Whether it’s pensions, healthcare or financing, the presentation of the Budget is always a good opportunity to stop, take stock and plan ahead.
Deborah Schembri, managing director at STM Malta Trust and Co. Management Ltd, feels it is time to focus on workplace pension schemes, which do not oblige the employer to contribute but to facilitate the provision of a personal pension scheme to workers. There had to be relevant income tax relief in relation to an employee’s contribution to such a pensions scheme. Having an annual capping, the tax relief has to be such that it will incentivise individuals to save for the future.
The total pension fund may be subject to a lifetime allowance, Ms Schembri notes. “Such an initiative would be a good step forward to motivate employees to invest in a private pension scheme and so be less dependent on State pensions,” she says.
Burying our heads in the sand will not help and the time to start reforms is when the economy is doing well
Deloitte Malta chairman Andrew Manduca raises the issue of sustainable healthcare.
He acknowledges that Malta is doing well on the economic front. It has very good growth and employment rates but while government finances have improved, Mr Manduca notes there is an area that needs attention: the sustainability of our healthcare system.
“Is it realistic to believe we can continue giving free healthcare to all irrespective of one’s financial means for all types of medical needs,” he asks.
Burying our heads in the sand will not help, Mr Manduca says, adding that the time to start reforms is when the economy is doing well.
He warns: “If State finances deteriorate this will have negative effects across all areas of our economy and, therefore, cross-party collaboration on an issue like this would, in my view, be very good for Malta.”
Family businesses, start-ups and SMEs are highlighted by Kevin Valenzia, territory senior partner, PwC Malta. Alternative modes of finance such as ‘crowdfunding’ and other peer-to-peer (p2p) funding methods for their businesses could be viable options to the traditional credit institutions, especially for start-ups and SMEs, which may have limited access to traditional forms of finance, he notes.
Such methods of finance encourage start-ups and business growth and Mr Valenzia deems it encouraging that a number of entities and social partners have presented pre-Budget proposals in this respect.
He lays stress on support to family businesses that make up over 90 per cent of the labour market and contribute significantly to the economy. One looks forward to see the proposed Malta Family Business Act coming into force also because the succession of family businesses to the next generation remains a major concern for family business owners.
Proposals, fiscal or otherwise, aimed at assisting family businesses in areas such as succession, mediation and governance would definitely be welcome, Mr Valenzia says.