SME Chamber

Budget 2009: Yes we can!

 The pre-budget meetings have been useful as GRTU was pleased to note that several of the incentives given by Government in Budget 2009 were proposals made by the GRTU during the pre-budget meetings. Amongst which:

Support to start-ups

The introduction of the Small Business Act

The launch of the General Accounting principles for SMEs

The speed up of the work for the establishment of a one-stop-shop

The strengthening of the department for Fair Competition

Revision of the penalty and interest system

Host Families get an amount of non-taxable income

Improvement of the coastal areas of St. Paul's Bay and Qawra

Increase in the financial help to Local Councils

An incentive scheme for enterprise investment in the localities

Distribution of energy vouchers to families for energy saving lamps

Solar Water Heaters scheme

Photovoltaic scheme for families and incentives for companies

Introduction of energy performance for businesses

Energy audits for families

Energy campaign

Aid to industry in energy efficient investment

Removal of VAT on registration Tax for vehicles

Vehicles bought from 1st January 2008 can opt for the new taxation regime

Introduction of the end of life vehicle concept

Widening of the Tax bands

Our proposals were prepared in the form of a Manifesto with the target to be achieved in the next 3 years. The checklist of proposals was this year exceptionally long and therefore we thought it best that every section leader would give directly his views following consultations with members on Budget 2009. GRTU's proposals would not have cost money to Government and this is why we believe there was a good uptake.

With this in mind a press conference was called this morning where GRTU's section leaders expressed their remarks.

In his opening speech GRTU's Director General, Vincent Farrugia, addressed the press by saying that the Budget laid bare what the situation in the country is. The country's spending in the past made us unprepared for a rainy day, days such as today. 

GRTU did however find the Budget to lack the necessary boldness and too positive than the situation really is. The Budget does not target the grave situation we are experiencing and the one yet to come. It should have prepared Malta with a good package and not we after have turn yet again to bight into what is left in our pockets. We cannot keep on making ends meet like this and widen the deficit.

An instance are the Utility Tariffs. Government insists on getting 59m from the industry and get €123m more than last year from Government revenue. This is a perfect example of what not planning ahead and not taking care of our inefficiencies costs us. If Government's revenue targets are not fulfilled there is nothing to fall back on anything other than people's pockets. Postponing with the Drydocks decision has cost us millions.

We are easily asked to pay for the inefficiencies but we seem to be not good enough to be involved in discussions. With Prime Minister Gonzi's method we always arrived to reasonable conclusions. There is no where to go. The Utility Tariffs have to be reviewed. Our country cannot handle it and because of it the Budget was thrown over board and was not given the importance it deserves.

GRTU is thankful for this single reason alone that Malta joined the EU. Now politicians that think they can continue abusing of their position have a watch dog and GRTU will make sure the watch dog is warned when something is not as it should be. The EU has helped us a lot, being also in the EuroZone, through the financial crises. The GRTU is not like other unions, a strike will not increase our member's pay, so this has proved a good door to knock.

The Director General concluded by saying that we are not negative on the Budget but we are on the Budget strategy. He than passed the word to Mrs Josette Vella, GRTU's Council representative of St. Pauls' Bay, Qawra and Bugibba businesses.

Mrs Vella explained that she is pleased that Government has put St Paul's Bay project on the Budget agenda it is a very good tourist initiative, for which the section had been waiting long. She however explained that dates are as important and we want to start seeing tenders coming out. GRTU knows the funds have arrived so we want the project to start as soon as possible. St Paul is loosing tourists not only to other countries but also to other localities as they are saying it has become shoddy.

GRTU sent its proposals on the areas prior to the election. This included a strategy for the empty apartments. These apartments should pay a pro-rata licence for the period rented and the tax should be 5% as that of the Hotels. These should also be included in the MTA website so that a pack is given. In addition the polluter pays principle is good by there are not enough bins and enforcement needs to be strengthened with wardens. GRTU would have liked to see them included in the Budget proposals.

Paul Fenech took the floor as one of our active member who wanted to have his comments heard on the Budget. He, in line with GRTU's position, totally disapproves that companies that provide services are made to subsidise industry. He emphasised that the service sector employs a large number of people, he himself employs 120 persons. The Maltese economy is changing and Government keeps on focusing on factories, this is not Malta's only future. Mr Fenech emphasised thst companies are going through a very difficult time and selling is stale.

