GRTU President Paul Abela has this week welcomed Malta’s Envoy to Pakistan, Iran, Bangladesh, UAE and Sri Lanka, Ahmad Aziz, at GRTU offices. Abela and Aziz discussed the need to seek common ground to open up the potential of trade between Malta and these countries. The make-up of our economy being majorly focused on small businesses allows companies to perhaps sharpen their outreach to possible trade. On the other hand, whilst acknowledging that various factors, such as distance, makes such trade less popular than closer countries with larger commonalities.
Nevertheless Abela explained how it is essential to identify niche business sectors which can offer reason for such trade routes to be established as this would allow growth and investment in markets which are not overly saturated already with existing trade with Malta or even so, European countries. Abela expressed GRTU’s support in finding such trade avenues yet emphasized the importance of high-value fruitful investment. Ahmad Aziz agreed to seek potential investors in sector-specific areas across Pakistan and other Asian countries in order to discuss with Maltese counterparts on promising areas of business cooperation.
An MCESD meeting held this week focused on the need to prioritise research and innovation. University of Malta RIDT CEO Wilfred Kenely introduced the subject by giving an overview of the research initiatives undertaken by the Research, Innovation and Development Fund throughout the past four years since its setup. It was highlighted that the human capital and infrastructure is available, but to take research to the next level investment needs to be
upped. A number of research-driven initiatives have practical benefits to society at large, such as cancer research.
The MCESD meeting was also to discuss a proposal for budget initiatives related to the sector. The proposal’s main suggestions included:
Set up of a Malta Business Research and Innovation Hub
Promote knowledge transfer between industry and academia (KTPs)
Forecasting skills and human resources needed for R & D
Facilitate VISA applications for third country researchers
Promote the concept of Malta being a living lab for new business ideas
Additional funding through MCST and EU structural funds specifically for research
Programmes to incentivise commercialisation of projects
Equity financing instruments for innovation
Tax allowance of 200% of R & D expenditure to companies
Simplification, support and raising of awareness regarding issues related to Intellectual Property Rights
GRTU representative Matthew Agius welcomed the concept behind the proposed initiatives and explained how GRTU had always regarded research and innovation as essential in order to maintain our competiveness. It is often seen as a priority area which is often not regarded as the highest on the agenda, but GTRU expressed that it is high time for research and innovation to be truly focused upon and not invested in only as a peripheral concern.
Coordination and Collaboration
In essence the idea to have one focal point for research and innovation through the form of a hub makes sense as long as coordinates and incorporates the work undertaken by the existing bodies. This would avoid fragmentation between the University of Malta, MCAST, Malta Enterprise, MCST and other initiatives.
Demand-Driven Research and Access to Resources
GRTU emphasized the importance to shift towards demand-driven research which is relevant and which makes needs of enterprises. SMEs and micro-businesses do not have the necessary resources to invest on structured research and development. It is therefore necessary to give access to these businesses to research resources at the University of Malta and MCAST whereby in turn these give applied opportunities for research to students and lecturers there. This can be linked to exigencies already in place such as that of University of Malta collective agreements incentivising PhD research for all lecturers and the introduction of MQF Level 7 courses at MCAST. Linking business research needs to researchers could lead to opportunities to maximise the potential of research undertaken.
Small Business Research
GRTU also highlighted that research and innovation would be taking place at start-up or self-employed level where these may not necessarily be aware that what they are undertaking is indeed research and innovation. This hinders development as it is not structured and moreover, not captured as part of the national research and innovation. If it is not captured it is not supported. These are missed opportunities that need to be addressed. A measure to this extent needs to be included in the proposed incentives that were put forward at the MCESD meeting.
Incentivising Research
Incentives and channelling of research need to be further strengthened and widened. Incentives for investing in the RIDT Fund at the University of Malta have to be made clearer and more attractive whilst opening up other methods of incentivising research and innovation beyond the walls of our university.
Communication
Research and Development are not necessarily understood and appreciated across all sectors of society. Therefore the benefits and the need to give due priority are not always seen by the general public but also by operators in the field. Self-employed and small businesses often have limited resources. Considering that research and innovation do not always have immediate and assured returns, this may be seen as an area which is desired for but not high enough on their agenda to invest resources in. Therefore there needs to be a clear communication initiative of any measures introduced in order to accentuate what research and innovation can achieve and the promote the respective incentives across the board. This will also lead to more funds, such as through CSR initiatives, to be channelled to research.
