Budget 2011: The Forgotten Micro & Small Enterprise

So Government, against all economic logic, decides to tax producers. Construction, which is still not out of recession and costs are eating up profitably has been additionally burdened by a rise of €9 in the duty applicable on every tone of cement. This at a time when most construction products are derived from cement and when prices of constructed units are still deflated.

Worst still is the increase in the duty on fuels. On paper Government wants to see a shift towards public transport. It may happen when the dream of a top noted public transport services is brought to reality, if ever. But right now the alternative to vehicle transport, especially for most of enterprises in the distributive, trades and in services, is nil.

The cost of the additional price in diesel will be reflected immediately in the cost of services. The impact on the Retail Price Index of Fuel increases is dramatic as it will be transposed on the price of many other products and services when fuel costs are an important input item. A waste carrier, a transporter and any other heavy vehicle will see a €40-€50 increase a week per truck in regular use. The cost of transport will go up.

And what's the logic of all this. Government is frightened to cover expenses, afraid of trade unions, afraid of civil society groups, afraid if NGOs. But Government is not afraid of enterprises. Enterprise does not strike. Enterprise carry the burdens. Most times they cannot even dismiss workers it is unfair to blame workers and workers are today an important element of small enterprises. Theoretically they should put up prices. Some do whenever they can but many others cannot. They are still in a depressed cost-cutting stage of the market. They may be tied to time contracts. They may be tied up by contract to a Local Council and Government Authority where money is not available.

If GDP grows as a result of financial instability, e-gaming and professional services to Government, micro and small firms, which together now according to Jason Azzopardi are a force of 65,000, in Budget 2011 get practically nothing. Their costs are going up.

Their enthusiasm is going down. That's how things stand.