Author: SME Chamber

TTIP is a wide-ranging agreement between the two largest economic blocs in the world which is expected to reduce trade tariffs and regulatory burdens for commerce between EU Member States and the US. The negotiations have reached the tenth round and have now focused on investment protection and investor-to-state dispute settlement.

The outcomes of the negotiation round concluded in July were presented and discussed at the MEUSAC Core Group. Apart from ISDS and investment protection, the discussions also ensued on market access as well as regulatory aspects in pharmaceutical, cosmetics, energy and SME sectors. A common online platform for business opportunities across the Atlantic for both EU and US companies to access is also envisaged to be developed. An SME Chapter as a key part of the TTIP negotiations was also reported to be providing positive developments.

The European Parliament’s position on ISDS was also highlighted whereby the EP is steering in favour of TTIP yet has raised concerns on the dispute settlement relating to: equal footing between domestic and foreign investors; cases not to be heard behind close doors for transparency concerns; the need for introducing a concrete appeals mechanism; and the need for assuring the independence of arbiters. It was outlined that there have already been similar structures in other agreements with other third-party countries and therefore these should serve as experience to construct an effective and efficient dispute settlement system.

Reacting during the Core Group discussion, GRTU representative Matthew Agius welcomed the positive achievements reported in the TTIP negotiations as this agreement is expected to provide ground-breaking openness and opportunity particularly for businesses from specific sectors by reducing tariffs and excessive burdens. Nevertheless he also accentuated the need for such high-level negotiations to be watered down to small businesses and the self-employed as otherwise any possible benefits and effects will not be tapped into by Maltese businesses. In so doing, Maltese businesses need to be equipped from day one when the agreement comes into force to be able to reap the investment potential alongside, or better still, before their European counterparts.

GRTU further added that it is essential to ensure that TTIP negotiations are undertaken through the perspective of small businesses. The details of these high-level negotiations conducted by the highest officials from both sides of the Atlantic will be affecting the micro-businesses which run our economy. It is essential therefore that such details being discussed about important matters such as dispute settlement are entered into detail and are addressed with this in mind. It is important to establish a fair and accessible system which will at the end of the day serve fair and just results rather than the purposes of multinational companies who afford to dedicate exhaustive resources into details against the interests of the smaller businesses.

 

The Ministry for Education and Employment has in the past years introduced the concept of Career Exposure Experience (CEE) for secondary school students. The idea is to provide one-week-long opportunities for Form Four students to undergo placements and be exposed to the world of work. The job profiles are matched with students to give them a taste of the labour market and particularly the type of job they are aspiring to seek in the future. This experience also supports students by providing them job-seeking skills as well as understanding what would be expected in industry whilst 

developing skills beyond what is learnt in the classroom, such as soft skills. The past experiences of this programme has also shown that a number of students identify themselves with particular employers and actually seek them out when they eventually embark on their chosen career path at post-secondary level.

Businesses are encouraged to provide opportunities to host such students for such a brief period which would support their development particularly within the context that these students are tomorrow’s labour force.

The main sectors for placement being sought are the following:

• Agriculture
• Animal Care
• Architecture
• Art & Design
• Automobile
• Aviation
• Childcare
• Clerical/Administration
• Manufacture
• Marine
• Media
• Mechanics & Electronics
• Performing Arts
• Personal Care
• Sales
• Sports
• Elderly Care
• Engineering
• Finance/Business
• Gardening
• Heritage
• ICT
• Law
• Maintenance

Interested business owners are requested to contact GRTU on  or 21232881 for further information or to sign up as a host to the CEE programme.

 

 

Social Dialogue Minister Hon Helena Dalli described the context of this meeting as a timely one since social partners would be discussing Malta’ Pre-Budget Document in a few weeks time. This therefore contextualises Malta’s priorities in terms of focal areas to address in line with EU’s recommendations and EU 2020 strategy.

Officials from the European Commission Representation in Malta gave an overview of the Country Specific Recommendations for Malta which outline the following actions for Malta in 2015 and 2016:

• Public Finances– Following correction of the excessive deficit, achieve a fiscal adjustment of 0.6% of GDP towards the medium-term objective in 2015 and 2016.
• Education– Take measures to improve basic skills and further reduce early school-leaving by promoting the continuous professional development of teachers.
• Pensions– Accelerate the increase in the statutory retirement age and link it to life expectancy
• Access to Finance– Improve small and micro-enterprises’ access to finance, in particular through non-bank instruments                         –

GRTU acknowledged that despite negative scores in some of the indicators presented in relation to these policy areas, it was on the other hand positive to note that in terms of improvement ratio, Malta was featuring on the higher end of the scale. Focusing on SME-related issues, GRTU highlighted concerns which were reflected in the documents leading up to the Country-Specific Recommendations and which GRTU has been putting at the forefront.

