Fabian Demicoli

Budget 2011 as seen by ICT Enterprises

As in any other business sector ICT is a sector dominated by SMEs, SMEs that perform ICT related services for the local, SME dominated, business community and therefore if the local business community is affected adversely, the ICT sector will follow as the local business will cut down on use of these services and function on what is extremely essential. Budget 2011 has little specifically aimed at the ICT sector. There are no tangible measures geared towards helping the sector grow and perform better and, as for all other sectors, Budget 2011 fails to put money on the table for ICT.

 

What GRTU expected this time round in Budget 2011 was for Government to inject funds directly or providing bank guarantees. We expected Government to give a flexible financial solution that would fit any SME project and liquidity problem. SMEs needed a revenue neutral exercise that would give SME start-ups unparalleled opportunities and existing SMEs the initiative to innovate and expand their operations.

A year after its announcement, Budget 2011 only mentions the Micro Credit Scheme briefly stating that it should be launched shortly. The announcement of this Scheme was very timely however implementation should have been as timely. During all this year Government has failed to make a commitment to an indicative date by when the Scheme will be launched and it has once again failed to do so in Budget 2011. Year after year we await Budgets eagerly to tell us what we don't know, to reveal Government's decisions and not state the obvious and what we have been listening to already too often.

On the other hand the initiatives aimed at creating a better business environment for SMEs are certainly welcome although some of them had already been tabled in last year's budget and implementation was either extremely slow or started on the eve of the Budget. The "SME test", the "College of regulators", the "SME Consultative Body", the "Clearing House" and the "Sunset Clause" are all good ideas, proposed by GRTU Budget after Budget, that if implemented properly should result in an environment which businesses can feel more confident operating in. The 9 million euro investment into Malta Enterprise is also certainly welcome and we at least expect ICT companies to benefit from these funds.

One issue which is and has been adversely affecting SMEs in the ICT sector is Eco Contribution. Eco Contribution rates are very high on several ICT products and further amplified when taking into consideration defaulters an unfair competition. These are all factors unnecessarily raising the price of ICT products. We have been constantly placing pressure on Government to find solutions and properly implement the WEEE directive, but again, Budget 2011 does not even mention WEEE although we see that the Government is expecting to collect substantially less Eco Contribution next year. If this is going to happen because of implementing the WEEE directive is anyone's guess.

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