Author: SME Chamber

Social Partners in agreement

During a consultation meeting held with the opposition on the Budget proposals, the Chamber of Commerce, Enterprise and Industry, the Malta Employers Association and the Union Haddiema Maghqudin were in agreement that Government should address the issue of electricity costs in this Budget. This means that all the major social partners, with the only exception of the GWU, believe that concrete measures must be taken to address the current situation.

 

Opposition in agreement

The opposition also agreed with GRTU’s position that the 25% reduction was promised in a time different from the conditions we are living in today and therefore the reduction in the international prices of oil, the efficiencies of the BWSC plant and the cheap electricity rates of the interconnector should be regarded separately.

Dr Simon Busuttil said that the reduction requested by the GRTU is not only justified but obvious and apparent when one considers the figures that are publicly available. Dr Busuttil insisted that unfortunately with regards to other considerations one can only ask questions since the agreements are not public and there is lack of transparency.

GRTU reiterates its call for 30% reduction in electricity tariffs

GRTU President Paul Abela said that the GRTU had invited the Government to carry out its own technical assessment in order to see what reductions could be passed on to SMEs. He said that in calling for a 30% reduction the GRTU was being conservative and GRTU will be escalating its efforts in the coming days to see prices reduced.

Paul Abela said that he would have expected the Government to not simply be a guarantor to Electro Gas but partner up with the company. This is what happens in the private sector where the guarantor believes in the venture he is guaranteeing for.

 

As part of its pre-budget meetings GRTU met Minister for Transport Joe Mizzi since it has highlighted transport and parking as a main challenge that hindering business competitiveness.

GRTU President Paul Abela said that traffic and parking are two elements that are reducing productivity and are discouraging consumers from going to the shops. He said that the problem in localities such as Valletta and Sliema 

is in need of immediate action and requested incentives to increase the parking capacity and incentives for the private sector to offer solutions to the current problem.

Mr Abela also reiterated GRTU’s complaint that port charges will once again go up and this is making Maltese businesses uncompetitive. In reply James Piscopo, Chairman of Transport Malta assured GRTU that its complaints have not fallen on deaf ears. In fact he said that the full extent of the agreement with the private operator is being considered and analysed and a study is being conducted to assess how competitive are the Maltese ports in comparison with that of our neighbours and other countries in the Mediterranean and the EU.

In relation to transport the Minister said that a lot of effort is being done to increase the efficiency and reliability of the public transport system. He said that incentives targeting the private sector are also in the pipeline and welcomed GRTU’s proposal to incentivise companies to provide combined delivery system services. He also invited the GRTU to come forward with other private sector proposals that will alleviate the current traffic and parking problems and said that the Ministry will help these projects materialise and put in place the necessary incentives.

On the CVA, GRTU complained heavily that the system is a failure and needs a complete overhaul. The parking availabilities do not make sense. First and foremost the parking capacity has shrunk significantly and while residents are catered for two fold, other people coming into Valletta were very limited in their parking options. While the system is making money from people coming into Valletta no improvements in the parking and traffic situation in Valletta was made.

The Minister recognised the shortcomings of the CVA system and assured the GRTU that as a main stakeholder it will be consulted so that the system is improved. The revision should take place next year.

 

GRTU President Paul Abela has attended the second Maltese-Russian Business Forum hosted by the Chamber of Commerce of the Russian Federation with the participation of the Minister for the Economy, Investment and Small Business of Malta Honourable Chris Cardona; Ambassador of the Republic of Malta in Russia His Excellency Carmel Brincat; President of the Moscow Association of Entrepreneurs Mr Andrey Podenok and the President of the Gozo Business Chamber Mr Michael Grech.

The Forum highlighted the importance of further development of a mutual beneficial trade and economic relations between Malta and Russia.

Malta’s successful development of modern electronics, as well as pharmaceuticals, automotive parts, aircraft components and software is a favorable investment climate and is interested in foreign investments from countries such as Russia. Malta is also popular as a tourist destination and offers various educational programmes for students that wish to learn English. These factors alone generate multiple opportunities for both countries to invest and establish economics relations.

The Russian Chamber of Commerce expressed that Malta is an interesting, prospective partner for Russian entrepreneurs. The organisation stated that recently the Maltese and Russian business contacts grew significantly. GRTU will also continue to work with these organisations to share opportunities of business investment in both countries.

