Labour, safe for business? “The Malta Chamber augurs that there will be no actions which could lead to undue uncertainty. This could prove to be costly for business and for Malta’s economic and social objectives.”
And it’s not only Labour, of course. The Chamber clearly has in mind here those other MPs, independent and on the government benches, who think that there is absolutely nothing wrong with bringing the government down now by voting against this budget or not voting at all, once an election is round the corner anyway.
The lawyer, the dentist and the architect seem entirely divorced from the realities of economic life, and of how bringing down the government on a budget vote is totally different to the standard procedural dissolution of parliament before a general election and AFTER the approval of the budget.
Bringing down the government over the budget has very serious economic consequences that the normal dissolution of parliament does not. The impact will be great, and you really do have to be a certain sort of person not to know this, or to know it and still not care.
THE MALTA CHAMBER OF COMMERCE – MEDIA RELEASE
DATE: 28 November 2012
Budget 2013
Malta Chamber: A Stable Budget in the Interest of Financial Consolidation and Jobs
The Malta Chamber of Commerce, Enterprise and Industry noted the underlining priorities behind the 2013 Budget as being fiscal consolidation and job creation. The Malta Chamber fully supports these objectives and is encouraged by the fact that the 2013 Budget did not create economic shocks namely through increases in tax and utility rates.
On the contrary, the announced reduction in income tax rates is in line with the Malta Chamber’s consistent requests for reduced tax burdens in the economy.
These requests were made in the interest of both national competitiveness via lower pressure on wage demands and a boost in domestic disposable income. The Malta Chamber expects that any projected shortfall from the lower tax rates will be neutralized by better efficiency in revenue collection from both income tax and VAT.
In this regard, it looks forward to the implementation of the declared plans to amalgamate the tax departments in an effort to consolidate resources and enabling the proactive enforcement of safeguards against illegal economic activity.
Competitiveness to Ensure Growth
The Malta Chamber notes a number of measures aimed at enhancing the competitiveness of Malta’s major growth promoters that have been addressed in the Budget Speech. These are the following:
1. Entrepreneurship, SMEs and Start-Ups
• Extension of the Micro Invest Scheme for a further two years providing tax credits for productive investments. In this regard, the Malta Chamber supports the widened applicability of this scheme which was extended to include companies employing up to 20 workers.
• The creation of the B-Start scheme allowing a tax deductibility of €30,000 for those established companies which invest in a start-up approved by Malta Enterprise.
• The investment in Kordin Business Incubation Centre particularly in the promotion of ICT and digital content sectors.
• The introduction of a scheme to encourage entrepreneurship amongst youths.
2. Manufacturing
Government’s declared intentions to maintain current aid intensity levels for industry through ongoing discussions with the EU in terms of the Multiannual Financial Framework for the forthcoming 2014-2020 period.
In addition to the above, it is positive to note the continuous investment in the BioMalta campus as well as in the provision of child-care centres in a further three industrial zones.
3. Tourism
The announced €40million budget allocation to Air Malta aimed at securing air connections to and from Malta is welcomes as is the €1m increase in MTA’s marketing budget.
Furthermore, the Malta Chamber welcomes the announced fiscal incentives for the encouragement of boutique hotels in Valletta and further embellishments and regeneration projects in the Capital as well as in other parts of Malta and Gozo.
4. Property
Announced measures aimed at resolving serious anomalies currently affecting the property market particularly through the extension of the applicable period for sellers to choose between the Final Withholding Tax on the final selling price or 35 per cent on the capital gain. A further anomaly which was resolved by the Budget Speech is that pertaining to post-contract valuations by government architects.
