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Category: Archive – 2016

GRTU urges Hon Chris Cardona to assist in its fight against unfair competition

Posted on by SME Chamber
The issue of unfair competition created by operators that import products and give their services from Sicily to Malta has been going on for almost 10 years. The situation worsened a couple of years ago, an indirect cause of the economic crises, where an unprecedented number of Sicilian economic 
operators were negatively affected by the economic downturn and sought refuge in the Maltese market.
 
There is nothing wrong with economic migration, exports and tapping into foreign markets, that is why Malta joined the EU in the first place, to make use of the single market. When economic operators tap into foreign markets through unfair practices, that put them at an economic advantage, in comparison to local operators the problem becomes a big one.
 
Maltese businesses report a drop in sales as a direct result of unfair competition from Sicily as high as 30%-50%. The impact this issue has had and is still having on Maltese businesses is terrifying. Maltese businesses have a very hard choice to make,
evade taxes like the Sicilians do to be able to compete or watch their business die out year on year until they close down.
 
Sicilians do not simply under declare, they also do not charge, and therefore pay, VAT under the pretence that the goods are for export and therefore no VAT is due, since the goods will not yet reach the consumer and therefore are not subject to VAT. 18% is too high a margin and Maltese businesses are undercut, with no chance of competing.
 
This argument was explained to Hon Chris Cardona, as Minister for the economy, investment and small businesses. GRTU was accompanied by local furniture retailers who told the Minister that they are watching their business slowly go to ruins. They insisted that they will not let their business die out and if need be they will relocate to other EU countries where they can survive. It would be very bad news if Malta had to lose its local businesses, that are today in their second and third generation, because the Government is not capable of addressing such a straight forward issue.
 
GRTU fails to understand and it is extremely disappointed with the way the authorities are dealing with this issue. The point of entry that is enabling all this is just one and the authorities know this but they still fail to address the issue and hide behind a mountain of excuses.
 
Both this and the previous administration have failed to address this unjust situation and there is no reasonable justification for this. GRTU had falsely hoped that having two Government commitments in the Budget speech would mean that the situation has changed but this was not to be. The cross sector of businesses this is affecting is significant, these include amongst others but not limited to, furniture, white and brown good, pool services, etc….
 
As the Minister responsible for SMEs GRTU called on Hon Cardona to help it with his efforts from within the Government, mainly to address inadequate measures taken by the Ministry for Finance so far. The checks conducted by Customs and the measures taken by the Ministry for Finance have not borne any fruit and businesses have felt absolutely no level of change.
 
GRTU has been through this issue time and again with the Ministry for Finance and their efforts are ineffective. Their resources are wasted finding all the reasons not to do something instead of doing the opposite. The bottom line is that we have a big problem on our hands, a problem Government has recognized and has committed to eradicated budget speech after budget speech. We will no longer entertain excuses. If we do not see results we will go public if need be to exert the necessary pressure. As Minister for SMEs we need your help to make the necessary pressure and solve the issue.
 
GRTU insisted that a checking system is required for the authorities to know what is coming in through the catamaran both for security purposes and to ensure fair competition. The Authorities have reasonable suspicion to carry out the necessary checks and it is the obligation of the Maltese Government to ensure that VAT is collected and curtail abuse as necessary.
 
GRTU has made to main proposals as way forward:
 
  1. Setting up a task force to eradicate unfair competition – The task force would be composed of the Ministry for Finance, Customs, Inland Revenue The Ministry for Economy and Business, GRTU as well as other necessary stakeholders. Its task would be to take decisions on action to be taken, evaluate results, and oversee the handling of reported abuse.
  2. Introduce Scanners at the new quay – There is already a scanning/stripping system that is utilized at the Freeport and this should be introduced at the landing point of the catamaran. The system is a random one but it is also an automated one. As such GRTU suggests that either all vehicles coming through drive through the scanner of else an automated system is introduced where vehicles are inspected randomly and based on suspicion.

Valletta Shop Scheme

Posted on by SME Chamber
The Valletta shop scheme launched in 2015 has come to an end earlier this month with over 100 applications submitted by operators of Government owned shops in Valletta.
 
Was the Scheme a success or not?
Prior to answering this question, a few points need to be raised. This was the second version of a scheme for Valletta shops, the first one being launched offering only the option of a long lease. That was definitely not a success. It was GRTU’s prerogative to discuss with Government for the second scheme to be a greater success. GRTU successfully proposed that in lieu of rent, shop operators should be offered an emphyteutical grant (cens). This had a multitude of attributes. Firstly it would provide much needed collateral to the shop operator. It would provide greater security of tenure to forthcoming generations. It
would allow shop owners to give their shops on lease. It would lift the burden of maintenance from Government’s shoulders. Crucially, it would give Government the opportunity to update the Lands Department files with correct information as to who actually holds the title over any particular shop.
 