GRTU Malta Chamber of SMEs will in the coming week launch ‘WEEE Malta’ through its fully owned subsidiary Green Mt. GRTU is the only constituted body in Malta that has taken the responsibility of making sure that producers/importers of both packaging and now Waste Electrical and Electronic Equipment (WEEE) comply to their legal obligations.
Since early 2007, GRTU had taken the initiative with the then government to take up this environmental responsibility by establishing Green MT.
In fact WEEE was Green MT’s first priority back then since Legal Notice 63 of 2007 obliged companies to cater for their environmental legal obligations as of August 2007. This was not to be despite the fact that Green MT had also obtained a permit to operate the WEEE Scheme early in 2008.GRTU has striven to encourage the removal of Eco Contribution of Electrical and Electronic Equipment and the implementation of WEEE. And once again Green MT commends Government for taking a step in the right environmental direction.
Once this legislation is published, the WEEE Directive will come into effect, and will be implemented in practice in Malta. GRTU seeks effective results on policy measures and does not merely treat such issues as matters to be spoken about and shelved. Green MT has now gained extensive experience from the packaging operations and will not be held back from ensuring that a fair and level playing field is not in place.
WEEE Malta, which will be launched in the coming week, does not intend to re-invent the wheel but intends to make life simpler for producers/importers who are now obliged to comply to this legislation. Reporting will be in the simplest format possible and the Scheme will still make sure that this is being reported in ‘bona fide’.
WEEE Malta will insist with the respective authorities, and those being currently set up (The Environment Authority), that the respective inspectorates have to be on the ball at all times. This is imperative for the implementation of this Directive and Green MT will aid the authorities to get enforcement on the right path.
It has been drawn to our attention that certain sources may be implying that the compliance to WEEE is being offered for free by a particular entity or organization. One must realise that whether in the short-term or a long-term, a service comes at a cost. Environmental compliance has its benefits yet naturally also comes at a cost to one and all and therefore one should not be deceived by statements claiming otherwise. The WEEE directive includes 60 % of products that did not fall under the Eco Contribution regime so it is understandable that prices for these products will increase. However there could also be a decrease in a number of products that were previously part of the Eco Contribution regime. It is wrong to say that the Government has only changed the Eco Contribution from one type of tax to another by implementing the WEEE Directive. The WEEE Directive is one Directive that has to be taken care of by producers or their representatives. Governments of EU Member States cannot be involved in the implementation of this Directive and Malta did well to go to that direction.
WEEE Malta augurs that there will be a smooth transition from Eco Contribution to WEEE Directive requirements and furthermore outlines the need for stakeholders to keep on meeting around the table to monitor what takes place in the market as of early of September. Where necessary, old ways of doing things need to change, and change should be welcomed as it brings about new business opportunities.
WEEE Malta welcomes every importer of electrical and electronic equipment to its launch coming week. A communication will be sent to all prospective members outlining venue and date.
WEEE Malta is an Authorised WEEE Compliance Scheme and can be contacted on 21 496965/6 during office hours or on 79002263or 99041462.
The Pensions Reform Group has put forward a proposal which aims at retaining the current retirement age while incentivizing later exits from the labour market. The Reform Group has ruled out increasing social security contributions and compulsory second-pillar pensions. Amongst the major recommendations in the proposal is that permanent pension top-ups of 2% (for 62 and 63 years) and 4% (for 64 and 65 years) would be applicable to those who remain in employment without claiming a pension prior to 65 years of age.
Throughout the past weeks GRTU has been active in the consultation process. A MCESD meeting with the Minister for the Family and Social Solidarity Hon Michael Farrugia was held last week where the Pensions Reform Group outlined the main points of the reform proposed. This week GRTU was also present for a meeting with the Opposition Deputy Leader Hon Mario de Marco whereby social partners were invited to give their feedback. GRTU has also organized an information session for its members specifically for the Pensions Reform Group to discuss the proposals with SMEs and self-employed.
GRTU has sustained that it is evident that demographic realities imply that reforms in the pension system are necessary if we are to have fair and just pensions which are also sustainable for the years to come.