5. Energy and Environment
The announced €30million budget allocation to Enemalta aimed at securing stable electricity rates for industry and the economy at large. Besides, it was encouraged to note the following:
• Consideration of feed-in tariffs guaranteed for a 20-year period varying between 18c-16c/unit (depending on the capacity of generation and on whether the installation is roof or land-mounted)
• Extension of solar water heater schemes
• New high-energy user scheme for Gozo
• Extension of scrappage scheme for end-of-life vehicles
• Review of car registration structure which discriminates strongly and favourably towards lower polluting cars
6. Employment and Training
In addition, the Malta Chamber commends the budget allocation of half a million euros of local public funds towards employment training programmes. The allocation, though not a sizeable one, should serve to make up for the shortage of EU funds committed to these purposes. Employee training is one sure way of boosting competitiveness.
Further commendable initiatives in the area of training and employment are:
• The extension of schemes to enhance the employability of young people
• The creation of a working group within MCESD aimed at assisting the implementation of an active labour market policy
• The establishment of a service charter applicable to public tenders and aimed at minimizing abuse in precarious employment
Missed Opportunities
Whilst the Malta Chamber identifies itself with a number of the above measures announced in the Budget, there are a number of proposals it would also have liked to see included in the Speech.
Primarily amongst these is the missed opportunity to address the COLA formula. This is required to complement Malta’s competitiveness position whilst being retained as an instrument to compensate workers for loss of disposable income due to inflation. To this end, as a matter of priority, it continues to insist that the formula used for calculation of COLA incorporates a measure of productivity as has been already agreed within the pertinent MCESD working group last year.
The Malta Chamber would also have liked to see the introduction of a voluntary scheme for business whereby operators could choose between variable energy rates or opt to fix their tariffs for a number of months ahead at a reasonable premium. It would also have liked to see its proposal accepted for the re-introduction of export-credit insurance within the limitations imposed by EU regulations.
Conclusion
In conclusion, over the coming days, the Malta Chamber shall be closely following the progress achieved in discussions of the estimates for 2013 in Parliament. The Malta Chamber augurs that there will be no actions which could lead to undue uncertainty.
This could prove to be costly for business and for Malta’s economic and social objectives.
ENDS
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The Chamber knows full well that Muscat’s voting against the budget yet telling people that, if he’s in government, he will backdate everything from April to January 1st, means that from the day the budget is defeated (10th or 12th December) to whenever a new budget is hastily presented and approved (late April 2013) economic activity in this country will be FROZEN.
What a shallow politician we have as Leader of the Opposition and what even shallower press we have in Malta who cannot see this and who are just plain mesmerised with Muscat’s ties, gel and makeup and cannot string together a few obvious questions.
Excellent points. However, ‘shallow’ does not adequately describe little Joey’s potential for harm. ‘Unscrupulous’ would be a better description, in my opinion.
When Joseph Muscat makes his budget reply speech he is expected to spill out the beans regarding his plan to reduce ultilty bills. Lawrence Gonzi made his plan known and Muscat has to follow suit.
Yeah right.
It all seems so surreal.
The budget was dead in the water as of Day 1, and yet Government feigned total ignorance of this fact. Then it dishes out some goodies it cannot (at least seemingly) get through Parliament. It then goes on to imply that it expects Labour to be responsible and get two or three of its members to vote for it. (Can it get more surreal?)
As if this were not enough, we even have the tax reductions plan well into the next legislature. Sounds like inviting someone for dinner at somebody’s else’s place.
What cheek!
You conveniently forget it to be part of the electoral programme, rendering it mandatory.
So insipid, all I have to do is look up one of your comments to the contrary.
Then there’s the dogmatic, exclusive, attitude to government, proving how ridiculous Joseph is when he implies business as usual. Fake.
Perhaps Anglu Farrugia, as deputy leader, will put our minds to rest on Xarabank next Friday.
Could we declare Tonio Fenech vici-kap ad interim, just to have him on the program?
PL Billboards:
Gonzi Promises / Muscat Delivers
Face Expressions Gonzi concerned to make the right decisions and Joseph projecting himself ( ” arawni ” ) cool expression.
http://www.timesofmalta.com/articles/view/20121129/budget-2013/Last-act-of-an-arrogant-Government-Muscat.447350
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‘Income tax rates might have been lowered for some, but keeping tax bands unaltered meant many people would actually end up being worse off, he told a news conference.’
