. Together with this, every effort needs to be taken to ensure that no person is working in precarious job situations. While Caritas Malta welcomes drug prevention attempts in schools, it notes that primary prevention attempts in schools usually aim for children and young people who are at less risk of experimenting or dabbling with drugs. Many drug prevention programmes in schools have failed to address those who are a medium to high risk for drugs use. It is an established fact that the home environ-
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The significant increase in rental subsidies, the support for middle aged persons to be able to access loans to buy property, and considerable investment in social housing contributes to alleviating the strain of a number of persons who are struggling with securing an adequate roof on their head.
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ment has a more notable impact on the educational and social adjustment of children than the school environment. Prevention efforts need to be evidence based programmes and necessarily need to engage
parents in parenting programmes early on in life. 5. Reference to the national policy on cannabis. Caritas Malta advocates for a wider Drug Policy that addresses the range of substances and not just Cannabis on its own. Caritas Malta remains hopeful that legal access to cannabis remains solely for medicinal purposes while decriminalisation laws are updated. While the country is geared toward economic growth and the elimination of deficit, Caritas Malta hopes to witness the eradication of poverty and social exclusion. Caritas Malta also acknowledges the decrease in the rates of severe material deprivation in the last two years. This has resulted from the various forms of assistance provided primarily by government and also by other entities like the Church and NGOs. However we have also witnessed an increase in the rate of persons ‘at risk of poverty’ in the general population and a significant increase in the ‘at risk of poverty’ rates for the over 65years age bracket. Caritas Malta will continue to advocate and work wholeheartedly for the just and equitable distribution of the generated wealth so that everyone lives a dignified life in peaceful communion with others. Anthony Gatt is the Director of Caritas Malta
Between liking, not liking so much and not liking at all Anthony Mulè Stagno
The National Council for the Elderly (KNA) makes its proposals for the budget every year, and this one was no exception. After the budget we normally analyse its implications for the elderly but we have not had time to do this yet. So I’m going to give my personal opinion on the subject.
ike in every other budget I’ve seen, and I’ve seen quite a few, there are things you like, things you don’t like so much and things that you don’t like at all. But on the whole I think this budget leans towards the first option. One cannot say that the elderly and the pensioners have been forgotten, far from it, but can one say that they’ve had their fair share? Well, a raise of €2.17 a week in the pensions rate can hardly be said to be enough, especially for those eking it out on the minimum pension, although some will argue that it’s a start. On the other hand, making it tax free is a very good move, although it is a far cry from our proposal to make all contributory pensions tax free, but again a step in the right direction. Other things to be commended in this budget are the measures regarding carers and the raise in their allowances, this incentivises relatives to become carers and more elderly to stay living in the place they are used to. Also the raise in the rate of the medical aid scheme alleviates to some extent the burden on the medical bills for the needy. I also found the extension of the free “Tal-Linja” card to children an excellent idea, but why was this not also extended to the elderly? I believe that this measure was promised to us some time ago and has never seen the light of day.
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The same can be said for the Heritage Malta sites free for students. While I appreciate the drive to make our heritage more accessible to the younger generation, I cannot but remember that when we at KNA, a few years ago, asked for the elderly to have access to these sites at a reduced rate we were told that this is not feasible. What I find lacking in this budget are projects for the elderly. The budget measures, especially where they concern the elderly, are mainly, if not solely, about money. I have no problem with the stuff, but it’s not the only thing the elderly need to live a more dignified life. I did not notice any men-
tion of security, new services, better access, especially where pavements are concerned and no measures to curb abuses of the vulnerability of the elderly, sometimes, if not mainly, by their close relatives. Of course there are other measures in the budget that are for the public in general and so they also have an impact on the elderly, but these I have not mentioned because I expect them to be commented upon by others who are more interested in their impact vis-avis their respective fields. Anthony Mulè Stagno is the President of the National Council for the Elderly
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The Malta Independent on Sunday | 28 October 2018
STRENGTHENING SOCIETY AND FAMILIES It is unarguable that Malta is living one of its best times in history. Economy, work, life prosperity and optimism, have all been on the rise, during the last years. A country that managed to turn consecutive deficits into surpluses. €392.7 million registered in 2017, an increase of more than €296.3 million, over that achieved in 2016. This growth permits the economy to flourish, thus permitting society to continue to benefit in one way or other. This has been clearly exhibited during this week’s budget presentation by the finance Minister, Edward Scicluna. A budget which gives not takes, which improves not hinders,
which boosts our economy and not put the country in austerity, and most of all, a budget that helps in promoting social mobility, even to those strata that may have performed less better. The present Government, prioritizes people’s needs. For example, one could clearly observe an increase in pensions, for the fourth year running. Pensions have been increased, in this budget, by €4.50 per week when including also the COLA. 92,000 pensioners will benefit from this measure, totalling up to €21 million. Service pensions will also increase by €200, while benefits for medical assistance will also increase by €5.14 per
week, for those married persons, where there are two adults suffering from chronic illnesses. We strongly believe in strengthening pensioners’ quality of life. Let’s not forget, other previous measures taken by this Government, to help pensioners from falling in poverty or material deprivation. Reductions in water and electricity tariffs, along with repeated reduction of taxes, are clearly some of the main measures leading to such positive results. Malta’s budget for 2019, shows a clear desire for a more work life balance. Workers will be granted an extra day of leave beyond the day added last year. This is surely another maintained Government pledge, that of returning holidays which fall on a weekend to the workforce. Another welcomed new initiative was that of boosting children’s allowance up to a maximum of €96 per child, for those families who earn less than €20,000 yearly. This is the first children’s allowance increase in 11 years. Moreover, this measure also aims to help get children out of poverty, where at least 1 member of the family works. We are committed as a Government in fighting poverty and social exclusion, an area which has been constantly improving, especially within the most vulnerable groups; children and elderly.
