Author: SME Chamber

THE SME CHAMBER IS WORKING TO SEEK FURTHER CLARIFICATIONS ON THE GRADUAL RETURN TO NORMALITY

The importance of saving and investing for your retirement

It is very likely that during your life you will experience many changes at different stages that will impact your wealth. You will journey from a student to employment to, possibly, getting married and bringing up a family, to retirement. These different life changes are referred to as life events or life cycle events.

During this journey there are times where you will invest – in your education, in a house, in your children; you will consume – buy your first car, experience the world; and you will save – for many reasons ranging from the need to buy a new car to building a retirement nest egg.

Of these cycles two are significantly important. The first is the need to understand the importance of saving and / or investing for your retirement. Are you aware of the income you will receive from your Social Security Pension? Does this fit in with your plans and the quality of life you want to have in retirement? If it does not, have you started to build your retirement savings nest egg so that you will live the life you desire when you retire?

Research in Malta and overseas shows that people have significant gaps in knowledge about retirement. In part this is because we, as human beings, tend to focus on the short term – we do not think long term. The consequences to you, however, can be dire if you do not integrate planning for retirement across your different life events journey.

Understanding the importance of planning for retirement alone, however, does not suffice. You need to also be financially literate so that you make sure that the savings and / or investments you accrue for different life events as well as for your retirement nest egg provide you with the rewards you wish to achieve. Yet do you understand the financial market? Do you know the risks involved when you decide – or for the matter do not decide – to save and / or invest in a financial product? Do you know your rights? Can you identify mis-selling? The consequences to you if you make such important decisions without understanding their impact is that you are likely to make a wrong decision. This may result in you losing part or most of savings and / or investment – with significant consequences on your quality of life particularly when you are close to retirement.

The Government is recognisant of the fact that whilst different stakeholders have embarked on retirement and financial capability initiatives these have been sporadic and not within the context of a coordinated approach.

In January 2017, following a national consultation process the Government launched the Strategy for Retirement and Financial Capability. The initiative was branded as ĠEMMA.

ĠEMMA is responsible for “coordinating and working with stakeholders to implement the actions presented in the Strategy” through the:

o Use of educational pathways to promulgate knowledge on retirement income and financial capacity.

o Provision of trusted and independent knowledge, education, and information to build and reinforce retirement and financial capability across the Maltese Society.

o Working in partnerships to strengthen the connections between all parties involved in retirement and financial capability.

ĠEMMA does not supplant excellent work that is being carried out by different private and government stakeholders with regard to financial capability. ĠEMMA seeks secure greater networking and synergy building across the different stakeholders, and together with stakeholders initiate activity to address gaps identified by the strategy.

Inculcating and reinforcing financial capability across the Maltese society is not only a government responsibility. It is a societal responsibility. The strategy will not be realised without the combined efforts of individuals, families, local communities, financial services providers, employers, labour organisations, businesses, NGOs, etc.

Indeed, all of the key actors are likely to benefit as a result of a strategy on retirement and financial capability that is underpinned by trust. If successful, people will be better informed of what their retirement income will constitute vis-a-vis their expectations, of improved decision-making on savings and investments, of reduced regulatory action and loss of trust in financial service providers due to mis-selling, fraud, and abuse.

Additionally, such an approach is more likely to result in a collaborative partnership that allows confidence to build as the parties work together, explore emerging trends, generate new ideas, and achieve better understanding of the challenges and issues faced by one another.

The SME Chamber congratulates the Prime Minister and the Minister for Finance

While combatting the effects of Covid, Malta was also fighting another important battle to stay off the Moneyval grey listing. It is therefore even more exceptional that during a crises of the extent of Covid Malta managed to achieve such an important result.

The Moneyval opinion, tough not the final one, was awaited with great anticipation by the Chamber of SMEs. A negative opinion would have led to catastrophic consequences on our economy and this catastrophe has now been averted.