One of the four Recommendations is directly linked to small and micro-enterprises in terms of access to finance. Malta’s economy is based on micro-enterprises at a higher rate than its European counterparts and therefore prioritising business concerns has to be at the highest end of the agenda if those who are building and sustaining our economic growth are to continue driving the economy forward. It is clear that Malta needs to incentivise non-bank instruments to outreach more flexibility and possibility for growth to businesses which are not maximising their potential due to problems of access to finance. Waiting for banks to take this step has not achieved much, and thus, such initiatives could then provide impetus for banks to follow suit. GRTU recognises the positive vision of the government in this sense particularly through initiatives mentioned in the 2015 Budget such as the setting up of a Development Bank as well as seed capital and venture capital. However it is becoming more and more imminent to see progress on theses initatives which need to be developed from proposals to actualizations which business can tangibly benefit from.

Another major concern highlighted by GRTU was the need for addressing unneccessary administrative burdens and related issues. Reference was made to a recent initiative to steer forward Malta’s e-Government services. GRTU welcomed this but explained that this would not succeed if it is not backed by a customer-oriented public service. There is evident need for training of public servants and adjustment of management processes to be sensitive to what delays and administrative burdens can cost a small business or a self-employed person.

GRTU also highlighted concerns related to unfair competition which need to be implemented to empower Maltese businesses. Deterring policies through fiscal policy initiatives such as a similar set-up to the Guardia di Finanzithat the government had promise in the 2015 Budget need to be implemented. On the other hand there needs to be incentives to support Maltese businesses to open up their markets such as through online means and e-commerce. Investing in supporting Maltese businesses to make the shift towards including an online business model would boost our economy.

Last but not least, GRTU also spoke about education-related issues whereby it is agreed and accepted that Malta’s most essential resource is its human resource. Whilst acknowledging positive initiatives being undertaken at the moment such as through apprenticeship schemes or the alternative learning programme, one needs to ensure that the various entities concerned are coordinating the different initiatives towards the same direction. While the country has done well to aim for the top, one may need to revisit the value of medium- or low- skilled jobs. The country has invested in post-secondary education but it is evident thatour education system at compulsary levels is failing a segment of children. This needs to be addressed in order to ensure their motivation to learn through different styles and across vocational subjects.

In terms of reaseach and innovation, GRTU described the need to achieve better results in this sector as an opportunity to link research and its usefulness to industry. Research occuring at the University of Malta and now at MCAST needs to be opened up to small businesses as an opportunity to tap into this resource since micro-enterprises do not have the capability to house research staff and departments. Research and innovation is also happening at SME level but is not necessarily being captured and maximised.

 

This week GRTU collaborated with the Economic Policy Department to organise an information session on the Transatlantic Trade and Investment Partnership (TTIP). This session was organised to update members about the current TTIP negotiations and also provide an opportunity for businesses to consult and give their feedback.

The discussion focused on various sectors which will be affected once the agreement comes into play. These include industries tied with engineering, raw materials and energy, cosmetics, medical devices; pharmaceutical

 products and chemicals. With the successful completion of these negotiations the EU-US will facilitate economic growth through increased trade in goods and services and improving foreign investment. The agreement will also establish market access by removing trade barriers and encourage continuous cross-border trade between both continents.

At the moment in the terms of tariffs, trade between EU and US is already beneficial as tariff rates are quite low. However through these negotiations the need to develop a framework for dealing with the regulatory divergences that hamper transatlantic trade in goods and services and investment flow was acknowledged. The TTIP negotiations are covering three major areas:

1. Market access (goods, services and investment):focusing on trade in services and investment protection by eliminating all duties on bilateral trade. Public procurement will also be tackled to enhance business opportunities through substantially improving access to government procurement opportunities at tall levels of government on the basis of national treatment.

2. Regulatory issues and non-tariff barriers: this area targets better regulation, best practice and regulatory cooperation which are still areas where both sides disagree. For example, currently the EU and US are at a disagreement concerning the level of product standards in areas of car importation/exportation and cosmetics.