The budget also introduced an increase of €300 tax refund for each child attending Kindergarten, Primary or Secondary Schools, with the maximum tax refund being set at €2600. Another positive measure, is that of free school transport, announced earlier in October. This is a Government which clearly feels the Nation’s sentiment, a Government which will continue to facilitate social justice. The presented budget also addresses the rental and housing market, and proposes changes for better-regulated contracts. We seek to give more stability to this volatile sector. Besides this, social housing will remain a priority, with an
additional 1200 units, planned to be built during the coming years. We, may often get criticized in various areas, but surely our social soul can never be questioned. As a Government, we believe that every person has the right to benefit from a bright economy, an economy that is well above that of other European countries. This is prosperity with a purpose, a concept that shall remain a priority in the coming years. Sponsored by:
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The Malta Independent on Sunday | 28 October 2018
Average income of the Maltese is not increasing at the same rate as economic growth Martin Balzan
The Confederation of Maltese Trade Unions notes that the €2.33 cost of living adjustment does not reflect the growth in the economy and this presents a challenge to trade unions so that their members can benefit from economic growth by negotiating better collective agreements.
he fact that for another year the government increased both contributory and non-contributory pensions, decreased income tax, introduced and kept on increasing the in-work benefits, increased other social benefits and introduced innovative measures to reflect better today’s reality is something that one should commend, and welcome. There seems to have been an effort to help pensioners especially those clearly below the poverty line, however for these increases to be meaningful they must be repeated every budget for the next five years. It is not clear whether the proposed changes to the rent laws would be effective. Maintaining the free market while giving subsidies might be intended to help, this might in reality fuel hire rent prices. The promise of social housing has still to materialise though re-iterated from previous budgets. While investment in road in-
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frastructure and the successful introduction of free transport for students are welcome. Increasing traffic lanes has resulted in new bottlenecks for example on the flyover between Qormi and Hamrun near MaltaPost. An increase in cars on the road will lead to worsening air quality. At the Malta Council for Social and Economic Development,
Transport Malta officials mentioned a study on the viability of an underground system, and results are keenly awaited. The CMTU feels that, rather, new initiatives for free transport for employees to their place of work would be most welcome. The investment in the building of the outpatients block,
and the increase in the number of beds at Mater Dei Hospital is a welcome investment, although this comes after two years of denial that the current outpatient capacity was sufficient. Finally it is not clear how many new medicines will be introduced on the Schedule V for chronic diseases, and while new drugs for diabetes and hepatitis C are welcome, many pensioners often have to pay for many medicines out of pocket, and it appears that the situation is unlikely to change in the near future. In conclusion, while the growth in the economy, full employment, and a budget surplus are most welcome it appears that improvement in the living standards of the average income of the Maltese citizen is not increasing at the same rate, and this represents a major challenge for unions to improve the quality of life of their members. Martin Balzan is the President of the Confederation of Maltese Trade Unions
A budget with no long-term economic vision Continued from page 6 Let’s remove the workers of iGaming from the equation as they have phenomenal salaries. What is left are people coming from third countries or European Union countries that economically rank lower than Malta. This is a problem that, if not tackled seriously by the Government, is going to result in replacements. For examples, suffice it to look at hotels, restaurants and, now, even supermarkets. Maltese workers have become a rarity. Nothing was said about this situation in the Budget speech. In the press conference that followed the speech, however, the Prime Minister did speak about the proposal put forward by the GWU that recommends that employers join
