Gov’t Responds to Private Sector concerns on COVID-19 Employment Stabilization Payment

The Government through the Ministry responsible for Finance and Economic Management yesterday officially issued this statement in response to various concerns raised by the private sector in the Daily Post Issue No# 6018 of 2020 and the Leader of Opposition during a press conference held this week.

Regarding the announced eligibility criteria for the COVID-19 Employment Stabilization payment, the statements made, mainly from the private sector claim the following:

• That some 81% of businesses are likely to lay off their employees and close down because they are not eligible to receive the Employment Stabilization Payment.

• The Vanuatu Media Association, also calls on the government to reverse its decision on the eligibility criteria for the Employment Stabilization Payment so they can also be qualified,

• The SHEFA Port Vila Land transport Association also want a share of the overall Stimulus Package respectively.

The Ministry of Finance and Economic Management wishes to reiterate that despite these criticisms, the eligibility criteria is still mandatory.

The criteria is essential to guide the implementation of these payouts and for the government to ensure a more equitable distribution of financial support to the most affected groups and employees.

The criteria will also help the Ministry and the Government be accountable to the public and the funding agencies for the use of funds towards this stimulus package.

While most business sectors are directly affected as a result to the COVID-19, a few others are still able to operate effectively.

Having said this, it is important to make it clear that the Economic Stimulus Package (ESP) is broken down into several components of which the Employment Stabilization Payment is one major one. Other components in the package should cater for those businesses that do not meet the Employment Stabilization Payment criteria.

The government in its decision No. 16 of 2020 announced the following components within the Economic Stimulus Package;

1. The Employment Stabilization Payment

2. The School Tuition fee subsidy (Education Sector),

3. The Small and Medium business enterprise grant package (SMEs),

4. The Commodity subsidy (Agriculture Sector)

5. And the Shipping Subsidy (Shipping Sector).

Additionally, the government has also approved for the Ministry of Infrastructure and Public Utilities to fast-track various outstanding projects (worth 5 billion) that could in turn provide employment for other sectors that are affected particularly in the construction and the Infrastructure sector. Tender requirements have been softened to allow for an ease in the overall procurements process.

The Ministry of Finance will continue to ensure that VAT refunds are paid in a timely manner to tax payers and that ministries must fast track payments of outstanding LPOs for suppliers so this can support their operations during these difficult times.

The government has also announced cancellations of various taxes for 2020 namely Road Taxes, Work Permits, Business license (other than commercial banks), Residence permits and Rent Taxes. One could conclude that in general the government is already giving a huge amount of assistance to the private sector and they should appreciate the support they receive from the government. Recently we have also witness a decline in world fuel price and this can also benefit the overall transport sector.

The Ministry is working closely with all the relevant agencies and authorities to collect the necessary information required to facilitate the implementation of the other components of the ESP. All businesses are advised to work together with the government through these times and ensure they have the right information before making speculations that can only jeopardize the efforts and the working relationships between the government and the private sector.

The Minister of Finance and Economic Management, Johnny Koanapo and the ESP Team met with a delegation from the private sector yesterday, Friday 15th of May 2020, in which both parties have agreed to work together in reviewing the applications as situation continues to unfold during the payout and ensuring that the overall economic stimulus package is implemented in the best interest of both parties.

The Government wishes to remind the entire business sector that only the Council of Ministers has the final authority to make any policy changes to the announced Economic Stimulus Policy.

To date the government still maintain its position to only address the mostly affected business category beginning from March to June and the eligibility criteria for just the Employment Stabilization payment has greatly assisted the government in making this a reality.

If a particular business does not meet the eligibility criteria, they can still lodge their application through VCCI and the Ministry will work together with VCCI to certify their eligibility for the Employment stabilization payment.

They can still benefit from the other packages. This Economic Stimulus package is inclusive in its entire design and should be able to assist all business in one way or another.

The Government wish to assure its business sector that it will still review the announced economic stimulus in light of the recent developments of the COVID-19 after June, to determine what policy direction it will have to take after that.

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