3. Rules, principles and new modes of cooperation to address global trade challenges and opportunities: these include talks regarding :–

· intellectual property rights

· trade and sustainable development

· customs and trade facilitation

· trade and competition

· trade related energy and raw materials

· small and medium-sized enterprises

· capital movement and payments

· transparency

The conclusion of the TTIP negotiations is targeted to end by 2015 however this deadline is considered to be very unrealistic. Nevertheless the latest development regarding the European Parliament’s agreement to the TTIP resolution and the US’s approval of the trade partnership agreement it is expected that the decision will be facilitated and thus shorten the period for a deal to take place.

For further detailed information on the TTIP negotiations visit the European Commission website at: http://ec.europa.eu/trade/policy/in-focus/ttip/

 

 

 

Malta has had its national qualifications framework (MQF) referenced to the European Qualifications Framework (EQF) since 2009. This gives Malta’s education system more value in terms of mutual trust across countries and allows transferability of qualifications.

The National Commission for Further and Higher Education (NCFHE) has launched a consultation to update Malta’s Referencing Report. The major changes include:

• Clearer definition of a full level qualification(such as a Bachelors’ Degree for Level 6) as opposed to a short course described as an award
• Introduction of entry levelsbelow MQF level 1 in order to capture the skills developed by individuals which do not reach the present first level of the framework.
• A renewed commitment towards validation of informal and non-formal learningwhich should give value to attainment of skills irrespective of the context within which it has been obtained (such as learning of skills through the world of work)
• Establishing a lower minimum number of creditsfor accredited learning to a minimum of 1 credit (25 hours of learning)
• Establishing the minimum number of creditsfor full level qualifications
• Reducing the minimum contact hoursper credit to 5 hours (out of 25)
• Formulating a methodology towards giving credits to work-based learning

GRTU is holding a meeting to discuss the updated referencing report with operators in the sector in order to include it in its feedback to NCFHE. This meeting is being held at GRTU offices on Thursday 6th August at 15:30hrs. In order to confirm your attendance you are requested to contact GRTU on or 21232881.

 

Following the presentation delivered to the MCESD, GRTU submitted its official position paper on the Maternity Leave Trust Fund where it clearly stated that whilst GRTU is in favour of the rationale behind the measure it is against a system where employers are made to pay twice for their employees’ maternity leave, pending reimbursement.

The new mechanism requires employers to pay an increase of 0.3% in

 contributions on all their employees and at the same time also pay their employees their wage while on maternity leave. The latter will eventually be reimbursed by the Government through the contributions paid by the same employers.

GRTU is in favour of measures that increase the female participation rate in the economy and it believes this is an objective that should be supported collectively. It is however also important to acknowledge that maternity leave has a big impact on businesses, especially small businesses.

Maternity leave leads many small businesses to go through increased pressure having to make up for less human resources while still carrying the same wage cost. Some businesses go through more hardship because they need to find a replacement with the right skills and spend even more on wage costs to fill in this gap. Notwithstanding this however the process is embedded in businesses’ working practices and businesses cope with the situation the best way they can.

The new system will definitely aggravate the situation and to GRTU it is unacceptable to ask more from businesses. Businesses will be worse off both in terms of finances and administrative burden. Having to apply for a reimbursement from the Government is of significant concern to the GRTU because this translates to additional paper work and lengthy payment periods.

GRTU’s position paper is based on the input and feedback received from its members and Executive Council and we believe that several valid points were made. Unfortunately, even though GRTU submitted its feedback through the MCESD official channels, we are not in a position to know whether our position paper was given any kind of consideration.

This measure has serious repercussions on businesses, which repercussions begged to be measured in an impact assessment and discussed in a consultation exercise that went beyond simply delivering a presentation.

 

MCAST, together with the Ministry for Education and Employment, launched a new supplemented maintenance grant (stipend) for MCAST apprentices covering the summer period. This will take the form of an additional monthly allowance of €232.94 to each MCAST apprentice over the summer months. 

This is intended to serve as an incentive to MCAST students undergoing work-based learning experience.