Nonetheless, one flaw which Government insisted on retaining from the previous scheme was the zoning which identified the price bracket that the shop operator would have to pay in order to benefit from the cens. The zoning was and still is flawed because it does not reflect the value of the properties situated in Valletta’s streets correctly. Government should analyze the application submitted in depth because it will evidently shows which zones were successful and which weren’t.
 
The value of retail outlets in Malta and Gozo is extremely location sensitive. Valletta being the case in point, is not only street sensitive, in many cases values differ widely from one stretch of the same street to another, and in certain cases even one side of the same street to another.
 
GRTU believes that this scheme was undoubtedly a success when compared to the first scheme. However, considering the hundreds of Government owned shops in Valletta alone, the success could have been much larger if careful attention to the zoning was given before its launch, as GRTU had warned at the time. For example, on the eleventh hour, Government accepted to change Zachary Street from Zone 1 to Zone 2. However, GRTU’s pleas to change zoning in parts of St John’s Street, parts of Merchants Street and St John’s Square to name a few, fell on deaf ears.
 
GRTU still believes that there is room for improvement if Government goes back to the drawing board when it comes to zoning and this may be applied not only to Valletta as a pilot project, but also to the other localities in Malta and Gozo.
 
GRTU solicits Government to start a consultation process as soon as possible to determine which zones need to be amended,
and how to amend them.

Il-GRTU titlob lill-Ministru ghat-Trasport jikkonsidra jerġa’ ddawwar it-traffiku ġewwa ċ-Centru tal-Mosta ghal kif kien qabel l-1996

Posted on by SME Chamber

L-GRTU dejjem poġġiet bħala prijorita’ fuq il-programm tagħha l-iżvilupp tal-lokalitajiet bħala fonti ta’ ħolqien ta’ impjieg u avvanz ta’ attivita’ ekonomika. Il-GRTU qiegħda taħdem kontinwament mall-Malta Tourism Authority, Transport Malta, Kunsilli Lokali u s-sidien tal-intrapriżi fil-lokalitajiet bil-ghan li jinħolqu attrazzjonijiet ġodda sabiex niġbdu aktar xogħol lejn il-lokalitajiet.

Aktar kmieni dan ix-xahar is-Sur Paul Abela, President tal-GRTU flimkien mas-Sur Joseph Zerafa, r-rapprezentant ghan-negozzjanti Mostin iltaqghu mas- Sur Edwin Vassallo, Sindku tal-Mosta waqt laqgha organizzata ghan-negozzjanti Mostin. Waqt din l-laqgha gew diskussi diversi issues fosthom li s-sistema tat-traffiku terga tigi lura kif kienet fl-1996. L-arranġament wara l-1996 kellu mpatt qawwi fuq is-sidien tant li f’survey li l-GRTU kkummissjonat dak iż-żmien irriżulta li l-bejgħ kien niżel b’50%.
 
Il-GRTU żammet diversi laqgħat mal-Kunsill Lokali li dak iż-żmien wasal għal din id-deċiżjoni sabiex issib l-aħjar arranġament possibbli. Kienu għalxejn it-tentattivi li l-GRTU għamlet sabiex din id-deċiżjoni tiġi riversata għaliex f’temp ta’ ftit xhur din is-sistema ġiet introdotta u għadha sal-llum fis-seħħ.
 
Il-GRTU tħoss li l-Mosta hija wahda mill-lokalitajiet li l-aktar li rnexxew bħala ċentru kummerċjali u dan is-suċċess huwa raġuni mportanti għalhiex l-istandard of living tal-Mostin huwa fost l-għola f’Malta. Skont studji li saru dak iż-żmien mill-Kunsill jirriżulta li kienu jgħaddu ammont sostanzjali ta’ vetturi miċ-ċentru.
 
Għalkemm hafna mill-Mostin, bħal ħafna lokalitajiet oħra, jaqilgħu l-għixien tagħhom minn barra mill-Mosta, is-sidien tal-ħwienet, l-familji tagħhom u l-familji tal-impjegati tagħhom, jiddependu għal l-għixien tagħhom mis-suċċess kontinwu tal-Mosta bħala lokalita’ li tattira passing business dejjem akbar.
 
Għal dan il-għan l-GRTU qeghda titlob laqgħa mall-Ministru Joe Mizzi sabiex flimkien mall-entitajiet kollha nvoluti tasal f’kompromess li jkun ta’ benefiċċju għal partijiet kollha kkonċernati.

