Author: SME Chamber

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.

 

During an MCESD meeting GRTU has today welcomed the white paper and said that this is something the GRTU has long been arguing on. The GRTU emphasized that while inspections should ensure compliance and therefore a level playing field between private operators, they are currently working the other way round. Because inspections are carried out on the same businesses and free riders are left undisturbed the abiding businesses not only are suffering from unfair competition because they are carrying the 

burden of taxation and other compliances the free riders, their direct competition, are not, but they are over and above also enduring the burden of inspections. Currently inspections are therefore counterproductive and therefore GRTU welcomes the fact that inspections will be risk based.

In addition GRTU argued that there needs to be a change in mentality. We are all the time saying that SMEs are the backbone of the economy but when Government inspectors come knocking on their door they are not made to feel this way. Inspectors have to change their attitude from one of authority into one that assists businesses. They should never aim at instilling fear and they should go out of their way to reduce the inconvenience caused. The White Paper aims to reduce the bureaucracy involved in the inspection system and to improve the transparency, coordination and clarity of inspections, allowing businesses to schedule several inspections on the same day. It aims to speed up and streamline inspections for businesses, which are currently carried out by 24 separate inspectorates.

Some 70,000 inspections are carried out per year on local businesses, ensuring that standards are kept in aspects such as food safety, environmental health, pricing, employment and health and safety on the job.

The consultation process, lasting six weeks, will allow stakeholders to voice their thoughts on the proposals. The White Paper can be found on www.socialdialogue.gov.mt for public consultation, which will be open until 30 October.

 

Economy Minister Hon Chris Cardona launched the Malta SME Week 2015 programme. SME Week is celebrated across the EU and this is of particular relevance to Malta where SMEs, micro-businesses and the self-employed dominantly make up our economy. Minister Cardona explained that this year’s theme is Digitising the Economy.

This topic is relevant to all sectors of business irrespective of their size, type and nature of business. Digital developments, new methods of communication, eCommerce and online shopping, are all phenomena which are taking place around us. Customers are online and therefore businesses have to seek methods on how to be present as well as otherwise potential is being missed to other sources such as competition from foreign businesses.

GRTU has taken up the initiative to organise a key event during this year’s SME Week – Malta’s Digital Economy Gap Analysis: Identify Your Business’ Next Step. Together with the support of MITA, MCA and Malta Enterprise, through this conference GRTU shall be giving an opportunity to participants to receive hands-on practical trainingon key issues related to the subject as well as to give feedback to the key policymakers. The Minister for the Economy, Investment and Small Businesses Hon Chris Cardona and Parliamentary Secretary for Competitiveness and Economic Growth Hon Jose Herrera, shall be present to receive feedback from the conference.

Amongst other topics, the conference shall seek to equip businesses with insights into how they can maximise their profits through eCommerce, what grants they may be missing out on, how effective and cost-efficient digital marketing can be for all businesses, and how simple methods of improving operations through digital means can benefit business’ competitiveness.

This half-dayconference shall be held on 13^thOctober and shall be followed by a free networking lunch. All SMEs, micro-businesses and self-employed are encouraged to attend. More details shall follow. For registrationand more information about SME Week 2015, kindly contact GRTU on .

 

The MEUSAC Core Group was this morning presented with the European Commission’s new strategy on better regulation aimed at reviewing the approach adopted by EU legislation and regulations in a bid to shift towards more practical and efficient ends. Regulation needs to be appropriate whilst standards and principles maintained through a balanced approach.

The new Juncker Commission is committed to ensure that the EU, its institutions, and its body of law serve the citizens and businesses and this

 has to be seen in their daily lives and operations. The Commission has set its priorities and in doing so has established that the EU should not expect itself to involve in each and every affair but only to involve itself where it is best deemed fit and appropriate. Policy-making has to open up and involved stakeholders right from concept and drafting stage. Better regulation is not a bureaucratic exercise.

Citizens’ perceptions have shown that 74% of Europeans believe that the EU generates too many regulatory burdens. Therefore the Commission is seeking to adopt more proportionate approaches, limited and focused new initiatives, and ensuring high standards of law-making procedures. This does not mean deregulation but finding ways of achieving the goals more efficiently. The better regulation is based on three key components:

• Openness and transparency
• Doing better tools for better policy
• Refreshing the existing stock of legislation

Malta has welcomed the Better Regulation Package particularly because of more consultation at all stages and accessibility of information. EU policy should be fit for purpose. Strengthening of the independence of the impact assessment processes are also key factors. Particular attention has been given to SMEs.

During the MEUSAC meeting, GRTU representative Matthew Agius expressed that GRTU welcomes this new approach not only at an EU level, but hopes that it is supported through transcending it down to Member States. This is about making the EU more relevant in practice. The proposed strategy focuses a lot on SMEs and small businesses. Matthew Agius stressed that concepts such as Think Small Firstshould not remain just buzzwords but one has to see the actual implementation of key policies such as the Small Business Act.

Such initiatives are about bringing a paradigm shift – rather than putting forward policy and expecting end-users to abide, one has to elicit the needs from the end-users and reflect the realities of micro-businesses and self-employed by understanding how policy impacts them, and then design policy and legislation accordingly. Agius further added that there were initiatives that had been taken even at a national level such as establishing the as the Commissioner for Simplification and Reduction of Administrative Burdens, yet these initiatives needed to be followed up with the necessary resources, autonomy and institutional authority to in effect see results.

GRTU has also been repeatedly calling for efficient and open SME Test initiatives to enable improvement of legislative and management processes even with the EU and public sector to be made based on evidence and facts from the field.  Commitment to better regulation must apply across the board. GRTU welcomes the aims of actions such as REFIT which are intended to review existing legislative issues at EU level and revise in terms of bringing forwarding simplification.

GRTU definitely agrees with and supports the positive concepts being brought forward such as openness, transparency and simplification. However one has to see that effective implementation of better regulation initiatives are undertaken in practice and not remain conceptual goals which are shelved.