Author: SME Chamber

Download the full survey document here

GRTU’s 2015 Business Performance Survey shows an overall positive result which to a great extent reflects Malta’s economic achievements. This is especially when considering an increase of over 10% of respondents reporting improvements over last year, when compared to the feeling expressed by enterprises in the 2014 Business Performance Survey.
In 2015, the positive feedback submitted by businesses supersedes the negative feeling both when businesses assess their overall performance and their sales during the festive season.

GRTU however believes that the figure of 25% of total respondents reporting a negative going of business is not an insignificant one and merits a thorough analysis to assess what the underlying issues causing this disparity are. GRTU is also not satisfied with the 27% of enterprises that felt that they remained in the same situation of last year because the economic performance of the country should have translated into improvements across the board.

Enterprises outlined a number of factors that they felt contributed directly to their overall performance in 2015. Interestingly, even though the results of the survey are generally positive, respondents mention a higher number of negative factors and some elements are even cited by businesses as having had a negative contribution while others attribute the same elements to their positive performance.

An extended period of good weather was frequently mentioned as having had the strongest positive impact on the going of their enterprise because people were encouraged to go out and shop. The weather was however also seen in a negative light by businesses that do better when the weather requires the thicker clothing they sell. Another main positive factor was the successful strategy adopted by the enterprises themselves, including advertisement and promotion strategies, good customer care and the selection of products sold. Consumer spending power was also said to have contributed towards positive business performance.
The negative comments were both numerous and familiar, with competition being the most unfavorable factor reported. Enterprises complained about too many businesses competing for the same consumers with the same products, driving down profitability; however their complaints also include the ever-increasing challenge posed by online shopping as well as unfair competition. The issue of unfair competition is affecting businesses in all sectors. This ranges from imports that are evading taxes, the sporadic issuance of licensing and the unsustainable enforcement efforts of the authorities.

Traffic, roadworks and parking were also very common sources of complaints with a vast number of respondents arguing about lack of sufficient parking facilities in many localities, accessibility issues in Valletta, the need to increase loading and unloading bays and the need to utilize wardens to help rather than castigate.
Insights into the festive season show that the best time for business sales was Christmas Week (21st – 27th December). The introduction of Black Friday sales (27th November) were reported as a successful initiative despite takeup by businesses may have been low in its first year. As one may expect, January has been so far a slow month for business.
The survey further resonates issues and concerns which GRTU has been honing about. There is a clear need for a stronger environment towards boosting competitiveness such as initiatives to help businesses go online. One point which continues to surface as a stumbling block for outward online shopping is excessive postage costs to sell abroad. Running costs also need to be diminished to encourage competitiveness. GRTU’s call for reduction in utility tariffs would definitely be of great support to this end, allowing businesses to instead be in a better position to invest and innovate.

Access to finance remains largely an unaddressed business concern with the survey referring to bank interest charges. Administrative burdens and bureaucracy also hinder business growth.

Setting an outlook on expectations for 2016, a good 34% of businesses reported intentions to expand over the next year whilst only 5% reporting downsizing expectations for the upcoming year.

GRTU – Malta Chamber for SMEs supports all calls and initiatives towards social integration of persons with disability and it is pleased to note an increased uptake of employment of persons with disability by the private sector.

Announced in the Budget 2015 Speech, the re-invigoration of a dormant legislation of having a minimum of 2% of employees being persons with 

disability for businesses with at least 20 employees, has led to an encouraging increase in employment of registered disabled persons (RDPs). Data made available during an MCESD meeting by the ETC Chairman shows that the private sector, above the 20 employee threshold, is employing over 350 RDPs.

GRTU believes that the private sector is showing its willingness to support this initiative not just because it is legally obliged to do so but because it also values its return. There are in fact 700 enterprises that even though not obliged by law, still employ people with disability and this does not include the employment of people with disabilities that are not registered in official national registers and are therefore not taken into consideration by the law.

The employment of persons with disability should not be seen as a mere statistical exercise or push employers into an easy way out of paying a contribution instead. It should be a hand-in-hand approach with employers to look into the needs of the specific business operation and how those persons with disability who are looking at participating in the labour market are matched through a process.

GRTU has over the years welcomed initiatives and incentives that encourage employers to find the necessary support to reach out and bridge persons with disability into the active labour market.GRTU often acts as a point for outreach towards bridging employers and businesses to policy implementation and initiatives.

The implementation of this legislation could have been handled far better. GRTU was in fact disappointed that ETC did not feel the need to consult with social partners before reactivating a law that was introduced in 1969 and never implemented. GRTU expected ETC to place greater emphasis on the several incentives already available to positively encourage employment and assist them directly in finding an individual that matched their employment needs.

Sending out of invoices to employers without proper consultation and hand-holding for implementation would only result in counter-productive exercise to the message of social inclusion. This would portray the need to integrate persons with disability as a burden or a form of bill whereas the spirit should be one of understanding business needs and matching the capabilities and potential of persons with disability with specific job roles, just as in any other case.

