After the unprecedented measures that the government has launched in the past weeks, a series of new measures to boost public spending was announced today by Prime Minister Robert Abela. These are intended to preserve the economy and are targeted and tailored to the circumstances we are currently in and which will cost the country € 900 million.
The main goal of these measures remains to safeguard jobs and keep the economy moving forward by creating a “feel good factor”.
The Prime Minister said that as far as the pandemic is concerned, the numbers have now dropped substantially, and the intention is to strengthen the economy. This is because the economy has been hit by a decrease in demand from abroad.
The first of these measures is to help businesses that have experienced a decrease in turnover in recent weeks. The aim of the measures is to help businesses address costs. The second measure deals with the need to increase consumption. The third aim is to address the supply side. The document published by the government announces a plan in which our country will spend no less than € 400 million, an unprecedented expenditure to strengthen the productive sector of the country.
One of the biggest measures announced in this regeneration plan is the one related to the ‘wage supplement’ or as it is better known as the € 800 grant. It will remain in place for the month of June. It is then expected to be divided into three stages. Hotels, leisure areas, language schools, travel agencies and airlines will remain receiving € 800 until September.
On the most part, for the months of July and August and September those eligible will receive € 600 and for others for whom demand has rebounded, these will fall on Annex B which means € 160.
Electricity bills for businesses
From what was announced in the regeneration plan, for the months of July, August and September, the cost of electricity for businesses will be reduced to 50% up to a maximum of € 1,500. This measure will cost € 30 million. It affects those affected by the Wage Supplement.
Business rent subsidy
From the regeneration plan, it appears that as far as rents are concerned, those businesses that are under Annex A and Annex B will be able to apply for a rent subsidy up to a maximum of € 2,500 each. This means that between electricity and water bills and rent, applicants can avail of up to € 4,000 per business.
Fuel to be reduced by 7c
Government will be making substantial reductions in the price of petrol and diesel. This is a measure that will greatly benefit consumers. The plan states that there will be a 7c reduction in petrol and diesel from Monday. The price of diesel will fall from € 1.28 to € 1.21 while petrol will fall from € 1.41 to € 1.34.
€ 100 in vouchers per person over 16 years
With the aim of providing incentives to increase domestic consumption, which has decreased substantially in recent weeks, the plan will be giving € 100 to each person over the age of 16. These vouchers will be converted into € 80 to be consumed in accommodation, bars or restaurants and the other € 20 to be consumed in businesses that have closed due to Covid-19 restrictions. A family of five will receive a total of € 500.
Inwork benefit measures
It follows from the plan that the threshold will be raised and the rates given per child will be increased. A special supplement of € 250 will be given to each family.
33% refund for hauliers
The plan also states that the Government will reimburse 33% of port charges to those ships that bring cargo to the country but are not involved in trans shipment. A 10% refund will also be given on container charges schemes for both export and import but not trans shipment.
Measures to help export
Regarding exports, the plan states that to reach new markets a budget of € 400,000 will be allocated to Trade Malta to reimburse costs up to a maximum of € 10,000 to local businesses that want to invest in digital promotion in foreign markets. In addition, Trade Malta will also reimburse 80% of the costs to companies that will be participating in international fairs but which have been cancelled.
It is clear from the plan that there will be a tax deferral again. As far as social security contributions and workers’ taxes are concerned, those will start to be paid from 1 July. This means that income tax and social contributions from those workers must be paid. The plan is to extend business taxes to the end of August.
Payment of these deferrals must be made by May next year. There will be no interest or penalties. These involve no less than € 200 million.
Stamp duty on property will be reduced both for buyers and sellers. The rate will decrease from 5 to 1.5% for the buyer. For the seller it will decrease from 8% to 5%. These rates will be applied to the contracts that will be signed between now and the end of March. This applies to any existing promise of sale.
This measure is for properties of up to € 400,000. For those who are not buying property for the first time, these measures mean a € 14,000 discount on stamp duty.
This plan also caters for those who have postponed weddings. For those who have postponed their wedding and incurred additional costs there will be a refund of up to € 2,000.
Economy Minister Silvio Schembri explained that due to the substantial number of measures it was not possible to provide all the details related to these same measures. He said that more details will be announced on how to benefit from these measures in the coming days. In addition to a helpline that will be launched, Schembri said that Malta Enterprise will also be providing more information on the eligibility of these measures.