Another important development in Budget 2009 was the change in the way vehicles are taxed. Michael Galea, president of the Autodealers Association, who are also members of the GRTU, explained that his section is extremely disappointed with the Budget as their agreement with Government was that the prices for second-hand cars had to remain the same for at least 15 years. Some licences have however gone up by 93%. This section has suffered throughout the year from uncertainty and still after the Budget the retail value is not clear which puts their sales in a negative position.

Together with the GRTU, the Auto Dealers Association had a meeting yesterday with the Ministry of Finance, the Economy and Investment and they have early today sent their position so that the market is not hit adversely by the new tax regime. The latest developments are very anti-social and will certainly hit the consumers hard both by devaluing the cars they own and putting up the licence fees.

Mario Debono, GRTU's Council representative of pharmacies and pharmaceuticals explained that the Health vote was a very good move and he is pleased to note that Government does not hold back when it comes to health. He explained however that there needs to be a cost control on certain aspects to avoid negligence and abuse.

GRTU is very disappointed that a success story like the POYC was voted less money than last year. The money voted for this year is enough to cover 19,000, while the POYC already serves 25,000 customers. There is no money to pay pharmacies for the service they give. GRTU is aware that abuses persist and we want to help in putting them to an end if Government is willing to let us. Also unfortunately through change in Minister the POYC is experiencing an injustice. When before the GRTU would sit with the Ministry to discuss, suddenly decisions are being taken without consultation and the Government wants to change the agreement between himself, the GRTU and the Chamber of Pharmacies. Both GRTU and the Chamber found the change unacceptable.

Green policies are high on GRTU's agenda and Mr Joe Attard, CEO of Green MT, addressed the issue. Joe Attard welcomed the fact that Government took up many of GRTU's suggestions on energy incentives. However disappointment is also present as Government ruled out the exemption from eco-contribution to companies members of schemes but also increased its revenue from eco-contribution. He explained that it is possible that Government has a different strategy which he has not made us aware of, even though he is sceptical. He explained that companies will not pay twice to have what they introduce in the market disposed of.

GRTU's deputy president and vice president of the Tourism section took the floor and explained that the Budget is positive because it has voted money and identifies important aspects such as marketing, product development in tourist areas and more money for low cost airlines. It is also positive that SAS will be starting two flights a week from Malta Stockholm and that there is a call for 3 new destinations Leads, New Castle and Bristol.

It is also positive that Host families will have their burden alleviated through a €3,500 non-taxable turn-over. The problem Mr Fenech saw in the Budget is that it does not sufficiently calculate the forecast of the international crises that will be hitting us hard like everywhere else. IATA has said that by the end of the year the aviation industry world wide would have lost 5b dollars and 35 airlines would have collapsed.

Other observers are saying that as many as 5-6 EU airlines could go bankrupt between now and Christmas. Eventually British Airways, Lufthansa, AirFrance and Ryanair will survive in Europe, meaning that Malta being an island economy with no mainland tourism, loosing accessibility and linkage is inevitable. Tour operators and airline companies are repositioning themselves to consolidate or retrench and downsize to combat the crises. Every linkage that is lost Government should do its utmost to replace so that the industry can remain sustainable and enjoy the growth we had been experiencing before the crises. He concluded by saying that it lacks an economic stimulus pact for tourism to face the challenges ahead.

Marcel Mizzi, GRTU's Council Member responsible for the IT section welcomed the new investment in enlarging MCAST Campus and the setting up of the ICT faculty at the University of Malta, a long overdue step that we feel Malta should have taken years ago in view of our plans of becoming a centre of IT excellence in Europe.  He also welcomed the E-learning initiative but advised caution in the hope that these funds will have a direct effect on the results being obtained by government schools in preparing their pupils for further learning.

We believe that the continued investment in the My Potential II scheme should continue having the desired effect, that of steering our youths into the ICT field. The 9 million euro investment in innovation, the 2.5 million in small startup schemes, the 3.5 Million in grants for R&D as well as the continued investment in the business incubation centre should all have a positive effect on the proliferation of ICT in Malta. He continued by explaining that we expect a number of new companies will benefit from these initiatives.






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