A positive outcome such as this one is documented proof that Malta has turned the page. Whilst scrutiny will continue and so will Malta’s efforts to keep up progress, the positive position of Moneyval in relation to Malta’s report goes a long way in addressing the serious shortcoming our country has lived through in the recent past.

The SME Chamber congratulates the Prime Minister and the Minister for Finance on this positive achievement.

SME CHAMBER PLEASED TO SEE NUMEROUS PROPOSALS PUT FORWARD COME TO FRUITION

The schemes that have been announced today are welcome and will provide very needed assistance for businesses to start the gradual recovery from a stronger position.

The lengthier presence of the virus has meant a longer period of great difficulties and uncertainty for businesses. A full year of turbulence and exhaustion of resources has increased the level of vulnerability for businesses making the beginning of 2021 very difficult to bear.

With the very positive health developments and an economic recovery plan in front of us, businesses are eager to restart their recovery as soon as possible. As the Prime Minister rightly said, the Covid support schemes were crucial for the survival of businesses yet nothing can replace the actual return to work and business generation and that is what businesses want and need.

The schemes announced today are the result of intense consultations and numerous meetings with different sectors to assess the Covid impact and their specific needs. Most of all however what was announced today is an attestation of the strong will to support businesses and we thank the Minister for Enterprise, Dr Miriam Dalli, for her and her Ministry’s positive attitude to listen with genuine willingness to help businesses weather the Covid crises.

The proposals presented by the SME Chamber, which have materialised today are:

–    Extending the Rent Support Scheme

–    Extending the Electricity Support Scheme

–   Direct cash injection for businesses affected by extended closures

–    Opening business re-engineering and transformation scheme to include self-employed and micro enterprises (previously ineligible)

–    Guided investment schemes with aggressive aid packages

–    Policy direction for new economic niches

The proposals announced today target various pain points for businesses but also encourage investment. Investments might sound difficult at the moment and that is why the level of aid intensity will be aggressive to complement their needs. It is essential for businesses to take an inward look and the SME Chamber will assist members to make sure they benefit to the maximum to strengthen their resilient and become future proof.

It is now essential that the positive health condition is preserved and caution continues through the gradual recovery. The SME Chamber calls on all businesses and society in general not to let the guard down because business and employment depend on good health results.

No level of assistance can replace the normal functioning of businesses and this is the balanced goal the country should continue working towards. Some sectors qualifying as high work have so far no re-opening target, it is critical that we keep moving ahead to enable all sectors to restart.

The SME Chamber will continue actively supporting these sectors with its work.

Non-essential shops and services will be re-opening after 7 weeks

As tomorrow, non-essential shops and services reopen after a seven-week shutdownThe Malta Chamber of SMEs would like to wish the best of luck to all businesses re-opening their doors.

The following will be re-opening tomorrow:

Malta To Reopen Restaurants till 5pm On 10th May, Weddings to start on 1st of June in line with protocols

At a press conference on the COVID-19 situation, a day before non-essential shops and services reopen after a seven-week shutdown, the Prime Minister revealed plans for another easing of restrictions.

The Government insisted that non-essential shops and services reopening tomorrow must continue to follow protocols.

Prof. Charmaine Gauci esplained that for the clothing sector, changing rooms can be used but the operators must sanitise the room and clothes tried on must be ‘quarantined’ for 72 hours.

Malta To Reopen Restaurants till 5pm On 10th May

Malta will reopen restaurants and snack bars on 10th May, but they’ll only be allowed to serve diners until 5pm, Prime Minister Robert Abela announced.

A maximum of four diners will be able to sit down at each table.

On the same day, training for professional contact sports can re-commence, and non-contact sports can start again but with no spectators. Arts, educational and extracurricular activities, as well as doctrine lessons will be allowed to continue and open-air markets will be allowed to reopen.

Restrictions on travel between Malta and Gozo will also be lifted.