GRTU members that are interested in Business opportunities in Russia can contact Elaine Zammit on

 

GRTU has attended the EuroCommerce and Uni-Europa Commerce Sectoral Dialogue Committee held in Brussels, Belgium this week. The Committee is set up under the wing of the European Commission and brings together representatives of both employer organisations as well as trade unions to promote social dialogue related to the commerce sector.

A brief overview of the work undertaken in 2014-2015 was given prior to focusing on the upcoming 2016 Work Programme. The Sectoral Social

Dialogue shall now be focusing on a renewed Work Programme for 2016. In 2016 the following shall be the main themes to be addressed: Skills; Employment Strategy; Health and Safety; Business and Human Rights; Flexible labour markets; Improving Social Dialogue.

Retail and Wholesale have a major role to play in fighting youth unemployment. There needs to be better assessment of skills needs in SMEs. There needs to be coherent project implementation with other European stakeholders to promote suitable working conditions based on optimizing one’s skills in line with labour market needs.

In terms of health and safety, it is envisaged that work is to be continued on an EU-funded project which is to set forward a toolkit for the sector drawing on examples of good practice from members. In this field, promoting best practices and finding improvements is desirable but has to be achieved through avoiding further burdensome regulation.

EU Employment Strategy is to be reflected upon through the various aspects of also achieving flexible labour markets that can adapt to the different profiles of potential employees. This would include the review of the working time directive, the review of fixed term and part-time directives as well as a labour market analysis in order to address the challenges of the commerce labour market and provision of quality jobs through a possible EU-funded project on the key challenges and factors of change in the retail and wholesale sector. Main themes to be addresses also include work-life balance, undeclared work and migrant workers.

Another priority is that of empowering and improving social dialogue to ensure close knowledge of union thinking on the main issues facing retail and wholesale. It would also help to identify early warning of threats to the ability of retail and wholesale to respond to the challenges of a rapidly chaining economic and technological environment. Social dialogue has to be more effective and what is being achieved at European level has to be transcended nationally. Another key topic mentioned was that intergenerational solidarity.

GRTU outlined the importance to also include the effects of e-Commerce and online platforms both in terms of business-to-consumer as well as business-to-business, as well as issues related to alternative sources of access to finance. GRTU also suggested focusing on start-ups and entrepreneurship as means to address youth unemployment.

 

CEDEFOP (The EU Agency for Vocational Education and Training) has conducted a Country Review on Apprenticeships. Apprenticeships in Malta are currently undergoing a reform to re-establish confidence and assure quality. GRTU believes that apprenticeships are a key valuable tool towards

 providing a workforce which is skilled and trained with experience  ready to engage the needs of industry.

The Minister for Education and Employment Hon Minister Evarist Bartolo outlined the need for extending the opportunities for apprenticeships to provide youths with more chance to develop industry-driven skills. Minister Bartolo expressed his concern that there were still youths out of employment or training and that have given up on education. He encouraged all those concerned to find further means of cooperation to offer more opportunities.

The key issues identified for necessary improvement:

1. Apprentices do not benefit from rights in relation to social security and injury at the workplace
2. On-the-job training and ratio with off-the-job training is not guaranteed by law
3. There is no holistic approach to a qualification following apprenticeship
4. Apprenticeship programmes follow a non-integrated approach
5. Apprentices undergo two assessments and receive two certificates
6. There is an accumulation of functions on the education side: strategy, provision, administration, assessment, certification
7. There is mismatch between apprenticeship offer apprenticeship offers and labour market needs
8. Apprenticeship is offered as a general alternative for learners, in addition to other forms of VET in the same occupational sectors.

CEDEFOP Director Professor James Calleja highlighted the importance of apprenticeships to give value to education in terms of the labour market. He outlined that solid governance structures for apprenticeship schemes need to be set in place to address these problems.

GRTU believes that a positive step has been taken through the efforts by MCAST over the past year, however apprenticeships need to be widened both horizontally (across other institutions and particularly to allow private institutions to access such schemes) as well across education sectors including other levels of the MQF and higher education perhaps through other forms of work-based learning such as internships.

GRTU is also insisting the development of a fair system that is student-centred yet which provides all the support to the host in order to recognise the time and investment that is being dedicated by businesses. Such systems also need to be redesigned to attract and be accessible to micro-businesses to give such opportunities. If one continues to rely only on the larger employers, it is going to be difficult to widen the opportunities as is desired.

 

 

 

Proposal:

GRTU is proposing the reduction of electricity tariffs for SMEs by 30%. The price structure of electricity tariffs should also be transparently disclosed and discussed in MCESD.