Having said this, GRTU feels that ETC has now recognised its pitfalls in the implementation process and looks forward towards a renewed approach which recognises issues faced by the private sector and which has fine-tuned its methods to better support employers. As a result GRTU welcomes ETC’s decision to waive the contributions due by employers should they become compliant with the law.

GRTU believes that much more can be done in terms of close cooperation and partnership between the public and private sector when it comes to inclusion of persons with disability. Employing a person with disability should never become a burden on the enterprise and the Government should do its utmost through a tailor-made approach, hand-holding and the use of support schemes to facilitate the process.   

Following a meeting held earlier this week with Enemed Chairman Kevin Chircop, GRTU presented its arguments as to why the Unleaded Super Fuel should be distributed widely amongst fuel stations and therefore the stations interested should be given the opportunity to sell the new product.

GRTU is pleased to announce that following this meeting an agreement was reached whereby all fuel stations that express their interest in selling the

 Super Unleaded Petrol will be supplied as soon as the necessary preparations are completed from the fuel stations’ end.

A list of the fuel stations that would like to be supplied with the Super Unleaded Petrol has already been passed on to Enemed.

GRTU and its members have the same interest of Enemed, of pushing the new product and have it effectively penetrate the Maltese market.

GRTU would like to thank Enemed for accepting GRTU’s arguments and providing equal access to all fuel stations. GRTU also thanks Minister Konrad Mizzi for his intervention in the matter that was instrumental in facilitating discussions and finding an amicable solution.

There is no question of whether improvements in the safety standards of entertainment establishments across the islands are necessary or urgent.

The current scenario that we have on our hands today was created by a 

number of contributing factors emanating from the industry, the authorities and also, to a certain extent, the individuals that frequent these areas of entertainment.

Most of what we know today is no news but realization about the real underlying issues were brought about by an unfortunate incident that shook the country and placed everyone in a sudden state of urgency. The reactions have been immediate and in certain cases rash, but everyone needs to take his own responsibilities with regards to the current state of affairs. Pointing fingers will only cause further deterioration and will not contribute to the vision we collectively aspire to.

What is of paramount importance is that the areas that are mostly frequented by our youths are safe. But let us not fool ourselves into thinking that this starts and ends with stricter compliance on the establishments. The security issues that exist require a wider approach that necessitates that all the stakeholders work tightly together.

GRTU has brought the main parties together to initiate dialogue and consultation. This we believe will address both the immediate issues and also help us reach the medium to longer-term goals we should aspire for in the future.

The reality is that tourism is a main contributor to Malta’s GDP and while safety can never come second to anything, a sudden aggressive and blanket approach can harm the industry that is a main tourist attraction significantly.

The goal must never change but there are different ways how to get there. The quick and rash can be shortsighted.

In a dialogue session organized by GRTU with Minister for Home Affairs and National Security Carmelo Abela, the Minister stated that while we need to send a serious enforcement message on Paceville, to succeed all stakeholders involved including the private sector must act in unity.

This followed another meeting organized by the GRTU between the MTA and the private operators related to compliance issues and licensing.

From the sessions held it became evident that both the industry needed a better understanding of the laws they are subject to and how they can comply and also that the regulatory framework needs clarifying and strengthening.

Through these meetings, GRTU is enhancing the effectiveness of a platform which sees policy makers and the people that work on the ground, working together to understand each other’s realities and devise a way forward.

Underage youths

GRTU feels that Government has so far only tackled the easiest way out by drastically increasing the fine on the establishment when underage youths are found inside. GRTU once again believes that the responsibility must be a shared one.

From a regulatory aspect, the licensing regime is in need of an overhaul because, for instance, while underage youths cannot enter a nightclub, they can enter a bar as long as it doesn’t serve alcohol.

There is also an issue of controlling demand. A deterrent needs to be placed at both ends, not just on the establishments that are trying to keep underage youths out but also on the underage youths themselves that are trying to get in. Both need to have something at stake and made to carry the responsibility of their actions. This we believe will be much more effective.

Self-regulation

The industry has not been indifferent. The incident itself served as a wake-up call for many entrepreneurs in the leisure industry, lending to a new wave of self-regulation. Self-regulation does not mean doing away with neither regulation nor inspections but it focuses on empowering those that need to comply with the laws with the necessary knowledge, skills and resources to be successful in their daily business activity.

GRTU believes that, even though important, enforcement is both difficult and costly. A self-regulatory approach would lead to fewer requirements for enforcement and the industry and the authorities  would work closer together.

