Author: George Mangion
Published on Business Today on 22 April 2021

The onset of the pandemic has seen a number of politicians ignoring the spread of the virus and almost ridiculing its potential disruption to their respective economies.

We can start with Donald Trump in the USA, followed by Boris Johnson in Britain, Netanyahu in Israel and locally Robert Abela. Last week, Prime Minister Robert Abela stressed with the party faithful the importance of enjoying summer and opening of the airport and seaports in aid of mass tourism, highlighting that the coming weeks will define the future of the country.

He expressed his wish that Malta health authorities will by the end of June, have administered vaccine doses to 70% of the adult population. His wish was driven by his boisterous drive to reach “herd immunity” which sharply contrasted by vain wishes last year that we can throw caution to the wind ( waves are only in the sea ) and all can enjoy summer.

Recently, his ambition mellowed down as he faces a beleaguered economy with the largest deficit recorded since Independence. Gone are the days of glory when his predecessor (Joseph Muscat) reined over a surplus and offered full employment. Now the penny has dropped and he laments the decimation of the tourism cow (this was milked to the extent of €2.2 billion annual yield in 2019).

Realistically his wishes, reflect a stark reality with 100,000 jobs on the drip paid by Malta Enterprise on an extended furlough. Recently he announced on One TV..quote “If we lose a summer of tourism, the country will have problems.” Reality checks have shown us a different story.

In fact, the Association of Catering establishments (contrast views by MHRA) did not mince words when they said…quote “all catering establishments claim that less than 35 per cent of their employees receive wage supplements given the staff  turnover meaning restaurateurs are financing the remaining two-thirds while enduring eight months of decreased sales.” The dichotomy in the approach to nail the problem reminds me of one of Aesop’s fables.

This tells about an old man gathering branches in the forest who had travelled a great way under a huge burden of sticks and having found himself so weary, that he cast it down, and called upon Death to deliver him from a more miserable life. Death came presently at his call and asked him his business. Pray good sir, says he, do me but the favour to help me up with my burden again. He miraculously changed his mind and asked Death to help him lift the sticks rather than deliver him from his painful life.

The moral is clear to see, be careful wishing for something you may come to regret – be careful what you wish for, lest it comes true. Could it be that politicians in their quest to retain popularity ignore the tell-tale signs of the Covid calamity and promise sunshine and a relaxed summer?

Sometimes they spontaneously make promises without thinking them through or considering what the outcome might be. While the wish to attain instant normality pleases the electorate, the consequences of ignoring the second wave (or the third one) have taught us a hard lesson – that many lives were lost.

We set in motion a desire to ignore health warnings only to realize later on that it isn’t what we want and we try to act contrite by fast forward the inoculation hurdle. After having suffered a resurge in infections last winter (a daily record exceeding 500) we are planning to fast forward inoculation.

What we have omitted in our wish is that opening on 1st June to all travellers may invite more infections, should the third wave of a potent South African variant plays havoc with our defences. The health authorities plan to allow restaurants to reopen by mid-May but bars and band clubs will remain shut for longer under a yet-to-be-announced timeline to further ease COVID-19 measures.

Under the proposals, all local licensed entities in the tourism sector will be eligible for a grant of up to €25,000 marketing grant per year for the first two years of the post-COVID recovery period. The prime minister is also recommending free tourist COVID-19 testing hubs, two in Malta and one in Gozo and that all employees in the hospitality industry should be fully vaccinated by June 1.

While permission for rave and pool youth parties are not anticipated yet the authorities are mindful that heavy online advertising of these activities is underway by local and foreign organisations. These activities were permitted last summer and have been the harbinger of an explosion in the number of infections this winter.

Do we ever learn from mistakes? The Opposition spokesman appealed for the government to have energy and water bills cut by 50% and for establishments exempt from paying their contribution to the Tourism Authority this year.

Additionally, he said, added that as a lot of self-employed and small businesses are dependent on the tourism and hospitality industries, the government should reduce vat to 7% on the sector from the present rate of 18%. Such a reduction in taxation has been requested ( but ignored ) over the past years to equate our taxation with rates charged by neighbouring countries.

Such claims have fallen on deaf ears ignoring a survey by PKF Malta and the Association of Catering Establishment (ACE). The latter found that 26 per cent of the 2000 eateries were considering closure. This year, since March due to the spike in Covid cases all restaurants have been shut down for the second time throughout the pandemic.

Data compiled by ACE found that during a year to March 2021, some 19 per cent of establishments had closed down, on top of another 12 per cent of restaurant owners who had put their operation up for sale or rent.

Sources close to the health authorities indicated that restaurants may be able to open by mid-May, however official dates have yet to be announced. The association said such dire sentiments were being driven by decreased sales and unsustainable costs. It said Covid relief measures had been positive at the outset and but had not been adequately implemented while some restaurateurs had reported mental health issues caused by acute solvency problems.

The wish of ACE is to immediately reopen restaurants, issue cash vouchers, reduce vat and maintain a full wage supplement until the end of the year.

In conclusion, we can learn from Aesop’s fables to be careful what we wish for. In the context of problems inflicted by the pandemic, it is better to be wise by the misfortunes of others than by our own.

Author: George Mangion
Published on Business Today on 22 April 2021
Get in touch: info@pkfmalta.com