employers’ unions and workers join workers’ unions. (What was not mentioned was that this was a UĦM Voice of the Workers proposal that had been put forward in a discussion among politicians, among them the Prime Minister, and the union during a UĦM General Conference held in December 2015). The UĦM Voice of the Workers is disappointed that nothing was said about the protection of workers’ salaries. The Government is not sufficiently protecting them. In next year’s Budget there was mention of the Home Equity Release measure. The Government is still trying to encourage pensioners to sell their houses to make good for their pensions. There was a time when our ability to save was recognised as being one of our Maltese characteristics
and we were also known as being home owners. The Central Bank has already declared that this saving culture is dying out and, if we are not careful, will be eradicated. The Home Equity Release measure is a stop gap. We are already in a situation where we have inadequate pensions and now we are asking pensioners to let go of their properties. There was also mention of the Equity Sharing Scheme but not enough information was provided. It seems that the Government wishes to address the situation faced by persons over 40 who are separated or divorced and who cannot afford to buy their property on a single salary. It was explained to this union that if an individual can pay up to €100,000 and the apartment costs €200,000, the Government will sponsor the remaining
€100,000 as long as the individual can pay 50 per cent of the cost. The individual can then pay off the apartment over a number of years. If the apartment is not paid off by the individual it will be turned into a rental property and the individual’s children will have the opportunity to pay it off. This principle of the scheme sounds positive but there was insufficient information given on how it will actually work to be able to make an informed decision. The UĦM Voice of the Workers feels that it is a pity that we have reduced the budget exercise to short-term planning when we know that the country’s economy depends on a long-term plan. Josef Vella is the Chief Executive Officer of UĦM Voice of the Workers
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The Malta Independent on Sunday | 28 October 2018
We’re on the right track, but we can do more Kevin J. Borg
In our preliminary reaction, as a Chamber we welcomed the Budget for 2019 as a positive one in so much that it did not surprise our entrepreneurs with new burdens, and refrained from introducing new taxes. owever, the budget, which is being proposed at a time of unprecedented GDP growth in the country, did not seem to give a longterm direction in terms of how Government intends to consolidate this prosperity, through incentives for businesses at a micro level to ensure continuous
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economic growth. As a Chamber, we believe that Government should start approaching the Budget from a multi-annual perspective. This would entail planning well ahead on what is required in the medium to long term rather than looking at the budget as purely an annual fiscal exercise. Such an outlook would equip our business leaders with the necessary information to plan ahead. When Government last year announced a seven-year investment plan on our roads network, the relevant business sectors geared-up and planned their strategies for growth accordingly. We wish to see more of this approach applied on a wider scale. The Chamber welcomed the favourable economic results achieved. In our pre-budget recommendations, we reiterated the need to keep the country’s public finances in check. The economic performances and the standings of public finances have been notably positive in recent years, however, within the next few years, we feel that certain sources of public revenue may not remain reliable and sustainable revenue sources. It seems that Government is taking heed of the Chamber’s constant recommendations in this respect, as this bill of good health is not overly reliant on the revenues from the IIP scheme.