Where’s the arrogance Joseph? He’s been gloating at the 35% thingy all the time, and now it’s arrogance, and no it didn’t, keep them unaltered ie, those have been seen to already.
Cheat. Why doesn’t he just come clear and admit to not being comfortable with what he’s just assigned himself to do?
What we should expect Joseph Muscat to tell us is not that he plans to keep the good measures in the PN budget – those measures will be implemented under a PN government.
He ought to tell us what taxes he will introduce, and what taxes he will increase, in order to pay for his pet follies of reducing the electricity tariffs when the international prices of fuels are going up, water is becoming an ever scarcer resource, as well as his refund of car taxes, among others.
Could someone kindly explain to me why Muscat insists of using the phrase “Gvern gdid” repeatedly instead of the phrase used by Sant “Gvern laburista gdid”? Is this another of his gimmicks?
The social objective should be for the minimum wage earners first and not for those in the 60,000 bracket.
Once again goverment looked after it s own.
Please Daphne don t bother to call me a laburista agian as it s getting rather stale
I
Actually, it should be for the middle-income earners.
Those above 45k pa do not need lower income tax rates. Cutting the highest income tax rate to 25% was the stupidest idea ever.
What the government should have done is introduce more brackets or raise the bar for the 35% rate, AND increased the top rate.
We need to “incentivise” (jaqq clunky English) our millionaires to invest their huge profits in their own corporations, not to hoard it for themselves. Bad move, PN. Bad fucking move.
And you know what, it won’t earn them any votes from the Okella Agius social leeches on the minimum wage.
I now understand why Joseph Muscat plans to freeze the minimum wage. That’s so that minimum wage earners will never earn a decent wage out of which they too can pay tax as a contribution to the country.
Basically, the way Joseph Muscat will reduce taxes is to keep everyone on the minimum wage, and to freeze it below the income tax brackets.
Pn A** Kissers the whole lot of you that’s what you all are. Was this budget good? at first glance definetly!! when you analyse it correctly you will start to find cracks all over. The Tax reduction will effect mostly the high earners, the Eur4 something will be used up by the announced increase in Fuel (im not mentioning cigarettes / alcohol) and Gas so basically when I start doing some maths I ended up in exactly the same situation I was before.
Let’s try to get this right.
Joseph Muscat promised he would adopt any budget measures that are deemed to be good.
Is this an honest promise or is this promise similar to the one made in the eighties that Labour government would not rule without the majority? Later that promise was explained as meaning the majority of parliamentary seats.
Could this new promise mean that Labour would adopt what looks good for the individual (meaning giveaways) or the taxes introduced to finance this budget and felt to be good for the country?
I hope new labour finds the courage to explain which budget measures would be adopted if Labour is returned to office.
One if the problems with Labour is that they have brainwashed their people into thinking only about electricity and water bills, so unless they keep on repeating this then their lot would be disoriented.
They are also lazy hence they piggyback on the government’s budget and harp about social benefits without job creation, leaving the high earners to pay for the brainwashed. It’s a dead end. How can they be a change?
I’d like to be told, or reminded for that matter, of one occasion in which an opposition voted in favour of a budget in Malta or perhaps anywhere else.
What’s good for the goose is good for the gander. If the government were truly responsible it would have come up with a ‘slender’ budget to keep the country going and not an electoral manifesto which it knew, since August, had no chance in hell to be approved.
Believe it or not I am a Nationalist voter (although you will laugh it off) but this clinging on to power knowing you do not have a clear majority in parliament for months, taking the longest parliament summer break in history and coming up with a budget on the eve of the Christmas holidays is truly irresponsible and obsession with hanging on to power.
This will undoubtedly be reflected in the public judgement when we come to vote next year. And just for the record – I still think the PN is the better option for the country but the last year has been dismal.
[Daphne – SAUCE. What’s SAUCE for the goose, not ‘good’. It means that any sauce which is suitable for a goose (female) is also suitable for a gander (male). In both these instances, the birds are cooked.]