The Association of Catering Establishments (ACE) has engaged into various studies and surveys in order to come up with a number of Budget Proposals. The Proposals are aimed to overcome the current situation whilst looking into the long-term growth of this important sector to the economy.
The sector is probably one of the largest in the Maltese Economy with approximately 3,400 establishments registered with the Malta Tourism Authority (not including Police Permits). In accordance with the National Statistics Office the sector contributed to the economy some Euro 380 million in 2018 and Euro 325 million in 2017. Pre COVID 19 the sector was on a constant growth improving its services whilst continuing to invest. The sector pre the pandemic was estimated to give employment to more than 20,000 persons.
The effect of people fear and the effect of uncertainty in income is certainly being felt from a consumption perspective. The wage supplements and the vouchers were surely critical in ensuring the survival of many establishments. Indeed, our surveys indicate that on average 60 percent of the sales in restaurants up to mid-August was through the Government COVID 19 vouchers. This was in a period when usually it is considered as the busiest season. Consequently, it comes natural to address the challenge ahead of us which is the cold season whereby there are even less tourists and whereby outdoor dining shall not be possible on most days.
In this context, we would like to propose the following Budget proposals:
Extension of existent assistance
1. Wage supplements should return to Euro 800 per employee per month and extended up to April 2021. In February 2021 a review of the situation is to be conducted in order to decide the extension or otherwise of the supplement. One should also consider wage supplement for employees that are employed in substitution of an employee who resigned;
2. The Government should issue further vouchers with immediate effect in an attempt to boost again the economy. As aforestated, the use of the vouchers was a determining factor for the survival of the sector. This comes even more evident when one considers that as soon as the vouchers effect started to fade, the restaurants immediately reported a significant drop in sales. The immediate reissuance of vouchers will assist consumers to ensure that the impact of consumption in the festive season is mitigated allowing the Maltese people to enjoy this
period in spite of the income uncertainty. The Association is ready to engage with government in a discussion to launch a scheme whereby private enterprise issue vouchers as well;
3. The Malta Development Bank scheme should be reviewed in order to truly assist businesses in need. Businesses in difficulty were to date not able to benefit from this scheme;
4. Discussions with bank should start for a possible longer term moratoria;
5. Deferment of Taxes should be allowed again for the winter months.
Water and Electricity
1. The water electricity rates for Restaurants should be reviewed from Commercial Rates to Domestic Rates;
2. Arms Limited should not take any action for delay in payments during 2020;
3. All penalties and interest should be waived for 2020 and 2021;
1. In view of the reduced outdoor dining and in order to be able to increase number of covers indoors, an incentive for catering establishments that are willing to invest in Perspex and other protective measures between tables in restaurants should be issued. Furthermore, social distancing between tables should be removed if the said Perspex and alternative measures are implemented. The same protection for consumers may be achieved through these measures however, allowing for more indoor dining places;
2. There should be intervention by Government on the rents matter. The measure put in place by Government has assisted businesses however, in certain circumstances this is a major burden which is rendering the operation unsustainable. The Association had already submitted its proposals in agreement with the Malta Developers Association. In substance the government may waive the tax on rent if the landlords reduce their rent by at least 50 percent;
Long Term Measures
- Review of the Work Regulation Order related to the employees in Restaurants which brings the same level playing fields for independent restaurants and Hotel Restaurants. The current scenario whereby an employee with the same type of work on the same day and the same number of hours is paid differently is to say the least discriminatory. The ACE proposes an urgent review of the said regulation order that promotes equal pay for equal work and that promotes fair competition.
This is an important sector in terms of employment generation, services rendered and the tourism experience Malta offers. ACE believes that the propositions above will assist the sector to go through the next challenge being the cold season while also looking forward to being more competitive in brighter times.
The ACE believes that with continued coordination, collaboration and a sense of goodwill between the Government, the Employees, the consumers and the catering establishments we can together walk towards a more positive 2021.