Focusing on more domestic matters, we welcomed measures aimed at promoting fair enforcement, the promotion of new emerging segments in the economy such as the establishment of Tech.mt and the strong focus on pensions. In this context the Chamber must once again call on Government to invest the proceeds of existing revenue streams in order to foster a more sustainable economic model for Malta – one that is not overly reliant on the constant attraction of foreign assets and resources. Focusing on more domestic matters, we welcomed measures aimed at promoting fair enforcement, the promotion of new emerging segments in the economy such as the establishment of Tech.mt and the strong focus on pensions. One disappointing feature in the announced budget revolves around the Manufacturing sector which we feel deserved a
Mental health set to feature prominently during 2019 Mental health, unfortunately the cinderella of the health sector for a long number of years, is set to feature prominently during the coming year. €6.5 million have been allocated for the upgrading works and equipment of Mount Carmel Hospital alone. A new acute mental health hospital, catering also for Psychiatric Outpatients, is being planned for the vicinity of Mater Dei Hospital. Meanwhile a new mental health clinic in the north of the island is being planned together with a Day Centre and ‘hostels’ for patients with minor mental health problems. Such facilities will enable patients to remain active and continue living in the community. In collaboration with the Ministry for Education, Ministry for Health will be investing in a specialised school clinic for autistic children providing Sensory Integration Therapy. Marsa Primary School has been earmarked for the location of this clinic. The Children and Young People Services (CYPS) cur-
Chris Fearne – Deputy Prime Minister & Minister for Health rently part and parcel of St Luke’s Hospital will be relocated to an alternative place to be in line with today’s necessities and making it more accessible. Nearly €115 million have been earmarked for medicines and surgical materials, reflecting an additional €11 million allocated for 2018, whilst €10
million are meant for cancer treatment, this being some €4 million more than budget allocated for 2018. Development at Mater Dei Hospital is an ongoing feature. A new outpatients unit with an underground car park for 500 cars will create additional space for around 120 extra beds at Mater Dei. Investment at Mater Dei is set to be intensified, first and foremost with the introduction of robotic surgery, a state-of-the-art service, till now unavailable on the island with patients needing such intervention have to be sent abroad. Additional funds are being allocated for new IVF services. A new, modern health centre in Victoria, Gozo, together with Barts Anatomy Centre are due to be inaugurated during the coming year whilst a refurbishing programme of health centres and local clinics in Malta is ongoing. Total budget for 2019 allocated for the Ministry of Health amounts to more than €685 million, €75 million more than the budget allocated for the current year.
stronger focus. Constant improvements in export competitiveness factors is of crucial importance to industry, for which the Chamber is constantly advocating. It is clear from the data published that industry requires more attention, especially within the context of its 2018 gross value added which registered an overall significant decline compared to 2017. The Chamber is a strong believer in Manufacturing and believes that with further assistance to help increase value, and lower operating costs, the country can manage to scale up some of these companies in the value chain. Unfortunately this budget also falls short of addressing a crucial issue which the Chamber has been very vociferous about in the past years. In fact, sadly, very little of the practical recommendations we presented to the Ministry of Finance to address the issue of lack of human resources in Malta, were taken on board. Although our recommendations in favour of reducing early school leavers, and others conducive to active ageing amongst public-sector employees were featured, others such as strengthening Identity Malta with more resources to deal with increased volume of permits; organising a marketing campaign promoting living and employ-
ment in Malta targeted at selected EU markets which have a surplus of skilled workers; creating a public campaign highlighting the valuable contributions that older workers provide as mentors and role models to the many younger employees; and extending types of work-based learning across all the post-secondary and tertiary level educational institutes, were not. The Chamber has also suggested that the National Skills Council ought to be re-dimensioned to focus solely on skills forecasting needed by Industry in the years to come. In conclusion, the Chamber reiterates that a thorough impact assessment of the country’s ongoing growth should be initiated with a view to set sustainable targets for maximum carrying capacities and output levels, in the country’s economic segments. This study would further recommend a way forward towards reaching the set output levels and maximising returns with the highest efficiency of resources. Once this analysis is concluded, a national debate on a new long-term economic, societal and environmental master plan for the country post 2020 would be in order. Kevin J. Borg is the Director General of the Malta Chamber of Commerce, Enterprise and Industry
Maersk transformation sees MCC and Seago folded into Sealand brand In the ongoing transformation of the A.P. Moller-Maersk Group, the Asia regional line MCC Transport, European regional line Seago Line, and its Americas regional brand Sealand, have been unified under one brand, Sealand – a Maersk Company. “Operating in different parts of the world, MCC, Sealand, and Seago Line have built a similar value proposition and close relationships with customers.” The three companies will continue to operate independently, as they will operate as Sealand Asia, Sealand Europe & Med, and Sealand Americas. Consequently, the three teams in three locations, Singapore, Copenhagen and Miami respectively would remain unchanged. The integrated commercial organisation will operate with one management team, one sales force, a product organisation and one customer experience organisation. The simplified naming structure for these brands will help strengthen brand recognition and ensure clarity of choice for customers. “They are all standing for speed, agility and care – values that have proven to be core drivers for the customers of all three intra-regional brands,” a Maersk
statement explained. “As part of the larger Maersk family we will continue to be your regional partner with the benefit of their global scale and reach. Because the only thing changing is our name”, Sealand – A Maersk Company said in its press release. About Maersk Line Maersk Line has been known for its reliable, flexible and eco-efficient transportation and logistics services. Today, it provides end-toend transportation to every corner of the globe. They number 630 vessels and 33,000 employees, with 306 offices in 114 countries. Thomas Smith Group was appointed as the local agent of Maersk Line in 2009. Maersk is renowned internationally not solely for being the most secure and reliable container shipping company, but also the most environmentally friendly.