‘Business is returning to normal’: Government wage supplement set to expire next week

The wage supplement, the most widespread (and expensive) form of Government assistance extended to businesses during the COVID-19 pandemic, is set to expire by the end of next week as the economy slowly returns to normality.

The scheme, through which the Government pays a part of the salaries owed to companies’ employees, has been widely hailed as a lifesaver for many businesses, and an essential pillar of Malta’s economy during the economic downturn experienced as a result of the pandemic.

The wage supplement is disbursed based on a tapering system, with worst-hit companies in terms of revenue receiving the full €800 monthly supplement per employee.

Unemployment has been kept low – the lowest in Europe and lower than it was prior to March 2019, when the virus hit Maltese shores, by enabling businesses to hold on to their talent, something that became more critical as the months rolled on and labour became ever more difficult to source.

Although it has been extended repeatedly, the wage supplement seems to be reaching the end of the road as April comes to a close

In January, Prime Minister Robert Abela promised Malta’s business community that the COVID-19 wage supplement will remain in place “for as long as is necessary”, but also warned against dependence on the scheme.

“We need to incentivise innovation. We want to discourage dependence. Good times are ahead. We took a calibrated approach,” he said at the time.

In recent months, the wage supplement has been of particular assistance to the hospitality and catering industries, which were very hard hit by the restrictions introduced to combat the spread of the virus.

One industry insider, speaking to BusinessNow.mt, said that after wide consultation, Government seems committed to ending the scheme.

“Most restaurants stayed afloat thanks to the supplement,” he says. “Now, fingers crossed, business is returning to normal.”

However, another industry insider was of a different opinion, possibly indicating confusion or a lack of clear communication with the sectors.

“Officially, we have not heard that it is stopping,” he says. “So my understanding is that we will see it continue for another month. The sooner this is announced, the better.”