Context:

Utility bills undoubtedly feature as a substantial cost for SMEs which effects their financial viability directly. Being effected by market fluctuations and the national energy mix, sound policy is essential for energy tariffs not to hinder competitiveness. Recognising that energy tariffs for SMEs have been reduced as of 31st March 2015 should not eliminate the fact that for a number of

 years Maltese businesses have not only suffered high electricity prices because of the international prices of oil whilst being burdened with sustaining the inefficiencies of the electricity supplier. Therefore, given that the various factors that have caused high electricity tariffs in the past, have now evidently reduced costs of provision drastically, it is high time that this is transposed onto our businesses in full.

The reduction in cost has been far higher than that of 25% and should therefore be revised to reflect a further 30% decrease. The international price of crude oil has on average been halved. The supply received through inter-connector is significantly lower than rates upon which electricity tariffs have been calculated in the past. Moreover, the BWSC plant has been reported to operate with substantial improvements in terms of efficiencies that have reflected cost reductions. These factors have been in place for a number of months and therefore there is valid and reliable reason to believe that a further decrease is necessary to reflect the trend.

Taking these considerations jointly, a scenario of a higher decrease than the 30% being proposed beyond the March 2015 reductions is possible and evident. It is in this spirit that GRTU appeals for the logical conclusion that this discrepancy is addressed imminently to ensure stronger competitiveness for businesses when cost of provision has declined. This will in turn incentivize our economy.

Outcome

It is evident that this reduction in energy tariffs is synonymous with reduction of enterprise running costs leading our businesses towards becoming more competitive. The principle of transcending the reduction of costs of provision onto a reduction to the costs of SMEs shall lead to our businesses increasing turnover and improving profitability. This is in turn expected to result in further investment, expansion and thus job creation. This flagship GRTU proposal is intended to enhance competitiveness to drive the economy forward rather than constricting it through electricity tariffs that no longer reflect the cost of provision.

GRTU was the co-organiser of an event together with MEP Miriam Dalli entitled ‘How to thrive in an EU environment’. The highlight of the event was the participation of European Commissioner Elzbieta Bienkowska, responsible for internal market, industry, entrepreneurship and SMEs, who’s participation was also facilitated by Dr Dalli.

The event was a very good exercise of direct interaction with the 

Commission where entrepreneurs were given the opportunity to express their views on what obstacles they encounter and the challenges they are struggling with.

GRTU CEO Abigail Psaila Mamo said that the GRTU had always been in favour of EU accession because the Maltese market is very limited and Maltese entrepreneurs need the internal market of 500 million consumers to expand in. In order to penetrate the single market Maltese businesses need to be competitive, they need encouragement and they need the process to be simple, with the least red tape possible. We need to help SMEs see the opportunities and that going outside their comfort zone is worthwhile. 

The CEO emphasised that we first need to start by tackling our challenges at home because these are holding our SMEs back. Our public procurement system is extremely complicated and a barrier to both Maltese and EU small businesses. High electricity prices as well as the cost of access to finance are reducing our enterprises’ competitiveness. We also need to conquer the challenges posed by the Digital Economy and make the think small first principle a reality. These are all challenges we need to overcome and we need the EU to help us with.

During her speech Dr Miriam Dalli stressed that Microenterprises in general have contributed significantly to help the European and the Maltese economy grow. Their contribution is not limited solely to the economic sphere. Microenterprises play an important role in social development, in reducing unemployment, particularly among persons previously unemployed and in investing in human capital. We want to make sure that our local microenterprises manage to prosper in the EU. Their success is our country’s success.

Minister for Finance Edward Scicluna stressed the importance of a stable macro-economic environment and the removal of excessive bureaucracy as essential elements for micro-enterprises to succeed. He stressed that excessive bureaucracy is indeed a major obstacle to economic growth, and addressing such inefficiencies is a challenge in itself. Prof. Scicluna also remarked that micro-enterprises are the most vulnerable business ventures, yet one of the major economic players in the country.

Commissioner Bienkowska congratulated Malta and especially Maltese SMEs and microenterprises on their performance during the economic crisis. Ms Bienkowska addressed the floor on their comments and questions and said that she appreciated having direct feedback on what is and is not working. She said that there is more the Commission wants to do on issues such as late payments because the EU’s initiatives when implemented are sometimes watered down and become ineffective. She invited participants to inform the Commission formally of their issues.