Engagement of Migrant Workers Proposal – Positive Initiative Subject to Fine-Tuning

Posted on by SME Chamber
GRTU Malta Chamber of SMEs has long called for better regulation of casual work particularly within the context of migrant workers occupying a particular and useful role within our labour market but which does not benefit correctly both to lawful economic operators as well as other law-abiding employee counterparts.
 
It is therefore by no uncertain terms that GRTU supports such initiative in principle and welcomes the concept of regularisation in favour of better use of efficient resources, combating the black economy and exploitation of workers, and eradicating unfair competition practices in this sense. The approach adopted in terms of creating a Job Brokerage Office which shall act as a liaison between the human resource and the employer demands, is also a positive approach of moving closer to fair practice.
 
GRTU has submitted its feedback in relation to the Job Brokerage Office proposal in order to put forward its suggestions to fine-tune the proposal in a way which eradicates specific details which are cause of great concern in a proposal which would otherwise be a very positive development in regulation such work.
 
1. Although the voucher system is a commendable way to address the relationship between the employer and the potential human resource, the breakdown of pay structure will not achieve the desired encouragement of regularisation as it may lack an element of fairness.
 
Despite the proposal claiming to be based on the minimum wage it sways from this principle when one goes into the details of how the pay structure is broken down. The actual price paid by the employer is Eur6.00 per hour (or Eur5.50 per hour at best if purchased under the highest bundle of hours). The migrant worker receives Eur3.80 per hour. The prices proposed vis-à-vis the actual pay received by the migrant worker engaged put forward two concerns:
  • A lack of incentive in terms of law-abiding employers in relation to employers who still opt to operate within the black economy whereby if a migrant is paid at actual minimum wage in the black economy, such worker is receiving more than the Job Brokerage Office proposal and such employer is paying less.
  • There is an element of lack of fairness towards the notion of equal respect and equal pay between migrant workers and their counterpart workers which undermines the concept of fair and equal integration into the labour market, since such migrant workers shall be pocketing less than minimum wage in practice.
The 10% of the NI contributions may make sense as this is a contribution equivalent to regular NI. However the calculated additional cost above the minimum wage which is claimed to reflect 24 days leave, 10 days sick leave and statutory bonus should not be included in this sense. This is clearly none other than an operational tax to cover costs for the government authority managing the scheme. This additional payment by employers is not truly being passed on to the migrant worker as the worker is in effect receiving far less than this.
 
2. The proposal shows that it is already ready to offer a degree of flexibility, with suggestions such as adhoc arrangements in specific industries with seasonal situations for instance. It is necessary that this principle is followed and it is flexible to serve its purposes rather than becoming an overly bureaucratic exercise.
 
3. There needs to be a clear information campaign and roll-out of this new system. The point here is not to police and fine, but rather to educate businesses that this is a fair way of operation. There should therefore be a clear transition period from when the system starts and until all businesses understand how and when to use it before imposing enforcement which to date is very limited and therefore fines.
 
4. In the case of enforcement, the proposal identifies an increase in enforcement by stating that there shall be 16 rather than 8 enforcement officers. The business community would have its mind more at rest with knowing the nature and strategy of enforcement rather than the number of officers. For instance, it is imperative to have a fair and transparent system which chooses spot-checks at random rather than repeat spot-checks on the same businesses. There should be a method to report potential abuse.
 
5. The imposition of penalties is also a cause of concern. A level playing field is necessary through enforcement and implementation of enforcement through fines would be understandable. Nevertheless the proposed penalties which fall under
a parallel reform, namely the JobsPlus Act, are first and foremost unnecessarily costly. Some fine-tuning of the costs already imposed are definitely a strong deterrent to anyone not using the new proposed system of Job Brokerage since it is beneficial in nature. There is no sense other than creating an overly burdensome fine to businesses as a revenue for public coffers to have such fines reaching the sums of Eur5,000.
 
Moreover it is adamantly uncalled for to also include the possibility of trade-license revocation. One has to consider the implications on other company directors, the families of the business owners, the general implications of such revocation and other business commitments entered into, and last but not least the effect on the lawful employees who are employed with the business in question, as well as their families.

GRTU’s collaboration with MCAST to promote Entrepreneurship

Posted on by SME Chamber
GRTU has recently embarked on a joint pilot project with MCAST to raise the level of Entrepreneurship in accross the board within the project.
 