MCAST has taken over the apprenticeship scheme in order to bridge their students’ vocational courses to on-the-job training through quality apprenticeships with the support of employers who opt to benefit from the scheme. It has been noted however that over the previous years a number of apprentices terminate their experience prior to the finalisation of the work-based training period. An overhaul in the system has identified a number of concerns that are being addressed by MCAST to ensure higher standards. One of the reasons has been identified as the lack of financial incentive over the summer months where students participate in apprenticeships up to 40 hours per week with minimal financial compensation. The summer period often offers temporary jobs which may be more financially attractive than apprenticeships to these students even though these do not offer the learning experience and objective which is set as part of their course at MCAST. Therefore this incentive should provide support to address the concerns of employers hosting apprentices, that such students would drop out over the summer.

So far there are over 500 companies offering more than 700 apprenticeship posts which vary across different training fields such as Finance, Business Administration and Marketing, Electronics and Mechanical Engineering, Agriculture, Construction, Applied Science, Sports, Hairdressing and Beauty. The increasing apprenticeship opportunities enhance the level of education and training offered to students at MCAST by providing on-the-job training that helps create a more work-based labour market. On the other hand, employers also benefit from the services of motivated young students over their period engaged with the specific company.

GRTU has over the past weeks organised an information session to engage more employers in hosting apprentices. For more information you may contact GRTU on or 21232881.

 

Parliamentary Secretary for Competitiveness and Economic Growth, Hon. Dr Jose` Herrera, has this week addressed the closing seminar of an ESF-funded project addressing improvement of online public services. Hon. Herrera outlined that it is essential that new government services are designed

 around the end-user rather than expect the end-user to adapt to the service. A simpler service is necessary to shift the citizens’ and business’ preference towards online access to government services.

This project aimed at offering research-based guidelines to support e-Government services to become more efficient and convenient. Research amongst Maltese citizens has shown that the majority prefers to use the traditional public services rather than the online alternative. This needs to be addressed since Malta’s e-Government infrastructure has indeed received European awards but this is not being reflected in the usage of the online services.

MITA representatives gave an overview of the research undertaken and focused on the recommendations brought forward by the study. The study showed that traditional services are overly bureaucratic and often lead to time-wasting and frustration (having to take days off from work, etc.), yet are still pre-dominant over online use.

The policy recommendations include:

• Positive discrimination towards online accesses and use of the eServices by the public
• Engage end-users in the development of new and updating of current eServices
• Identify and implement further highly-relevant public services and/or Forms (life events, such as birth certificates, etc.)
• Work towards a basic level of requesting-data-only-one principle from citizens and businesses
• Target a number of outreach actions at citizens and businesses
• Nominate agents/intermediaries and incentivise them to provide direct help in the delivery of the outreach and assistance related to eServices
• Develop mobile-friendly eServices

GRTU commended the policy recommendations and also expressed appreciation towards MITA’s work in terms of putting the public service forward especially in terms of infrastructural setup. GRTU however recognised that this will not succeed unless an actual tangible plan to instil a culture change within the public service to support eServices comes into effect.

Management processes within the public service have to prioritise online services and not afford that those who opt to use online services to be given the least priority when compared to those who use the telephone or present themselves physically at the respective government offices. The government service online has to feel personalised and be customer-, rather than process- or department-, oriented. The E-ID experience has proven that if the system is not customer-oriented it will fail despite the high quality standards in place. GRTU had given feedback that a pilot is necessary prior to launching such initiatives and that stringent security measures are not always necessary in each and every case, so much so that make the functions of a tool inefficient and non-usable.

Public servants also need to be trained to understand the exigencies of delays and bureaucracy on the self-employed and the small business. Keeping a file on a waiting list or undergo unnecessary complicated procedures can translate into costs which businesses cannot and should not bear. There also needs to be an efficient support system where online users can find support or report bugs when accessing specific services for the first time.

 

GRTU President Paul Abela last week attended the Milan Expo 2014 together with Honourable Prime Minister Joseph Muscat and Minister for the Economy, Investment and Small Business Chris Cardona. Presence in this initiative puts Malta as a probable business destination with the potential exposure amidst entrepreneurial visitors all over the globe. During the expo Dr Joseph Muscat expressed that Malta wanted to convince foreigners that

 the island was the ideal place for tourism but also to attract businesses. He continued by stating that Malta’s presence at the expo will continue to promote the country’s product quality.

The delegation was also present at a business reception where they were able to meet with current and potential investors. It is important that Malta continues to take the opportunity to be present at these types of event as this participation will continue to encourage foreign business investment to the island which will strengthen the Maltese economy.