Furthering incentives to motivate more workers to remain in the world of work and acknowledging women’s career breaks in terms of pension credits due to child-bearing, are amongst the positive initiatives that GRTU welcomes. GRTU however raised concerns of specific sectors which are perhaps more labour-intensive whereby this would be more difficult in reality. This therefore implies that in practice it would be very difficult to have for instance a gas distributor or construction worker remaining in the labour market at a rather old age. This may also be of concern to employers who might have workers who decide to remain within the labour market but due to health and age reasons would have their productivity and performance reduced.
GRTU has always proposed that funds collected for pension purposes should be invested in a national fund which is specifically set for pensions and not towards the general consolidated fund of government. Government would have to anyway sustain this fund but it could be used to invest safely. It would be monitored by social partners.
One of the recommendations put forward by the Pension Reform Group addresses part-time work whereby it is being stated if a part-time worker is in fact working a full 40-hour week even if with more than one employer, s/he and the respective employers need to pay the respective NI and enjoys full contributory entitlement. This will be an additional cost to employers in specific sectors and may also have administrative concerns in terms of implementation, particularly due to the monitoring over the number of hours worked per week with different employers.
At the consultation meetings held, GRTU President Paul Abela has specifically queried as to what is in it for the self-employed. It is important to clarify and inform how the pensions system works, the existing categories and what pensionable entitlement one would have when reaching retirement. There is perhaps nothing in the reform which is addressing the self-employed directly. Self-employed persons would have invested, generated work and taken risks through their businesses throughout their working life whilst contributing.
The third pillar needs to be incentivized with serious measures for those who can sustain themselves through it. There are different practical ways how this can be done. GRTU President Paul Abela exemplified through for instance the pig breeders. These have contributed to the economy for decades but the Maltese economy has changed in a way that this line of work is dying a natural death. It would make sense that at least the land which the pig breeders had invested in would be allowed to be used for rental purposes since their investment would serve as a form of private income throughout their retirement. Another practical measure would be setting incentives for self-employed persons who would have opted to invest in a property for the running of their business without having in any way received support from the government. This property can then be used for renting purposes when the self-employed person is no longer in business. That income is a form of pension for the retired self-employed who would have invested himself throughout his working days without having gone for business support or other resources from government and would have contributed the national insurance throughout his work. This should therefore have some form of tax exemption or fiscal incentive even though it should also be capped.
The document hints at moving towards equity release as a form of adequate alternative for individuals who would be asset-rich but perhaps cash-poor. If this is the case we need to see that there are adequate genuine persons through set systems that can be trusted, that guide such individuals. Most of them would be ageing and not in any way experienced with the property market. One needs to ensure that the life-savings (in the form of property) reap the maximum potential for them and is not taken advantage upon by others. This also leads GRTU to extend its appeal to banks to consider persons of a certain age who might need financing for specific projects. The reality is that these may be asset-rich and that life expectancy is increasing. If we are heading towards this direction it cannot be that such persons find all doors closed to acquire financing.
All in all GRTU sees that first pillar pensions need to be sustained in order to ensure a fair retirement for all sectors in society. At the same time incentives have to be made to encourage other modes for pensions. Diversification and incentives can lead to sustainable pensions. GRTU is collating feedback from its members and will be putting forward it formal feedback within the deadline set for the consultation.
The full report, recommendations and related documents can be found on http://bit.ly/1OjRgwH. Kindly send your feedback to GRTU on by latest 26th July 2015.
Following an information session held by FIAU and the Ministry of Finance, hosted by GRTU to its members from various sectors, GRTU opened a two-week consultation period to its members. The main scope of the proposal is to set a limit upon cash transactions which is being suggested to be at €10,000 for cases of both single transactions as well as transactions which appear to be linked. Any such transactions above this threshold would be considered illegal and penalties duly applied.
GRTU appreciates this positive initiativewhich is aimed at combating tax evasion and money laundering as well as incentivising the shift towards other safer and more contemporary methods of payment such as online transactions. GRTU has however put forward a feedback document highlighting the following concerns:
Linked Transactions—Members from specific sectors are concerned with such cases based on agreements over periods, such as in the case of vehicle hire purchase.
Communication and Dissemination—A strong information campaign to the general public is necessary as it is unfair to place this onus on the trader.
Monitoring—If this proposal is to be implemented appropriate monitoring is necessary. If not, it is clear that this would result in a situation where mass non-compliance would work against complying retailers.