Measures will be relaxed on May 10 as follows:

• Contact sport training to resume;

• Non-contact sport to resume without spectators;

• Extracurricular events to resume;

• Open markets to resume;

• Restaurants and snack bars to reopen up to 5pm;

• Restrictions on travel to Gozo to be lifted.

Weddings:

The Governments plan is that weddings can be held on June 1 although guests must be seated and strict protocols must be followed.

Guests, for instance, must be seated with tables of up to six people unless people are from the same bubble. Outside venues will be capped at 300 people, and inside at 100.

Health Minister Chris Fearne said protocols by the health authorities, including wearing masks, had to be followed as measures were eased.

The Government did not annaunce when bars and gyms will be allowed to reopen.

Throughout the Covid-19 Pandemic, businesses worldwide have issued several reports on how these businesses are surviving during such uncertain times of restrictions and national lockdowns. The recent report that has captivated the business world is the recent report issued by the Low-cost giant retailer – Primark.

The retail giant Primark reported that the number of people who have physically visited the retail stores has skyrocketed after the recent removal of several restrictions imposed by the British Government to reduce the spread of Covid-19.

Primark stated in its report that its stores had declared record sales after more than three months of lockdown. The company also stated that it had made no concessions towards shifting its business towards an online platform but decided to remain on lockdown and withstand the impact. For Primark, withstanding the impact meant that the company had to lose around €1.26 Billion in lost sales; however, its recent gains have given the company rejuvenating hopes that it is back on the right track after recent British lockdowns.

With Malta’s non-essential shops and services due to reopen following Monday, 26th April, after almost two months of shutdown, Maltese businesses are hopeful that this ‘Primark’ effect will also happen for their business as reports from Maltese businesses are stating that Government aid during this pandemic barely covered certain businesses’ expenditures, with businesses also reporting that they had to let go of several employees in order to remain in business.

Therefore Maltese businesses are currently hoping that when they reopen, their business will once again be able to get on the right track and make ends-meat again.

“The wedding sector needs to know which factors will determine whether or not weddings will be able to take place”

The wedding sector has been hit very hard by Covid. The industry and the couples getting married have been living through a wave of great uncertainty with continuous postponements and cancellations of weddings since the start of the pandemic.

This sector has been recently closed once again exactly when the 2021 wedding season was due to start, in line with the heightened Covid restrictions. This meant that all weddings booked for March, April and May – three of the most important months during which this sector to work in – could not be held.

This served a devastating blow to the sector, which was already in an extremely vulnerable state, following the impact Covid had on their 2020. Apart from mass disruption, this sector had to invest further to comply with the restrictions and stay constantly updated and stocked for when weddings restart. The SME Chamber is currently in active discussions with the authorities to mitigate the impact of the great damage this sector has suffered.

It should be noted that a wedding is not like any gathering. Apart from the fact of having many strict guidelines to adhere to, weddings are very important for the healthy functioning of our society. They represent among the most important of days for the couples and their close relatives and friends. Weddings are important milestones for our families and within our society.

Looking forward, what is known so far in the public domain is that there is a potential that weddings might be allowed to take place as of 1st of June. This uncertainty has once again landed weddings into chaos, not having any parameters to base upon from 1st of June onwards.

The wedding sector needs to know which factors will determine whether or not weddings will be able to take place.

During the period weddings were allowed to take place last year, covid cases fluctuated and there was no vaccine in sight yet. The experience the health authorities have gained during 2020 should enable them to set out a clear plan of what will be acceptable and not under the Covid circumstances known to all.

By the 1st of June Malta will be even closer in reaching herd immunity and therefore this should give greater reassurance to the health authorities that the situation can be planned for and managed.

The health authorities are being asked clearly to disclose what is the determining factor on which they will base their green light or otherwise on.

With just over a month away from the 1st of June, with so much planning that goes into a wedding, wedding suppliers and their couples cannot be left in this precarious situation.

The Malta Chamber of SMEs would like to invite you to a webinar that will give an overview on the latest updates on the following Covid Incentive Schemes: