Maternity leave is expected to be increased by four weeks over two years, as tomorrow’s Budget aims to entice more women into the labour market, The Sunday Times has learnt.
It’s certainly not a time to take risks
The government will foot the cost of two more weeks of maternity leave in 2012 and another two weeks in 2013 in a drive to encourage more women to work, according to sources. Malta currently permits 14 weeks of paid maternity leave.
The news comes as a surprise considering Malta is among the EU member states opposing amendments to a European Commission proposal calling for an extension of minimum maternity leave to 20 weeks on full pay and the establishment of two-week paid paternity leave.
Employers are believed to have objected to the government’s suggestion to increase maternity leave because of costs, though many economists believe it is one of the solutions to increase the low 35 per cent female participation rate.
But employees will have to wait for the income tax cuts pledged in the 2008 election campaign by the government, when it had announced that the top income tax rate would be cut from 35 per cent to 25 per cent (up to a maximum salary of €60,000).
“The government would be irresponsible to go down this road in times of crisis. It’s certainly not a time to take risks,” a source close to the government said.
Tomorrow’s Budget is intended to provide stability in the midst of international uncertainty, the official said. However, the Prime Minister last week said the deficit is expected to drop below three per cent of GDP this year. The government also plans to cut the deficit to 2.2 per cent of GDP by next year.
According to a forecast by the European Commission issued last Thursday in Brussels, the Maltese economy is heading for a slowdown in the next two years, amid a looming European recession.
“The government needs more room for flexibility than ever, especially now that the European Commission has more powers to ensure member states meet fiscal targets,” an official said.
He added that the government also needs to take into account extraordinary costs surrounding Air Malta, and to cushion any surplus energy costs – water and electricity tariffs are expected to remain stable for next year.
Among other initiatives expected tomorrow is a government guarantee scheme focusing on start-up companies to provide them with necessary liquidity.
hgrech@timesofmalta.com