Reactions - GWU: Budget 'far from what was expected'

The GWU in an initial reaction to the Budget - released while the Budget was still being read - said this evening that although some measures were being taken to ease the burden on the middle class, the people still remained heavily burdened, particularly by the water and electricity tariffs.

The government, it said had not had the courage to decide on an extension of  Maternity leave and left it up to the Malta Council for Economic and Social Development to decide.

The union said it was disappointed that many of its recommendations were not taken up.

The Budget, it said, was silent on what the government would do about precarious work. It also did not explain how the government expected to see revenue from social security rise by €46m.

The union said it will issue its official reaction on Thursday.

The GWU had called for a revision of the Cost of Living Adjustment (COLA) to adequately reflect the living conditions of the workers.

The COLA needed to be based on the national average wage as calculated by the NSO, Union General Secretary Tony Zarb had said in a press conference about the union's Budget proposals.

Furthermore, he said, cost of living wage increases should be given every six months and not backdated by a year, as was happening now.

‘A BUSINESS AS USUAL BUDGET’ – MEA

The Malta Employers’ Association described the National budget for 2012 as a ‘business as usual budget’.

It said the budget contained a spread of economic and social measures affecting numerous sectors of Maltese society, but lacked any substantial initiatives to stimulate economic activity. 

The MEA said the the extension of schemes to stimulate investment by SMEs and the introduction of the bank guarantee scheme; the income tax adjustments for families with children; the investment in Bio Malta campus, and the increased allocation to attract more tourists during 2012 were positive measures. The incentives to increase female participation was also welcome and MEA lookedforward to discuss these further at MCESD as indicated by the Minister.

On education, MEA said it supported the increase in expenditure, but, as stated in its budget proposals, these have to be accompanied by audits and there is a need to re-evaluate the way in which the results of this expenditure is assessed to maximise the effectiveness of this important investment.

The enhanced allocation to MCAST and University was laudable as long as this was supported with initiatives to continue to reduce the number of school leavers, while ensuring that systems like the student stipends are sustainable.

The MEA said there were no direct interventions to address Malta’s competitiveness.

"Employers will be burdened with an automatic increase of €4.66 per week COLA to all employees irrespective of the enterprise’s financial situation. In the forecasted international scenario, this puts many companies at a serious risk."

The budgeted allocation to Air Malta of €20m needs to be supported by strict performance indicators to guarantee that taxpayers money will return the airline to a profitable path, the association added. The discussions about the reform should be concluded as early as possible.

"Basically, rather spreading limited expenditure over a wide range of targets, we would have preferred a more focused approach to prioritise issues for a better impact,"the MEA said.

GRTU WELCOMES DEFICIT REDUCTION, CONCERNS ON MATERNITY LEAVE

The GRTU said it welcomed the Budget, viewing it as distancing the country from trouble.

It praised Finance Minister Tonio Fenech for his determination to narrow the deficit and said the minister could have actually reined in government spending even more and limited the salary increase to the rate of inflation.

The GRTU welcomed the schemes for SMEs, particularly the guarantee scheme for borrowing by very small enterprises.

It also welcomed the tax cuts for parents, seeing it as a means of raising their purchasing power.     

The Malta Chamber of Commerce, Enterprise and Industry said it was encouraged by the fact that the Budget speech aimed at promoting economic growth and consolidating public finances  without creating economic shocks , with no increases in tax and utility rates.  The chamber welcomed the extension of Micro Invest Scheme, the creation of the new MicroGuarantee scheme and further improvement in private industrial zone.

The allocation of €14.2 million in incentives to industry and the upgrading of Bulebel and Hal Far Industrial zones, with an investment of €16.7 million, were also welcome. 

The Malta Chamber said it was disappointed with the manner in which the matter of maternity leave extension was raised abruptly during the final MCESD meeting preceding the Budget. " The Malta Chamber believes that this proposal requires serious evaluation as well as an in-depth discussion with all social partners prior to its implementation," it said. 

It was also disappointed that the country had wasted yet another opportunity to address the COLA formula.

DEVELOPERS REGRET ABSENCE OF CAPITAL GAINS TAX REVISION

The Malta Developers' Association noted that the Minister of Finance had announced a scheme for the granting of several fiscal incentives in the case of the restoration and rehabilitation of scheduled properties and properties sited within urban centres. 

The government had also partially adopted a suggestion it made on the rental market in the case of taxation of rents received from tenants who qualify for rent subsidies. MDA had asked Government to introduce a system of withholding tax for all income from rents with a less onerous consideration in the case of rents subsidised by the state for social reasons. The small step announced by government will not help the rental market to grow and become stronger.

"While it appreciates that the Budget exercise involves a lot of considerations, MDA regrets that the government ignored many of its suggestions aimed at provoking a recovery of the property market, among them the need for a revision of the Capital Gains Tax system on the sale of property as the 12% tax on the sale price is serving as an unjust burden in the present circumstances when property prices are going down as well as the exaggerated valuations carried out by the responsible government department after contracts are published," the MDA said.

 It also noted the announced increase on the duty on cement, a step that, it said, would continue to increase the cost of construction at a time when the construction industry is facing a downturn.

The MDA said the scheme on urban centres was one of several suggestions it made this year.

"However, MDA feels that the condition restricting the scheme only in the case of a property being restored or rehabilitated and not if the property is demolished and reconstructed is restrictive and will not lead to the fulfilment of the scheme’s aims since in these urban centres one finds buildings that cannot be adapted for residential or commercial use with the facilities one expects to find nowadays. MDA has always insisted that reconstruction in urban centres should respect the characteristics of the area where the works are carried out and should not result in an increase in development density. If these principles are observed, the restriction in the scheme is not justified."

Furthermore, the maximum €5,000 in the refund on cost or restoration works rendered this refund negligible and this measure would not serve as an incentive for this work to be carried out.

The MDA appealed to the government to widen the scope of the announced scheme by removing the said restriction.