Arbitrary Regulations—Interpretation of linked transactions should be based on an arbitrary set of regulations and not reliant on subjectiveness.
Retailer Protection and Payment Assurance— Compliant traders that do not accept such cash transactions and make the necessary reports need to be protected and assured payment.
Donations—Donations also need to be regulated as otherwise these can be used as a loophole to the scope of this regulation.
This week the Deputy Prime Minister, Mr Louis Grech together with Dr Ian Borg launched an SME Initiative that will benefit 850 enterprises over the next 5 years. The initiative was presented to various financial institutions and European Institution such as GRTU Malta Chamber of SMEs.
This initiative will combine the different resources of the European Structural and Investment Fund, the EU Horizon 2020 programme, the lending capacity
of the European Investment Bank.
During the launch the Deputy Prime Minister said that the previous JEREMIE scheme confirmed that when SMEs are offered suitable financing instruments, they will react positively. The tool selected for the initiative is that of an uncapped portfolio guarantee, under which the selected financial intermediaries will benefit from a 75% risk cover on each eligible SME loan.
On this matter, GRTU believes that the JEREMIE scheme was successful mainly due to the additional advantages it offered, primarily more advantageous interest rates and collateral requirements. GRTU feels that these advantages should be even more pronounced this time round as they should reflect the ever increasing efforts of the European Central Bank with rock bottom interest rates and other advantageous conditions that prioritise lending, for increased investment and job creation.
Another positive element in the new scheme is that it will be offered by a number of banks, or at least those that choose to go for it. GRTU had highlighted the fact that JEREMIE was offered by only one bank which was a limitation, not because the bank acting as a financial intermediary did not deliver, but for the reason that SMEs should be free to do business with the bank of their choice. This is also very healthy and GRTU looks forward to seeing most local banks not only sign up, to offer this renewed facility to their clients, but also competing between themselves by offering the most advantageous conditions.
GRTU welcomes this SME initiative and hopes that the Government will continue to undertake schemes and grants that will provide the necessary assistance to our local SMEs.
On 3rdJuly, the Malta Competition and Consumer Affairs Authority (MCCAA) held an information session in collaboration with the GRTU on Product Safety and Market Surveillance.
This session was organised to provide information to economic operators with regards to their responsibilities to ensure product safety and how to
make sure the products that are placed on the market are compliant. It is important that when selling a product certain certification and paperwork must be presented. This documentation will assist in saving time from having products picked up to be tested and from having to remove them from the market in case of problems. This applies to any products sold on the market, both coming from the EU and from outside the EU.
During the event, it was identified that an economic operator has the responsibility to:
Only place safe products on the market
Use ‘harmonized’ standards which give presumption of conformity
Provide relevant information to enable consumers to assess the risks inherent in a product
Adopt measures to enable them to be informed of risks and take appropriate actions
Ask for Declarations of Conformityfor CE marked products from the manufacturer
Check DOC for any possible issues (eg superseded standards, irrelevant standards, lack of signature, yesterday’s date, COC and not DOC, wrong product, no positive product identification, etc.)
Research RAPEX website for any banned products similar to the ones they are importing
Make sure intermediaries can be trusted.
If in doubt ask MCCAA for assistance before importing products
Economic operators also had the opportunity to learn about the RAPEX system which provides a rapid exchange of information between European countries and the European Commission about measures and actions taken in relation to products posing a serious risk to public interests. Through this system and other entities such as MCCAA, economic operators will be able to provide safe products to European consumers.
Thus market surveillance is essential in protecting European consumers and workers against risks presented by non-compliant products. In addition, market surveillance helps to protect responsible businesses from unfair competition by unscrupulous economic operators who ignore the rules or cut corners.
Further information on the RAPEX system can be accessed through the link: http://bit.ly/17vA07b
In July 2014, the Central Bank of Malta and the GRTU Malta Chamber of SMEs agreed upon the organisation of a continuous educational programme for the retail sector.
In order to better assess their members’ needs, in October 2014, the GRTU,
in consultation with the Bank, launched a survey with the supermarkets, mini-markets, retail outlets, petrol stations, pharmacies and appliances & IT outlets with the feedback bringing to light a number of areas where the retail sector needed assistance in terms of information and training needs.