Upgrading security measures

GRTU is helping the industry explore new avenues that would help them in their compliance and minimize human involvement and error though the automation of systems. This would not only greatly help the industry in coping with the influx of people and being better able to control the numbers more effectively but also help the authorities with issues such as headcounts, etc…

• Chauffeur-Driven
• White Taxi Service
• Coaches (Unscheduled Bus Service)
• Cargo Hauliers
• Express Freight (such as Courier Delivery Service)
• Airfreight Forwarders
• (Essential) Goods Distributors (such as Gas, Milk, Bread)

1. Stronger consultation and planning to mitigate unnecessary burdens such as closing off periphery projects, widespread awareness of closures and diversion routes, and devising acceptable diversion routes for the duration of projects. 
2. Traffic has to be channeled to secondary roads to reduce clogging where possible. 
3. An ongoing stock-take of possible improvements and suggestions in various localities, including Paceville, Swieqi, San Gwann/Kappara, Qormi, Marsa, St Venera, Zebbug, Luqa.
4. Authorities that close roads need to communicate and coordinate together in practice. 
5. A Driver on Delivery Card similar to the Doctor on Call concept needs to be considered.
6. 24/7 Use of Roads and Off-Peak Times (Road works, landscaping works, waste collection and other)
7. Widespread Educational Campaign
8. Enforcement that ensures Loading bays are not left occupied, buses use the appropriate bus-stop stations and upgrading subways
9. Clearer understanding of the use of the newly installed Priority Lanes so as to ensure full usage by chauffeur-driven cars, white taxis, buses, coaches, motorcycles and even private vehicles carrying three or more passengers. 
10. Increase of Boarding / Loading Bays in key areas such as business hubs (Valletta, Sliema, Paola, B’Kara, etc.). 
11. Unused parking facilities and private parking facilities need to be put into use. It no longer makes sense to have development getting away with not planning adequate parking facilities. 
12. In view of the previously announced logistics hub concept, one may even consider organized local combined logistics as applicable. 
13. Incentivizing other methods of transportation rather than using one’s private vehicle needs to be taken from policy to action. This would include for instance increase of sea transport.
14. Smart Technology Systems would smart parking sensor to advise drivers if parking is available or not to avoid unnecessary traffic and time wasted looking for parking; adaptive traffic signals technology would improve efficiency. 
15. Encourage employers to invest in parking facilities and joint traffic solutions
16. The CVA system in Valletta has clearly failed and needs a complete overhaul. All stakeholders involved need to be brought together to steer a holistic revamp of the entire system to address the evident inefficiencies which are definitely not within the original spirit within which it was established. 

One of the biggest achievements of the organization during 2015 was the initiation of the abolition of Eco Contribution. After years of GRTU representation and complaining about the inadequacy of the law and its lack of logic, 2015 marked the year that started its abolition. GRTU has spearheaded this change and the journey was not an easy one as we faced 

significant impositions from Government due to the income Government derived from this contribution/tax. GRTU has been following the removal of this unjust tax very closely and there is an understanding that Eco-Contribution will be totally abolished in the coming years.

Another major win for the GRTU concerned its long standing crusade against excessive bank interest rates and charges. GRTU’s efforts have led to more affordable means of financing also through alternative sources that work independently of the banks as well as the Micro Guarantee scheme, another product that was developed by Malta Enterprise thanks to the efforts of the GRTU. 

Following insistence pressure by GRTU an investigation was carried by the MFSA as the regulator and the MCCAA as the competition authority that confirmed what GRTU has been arguing against for many years. The investigation focused on the bank’s level of profits, risk rating policies, financial literacy, interest rates and charges.

In 2015 GRTU has won EU funds to the tune of Eur 90,000.00, concluding its first ever European Social Funds project. The funds gave GRTU the opportunity to carry out a vast number of activities and reach beyond its usual capacity, increasing the exposure of the organization.

Thanks to this financing GRTU held two very successful conferences, one related to helping SMEs in reaching their online potential and another related to learning about and implementing the Budget measures. GRTU’s work and what it stands for were showcased through audiovisual tools, write-ups in popular magazines as well as tailor made publications. In addition GRTU also developed its first guidebook and online learning facility.

2015 was also a year were Government started taking concrete action against unfair competition. What has been achieved this year is far from being enough however it constituted an important first step because through intense pressure placed by the GRTU, Government’s policy shifted from one where it was arguing that goods coming from Sicily should be treated in the same manner as those coming from Gozo to one that involved a stronger regulatory framework and a degree of enforcement.

In addition, following GRTU’s campaign against the sporadic licensing of ‘occasional sellers’ Government abolished the exemption threshold of Eur 7,000. This will place the authorities in a position to be able to carry out checks that were impossible with the exemption.

GRTU’s sections have also been very active during 2015 and one of the most active and dynamic sections was the Renewable Energy Section. GRTU has successfully reached an agreement with Government in relation to the allocation of land for PV investments by the private sector. This will help Malta reach its EU 2020 targets and will help the sector through the supply of additional work that is not related to the schemes issued by Government. GRTU will be coordinating the project through a Public Private Partnership.

Apart from working relentlessly for the betterment of its members GRTU has also worked to improve the organization itself. In 2015 GRTU was awarded the Equality Mark by the National Council for the Promotion of Equality. This award is testament that GRTU is an equal opportunities employer and that its employment and working practices are gender neutral and fair.

The application process involved the development of an equality and sexual harassment policy, appointing an employee as an equality representative and implementing family friendly measures and work life balance options.

GRTU has this year also returned to printed media through its collaboration with the business journal – The Executive. This helped GRTU in widening its reach through an already established distribution network and a professional publication. The feedback received on the publication is very positive.

The GRTU Executive Council took the bold decision to relocate its headquarters, for the first time placing the GRTU in a position of directly owning the property it operates from. This we believe will drastically increase the value of the organization.