The government’s €1.8 billion rescue package introduced on Wednesday to help businesses cope with the economic and financial impact of the Coronavirus, in reality, added up to little compared to the support businesses received in other countries, the Chamber of Small and Medium-sized Enterprises (SMEs) CEO Abigail Mamo told The Shift.
The package includes €1.6 billion in liquidity for companies (€700 million in tax deferrals and €900 million in loan guarantees), €210 million injection to support the economy and €350 given to employers for each employee on quarantine leave, among others measures.
Discussions on social media show business owners remain confused about the implementation of these measures, while the Chamber of Commerce said they were “disappointing” while pointing out that employees would be the biggest losers in the support package announced by the government.
The Shift reached out to Mamo for a reaction following the measures announced yesterday evening. The Chamber of SMEs had slammed the previous measures announced on Saturday and strongly voiced its concern that they were “in no way close to what businesses need to sustain jobs”.
On Thursday, Mamo did not mince her words on the news measures proposed by the government, saying they were “very ill-fitting”.
“There is no understanding of what businesses need and how serious the situation is… We are worried, as there are clear signs that the government has thrown in the towel and more is being done on tackling unemployment than preventing job losses,” she said.
The measures do not make sense, she added, in both the short and long term.
Mamo said it would be more cost-effective for the government to be serious about providing aid now rather than helping people through unemployment.
“This is the result of the government doing everything on its own… They think they know more than organisations who have been doing this job for 70 years and have gotten through different crises together under different administrations,” she told The Shift.
A study carried out by the Chamber of SMEs found that 35% of respondents would not be able to sustain employment levels past a couple of weeks, and for rest it is only a matter of months.
In a separate statement, The Malta Chamber of Commerce, Enterprise and Industry said that the measures announced by Abela were “disappointing” and that they fell short of the calls made by the Chamber.
They said that although the government said the measures were intended to protect jobs and ensure that employees suffer no reductions to their salaries, “the employees will be the biggest loser from the support package announced this evening.”
The subsidies on salaries were the priority measure for the Chamber on behalf of members, it said.
To this end, the Chamber had suggested that in cases of companies suffering in excess of 25% loss in turnover, the government should pay 50% of the employee’s salary up to a maximum of the average salary, with the employer covering a further 25%.
The announcement made on Wednesday was equivalent to a mere subsidy of 20% of the employee’s salary at the level of the minimum wage, the Chamber of Commerce said. The measures would make it impossible for employers to avoid significant redundancies, it warned.
“In a scenario of looming mass layoffs, even the deferment of payment of payroll taxes and VAT, which accounts for the bulk of the package, becomes a redundant measure. This amount will not be paid after recovery but lost forever if there are significant job losses and declines in local sales,” the Chamber of Commerce said. Both the loan guarantees for business and quarantine leave were also insufficient.