In November, GRTU launched the campaign ‘Be your own Boss’ an outreach exercise that targeted MCAST students. As part of this activity GRTU invited various representatives from the business community to exchange their views and experience with the students. The aim of this action is to highlight the skills and capabilities needed to successful establish and operate
a business.
GRTU believes that to truly learn entrepreneurship, apart from curricular activities, student must be inspired and exposed to the spirit of entrepreneurship itself. Throught this exercise students heard stories of how a diverse range of business sectors were set up, directly from the individuals that started the businesses. This included the challenges and joys of being in business.
 
GRTU has also established a skills council made up of entrepreneurs that are able to meet with MCAST representatives to analyse the institute’s business courses and determine the changes that need to be made for the modules to truely reflect the current business environment.
 
This pilot project was carried out on the BA (Hons) in Business Enterprise. During this session a number of aspects were identified that could potentially increase the occupational standards in the industry. The exercise will be followed with other meetings targeting different courses within the institutes.
 
GRTU also plans to continue the outreach exercise to promote entrepreneurship amongst students that have the potential to become prospective entrepreneurs. 

Opposition launches Short-Term Measures to Reduce Traffic – GRTU reiterates urgency of practical immediate improvements

Posted on by SME Chamber

Traffic congestion within the limits of our country’s infrastructure has over the years developed into an imminent cause of concern for all, with direct effect on business. GRTU has first and foremost welcomed the fact that, following continuous pressure by its Transport Lobby Group, the issue has been raised on the national agenda by both Government and Opposition.

The document presented to social partners by the Leader of the Opposition Dr Simon Busuttil and Transport Shadow Minister
Dr Marthese Portelli, puts forward fifteen concrete shortterm actions, based on four pillars – a) Quality of Information b) Target Commuter Segments c) Infrastructural Investment d) Planning and Management. The proposed measures are:
 
1) Thorough Study of Situation
2) Information and Awareness
3) Upgrading School Transport Services
4) Dedicated Transport
5) Transport For Government Employees
6) Incentivising Other Commuter Segments Through Positive
Incentive Schemes
7) Waste Collection Process and Support Structure Review
8) Infrastructure Maintenance Program
9) Intermodality and Shared Nodes
10) Soft Nodes
11) Upgrading and Integrating Traffic Signal Infrastructure to
12) Coordination and Information on Road Works
13) Human Resource Utilization
14) Bringing Services Closer to the People
15) Information Technology Use
 
The full document can be accessed on http://bit.ly/1s6Xc6n
 
GRTU highlighted that proposals to address traffic congestion have been put forward by the SME Chamber time and time again because it is affecting business sectors which it represents. It is of concern to retailers as parking and traffic issues continue to isolate them from consumers who are opting for online shopping, whilst it also reflects additional operational costs to all road-related business operators, from goods distributors to passenger transport.
 
GRTU welcomed the document, describing it as putting forward actionable necessary actions which are positive incentives rather than disincentives and fines. GRTU also appreciated that a number of its own proposals brought together by members of GRTU’s Transport Lobby Group who emanate from businesses with hands-on daily experience on the road, were taken on board. GRTU shall continue working with both Government and Opposition on short-term measure and long-term planning to find solutions to this matter of great concern to businesses across the board and country in general.

GRTU’s crusade against the new Billboards and Advertising law

Posted on by SME Chamber

The new Billboards and Advertisements Regulations, 2016 came into force on 29th March 2016. The law brought together two older laws, one related to Billboards and the other related to any other Advertisement into one law and also introduced a number of significant changes.

The law regulates any kind of advertisement that can be seen from the road, including a shop sign, additional adverts both related to goods and services sold by an establishment and commercial adverts of third parties placed on the roads, including billboards.
GRTU immediately protested publicly and heavily against this law because it was introduced without any kind of prior consultation with GRTU as a social partner whose members would have been directly and gravely hit by this hurried law.
 
GRTU took it upon itself to clarify a number of misunderstandings in relation to what kind of adverts were in fact exempt from the law. Ultimately it became clear that even a simple shop sign falls well within the remit of the law.
 
An urgent meeting was held by GRTU for its members to discuss its concerns, iron out misunderstandings and establishing a way forward. A wide range of sectors reached out to GRTU and expressed their grave concern with the law.
 
The signage sector experienced an immediate drop that amounted to 90% of its sales. This sector was overnight practically stalled with its clients holding back orders fearing that their brand new signs would not be complaint with the law and subjected to the yearly Eur1500 fee.
 
Billboard operators were also thrown into turmoil being given an impossible deadline to register their billboards and comply with the requirements of the new law. Government unfortunately decided to address a problem that had been accumulating for over 10 years overnight and pointed its finger at billboard operators when the Government had significantly contributed in providing the right conditions to the situation we have on our hands today.
 