Being the retail business, a significant percentage of employees deal with payments and cash handling on a day-to-day basis. Through the survey however it transpired that only 52% of these employees are given general or specific training in relation to handling cash and dealing with payments. Amongst the most common issues the sector finds problematic are post-dated cheques, counterfeits, too many or too few coins, cheques not honoured, safety concerns, issues at reconciliation stage and late payments.
Even though counterfeits is a main concern only 50% of respondents own a bank authentication device and most are not aware that the machine should be upgraded regularly to keep abreast with developments in counterfeiting. 10% of retailers that do not own such devices do not accept all denominations.
On the new Europa Series of banknotes the absolute majority of retailers said their employees received no training on the security and other features of the new banknotes and in most cases the identification devices they own and the vending machines they have do not cater for the new series.
In the light of the above findings, a programme has been developed to assist the retail sector. The Programme’s main objectives are: (i) to raise awareness on the risks existing in the areas of counterfeiting and money laundering; (ii) provide the necessary training to the retailers’ employees in the fight against counterfeiting and money laundering thus reducing financial damage/legal risks; and (iii) to inform the retail sector on the use of more efficient payment instruments.
The CBM-GRTU Joint Educational Programme includes:
A ‘Continuing Educational Programme’ mainly focusing on cash related matters and payment instruments;
The ‘Certification of Cash Handlers Programme’; and
Meetings with the main supermarkets at their main offices; and
Advice on the purchase of banknote authentication devices and vending machines.
The European Union Programmes Agency (EUPA) held its annual stakeholder forum this week in order to consult interested parties about the upcoming Erasmus+ Funding Programme in terms of priorities and operations. The forum meeting was a positive initiative as it brought to the table the Agency’s vision for the upcoming cycle whilst receiving feedback from the major operators to ensure better attainment of EU-funded projects that fall within Erasmus+.
Earlier this month GRTU held a meeting with its members in the private training provision industry specifically to gather feedback on previous experiences of funding projects and challenges faced that may have served as hurdles to hinder private providers from participating. At the stakeholders’ forum held by EUPA, GRTU representative Matthew Agius raised pertinent concerns of private providers to which EUPA promised due attention. The main points involved:
1. Human Resources Implications – Think Small First
If national priorities truly are to increase private training provider participation in such funding programmes, then the way these are designed and administered have to keep in mind the realities of small business operating in the sector. The administrative burden that can be handled by public providers with state-funded human resources to handle such project work is not an option for private providers. It is expected that documentation is necessary to ensure transparency and quality, but administrative work which is unnecessary make participation in such projects unfeasible and impossible.
2. Monitory Role rather than Policing Role
It is understood that public agencies handling EU programmes and funds have to monitor and ensure that proper implementation takes place when such EU funding is being distributed. However, since such monitoring has to take place anyway at the final stages at least, it would be far more appropriate if a handholding exercise is undertaken prior to private applicants making unintended mistakes. These can be fixed at this stage and with an attitude of support rather than of policing.
3. Competing Against Public Providers
Private providers are often at a disadvantage when compare to public entities which are competing or even handling such funds. This has to be taken into consideration and appropriate measures to rule out unfair competition have to be put in place if private providers are to be attracted to compete for such funds as otherwise these will automatically see such applications as an unnecessary exercise which takes up irreplaceable resources when they are already not at par with their public counterparts.
4. Simplification and Communication – Bottom-Up Approach and a One-Stop-Shop
Private providers are not necessarily equipped to first of all be abreast and aware of the funds and programmes available and what the possibility are. Moreover when they are aware of such opportunities, the application procedure and guidance notes for instance, are often too hefty for private providers not to be discouraged. Therefore preparation of documentation should be made in a sense that takes into account the realities of small private providers. There should also perhaps be one-stop-shop that supports and guides all the various elements of EU funding programmes. Communication efforts also have to be tailor-made to reach out to small businesses operating in the training sector and not only to the larger state-funded entities.
5. Closer Deadlines on Cycles
Previously deadlines for funding rounds where set at quarterly intervals. Therefore if a private provider was planning a project application and did not make it in one round, the application could be submitted in the next. However now having a yearly interval between one deadline to the next makes it less attractive to apply. If the private provider would have missed a deadline because of necessary time needed to gather relevant information or find partners for a project, it would have to wait another year. This is often not possible and the providers would either drop the project altogether or implement it anyway without EU programme funding.