Following this public outcry GRTU held two meetings with the Parliamentary Secretary, meetings that GRTU itself had requested.
 
After lengthy discussions, GRTU succeeded in negotiating a 6 week long consultation period in order to come up with a set of proposals that would solve the issues that are embedded in the law.
 
GRTU’s consultation process is currently underway and will close on the 6th of June. The sectors that are being consulted are the sign writing operators, the billboards operators, as well as businesses in general, including retail shops.

GRTU Signage Association being formed – Billboard Operators welcomed within GRTU

Posted on by SME Chamber

GRTU’s incessant work on LN103/2016 has led to a six-week consultation period which shall be putting forward constructive proposals as to how the advertising, signage and billboard sectors ought to be regulated in a fair and logical manner which makes sense for the regulator but which is practical on the ground.

Members from the signage and sign-writing sector within GRTU have been actively meeting throughout these weeks to tackle the core issues of the law and propose a system which would regulate efficiently and effectively

 without harming business. With an increasing number of members from the sector joining GRTU, the need has been felt to set up a fully-fledged association for the signage and sign-writing sector within the structures of GRTU.

In parallel to the sector’s work on the proposals for the new law meetings are being held to draft a statute and devise a work-plan for the new association. The association’s main aims shall be to promote and widen the sector, to set standards and guidelines for the sector, and to raise the quality of service within the sector as a whole.

In addition to the signage and sign-writing sector, GRTU has also welcomed billboard operators as a separate new sector. GRTU already represented operators within the billboard sector but with more members joining a new section has been set up specifically for this sector. These GRTU members are working well hand-inhand to respect the agreement reached with the Government regarding billboards as well as commencing discussions to set proposals for the new law from the perspective of billboard owners.

The problems introduced by LN 103/2016 are multiple and serious

Posted on by SME Chamber
1. One size fits all
 
The law that may have had scope to perhaps orderly organise the billboards that we see scattered around our roads has stretched to cover any form of advertisement. Advertisement is defined as any word, letter, model, sign, 
placard, board, notice, device or representation, whether illuminated or not for the purposes of advertisement, including any boarding or similar used for the display of advertisements, including a billboard.
 
 
The Regulations go on to state that no advertisement shall be displayed or be illuminated in any place that is visible from the road without the permission of the Authority. This in practice literally means that all advertisements that are visible from a road
will be regarded in the same manner, irrelevant if these are done within one’s private property or on public land and if these are advertising the goods sold within the shop or if the advert is a commercial one, and will require a Planning Authority permit at a fee and will also pay a yearly license of Eur 1,500 every year to Transport Malta.
 
2. A misleading and irrelevant exemption
 
GRTU was shocked to realise that the law goes as far as including shop signs and other advertisements that might be affixed to the façade. This with the exception of signs not more than 0.5 square meters in area that are fitted flat against the façade or fascia and is not a projecting sign and as long as there are no more than two such advertisements per shop.
 
The 0.5m2 exemptions was introduced in the 1993 law because this was the standard practice in the 1980s and the sign and advertising industry has since then significantly advanced. In practice any sign today falls outside this size and therefore is subject to the law.
 
3. Reinforcing an outdated and never before enforced law
 
GRTU was disappointed to see that a new law released by the Parliamentary Secretary for Simplification of Administrative Burdens was in no way simplified and elements that should have clearly been removed because they are outdated and not enforceable have been renewed in the new law.
 
Just to give one example, a disturbing requirement is that any advertisement, including a shop sign, must bear the Authority’s reference number for its permission and this must be included as an integral part of the advertisement design in a permanent, clear and legible manner. This negatively impacts the design of logos and signage both future and even more so those existing and overlooks the fact that this goes against the branding rules of franchises.
 
4. Conceived, introduced and enforced overnight
 
GRTU is aggravated by the fact that the Legal Notice has overnight placed great strain on the sector that is now faced with a situation where it is not able to honor advertisement commitments made before the law was published. Operators were put under pressure to resubmit the paperwork of their permits with the Planning Authority by Monday 11th April after Planning Authority officials reportedly called the clients of billboards operators informing them that if the billboard is not regulated a fine
of between Eur 1000 and Eur 5000 will be applied.
 
GRTU condemns the method in which this law came into force in total disrespect of the principles of transparency and consultation. The law has hastily attempted to address an issue that has been in existence for a lengthy amount of years in the most incorrect of manners. Moreover, the Planning Authority has been sitting on the permit applications for over two years without giving any form of feedback.
 
The law has not assessed the significant impact it will be having on enterprises across Malta and has induced a money making mechanism that will throw enterprises in an even more precarious situation.