A Budget that extends the safety-net for Businesses, more tax incentives should follow to enable new investments
19 October 2020
Budget 2021 The Malta Chamber of SMEs is pleased to see a number of its...
Aimed at growth through small businesses expansion support of businesses in the localities and increased capital expenditure – “GRTU’s main budget task this year is, growth trough utilization of unutilized economic resources” stated Vince Farrugia, Economist and Director General of GRTU Malta Chamber of SMEs.
“The Maltese banks have excess liquidity far beyond what they need but also with the limits of what Maltese SMEs need. Under current tight credit rules banks have no urge to go beyond standard security requirements and most small businesses cannot come up with additional collateral and be able to guarantee the loans they need to make their business grow, refurbish and renovate or move from a dying line into more attractive business opportunities. The recession has eaten away most reserves and the properties they have for use as collateral for extensions are either empty or currently unsalable. There is no money around. Only the banks have it. GRTU strives to cause Government to incentivize the banks through enhanced loan guarantees beyond the restricted conditions and limits of the micro credit schemes so that businesses can plan ahead, invest and grow. Small businesses represent 98% of Maltese enterprise. If they all make one step further our GDP will grow ten steps forward”, emphasized Vince Farrugia.
The owners of the empty buildings spread all over Malta need incentives to use the excess building stock for business and household expansion. The localities must guarantee the fiscal incentives to encourage business growth in the localities. Women want to work but they want to work closer to home so every hour available is used economically and not wasted travelling around Malta. Enterprise can be encouraged to move back office work to our villages through schemes that encourage empty blocks to be used as additional office space. Many businesses want to buy new premises to expand. Many empty blocks can be changed from apartments for sale to old age retirement homes, new self catering tourism accommodation or lodging for tourists or students.
There is so much that can be fruitfully done to better use our unutilized financial and building resources. Tourism should not remain the domain of hotel owners. People with large homes all around Malta and not just in the tourist areas should be incentivized to use all this accommodation excess capacity to lodge tourists, 1.2 million tourists a year for a destination like Malta is too ridiculously low. All the talk about tourism carrying capacity when three quarters of Malta hardly ever see a tourist in their locality is nonsense.
No other country in the Community can boast of such a service.We have enough resources for growth. Government needs also to speed more our capital investments in the infrastructure. Too much of the infrastructure is old.
Spending on capital investment not only creates growth but makes the country more comfortable”, emphasizes Vince Farrugia on behalf of GRTU.
There is no need for austerity. If the economy grows the deficit will fall as a ratio of GDP and if the small businesses grow and young families are encouraged to buy new homes, through GRTU’s proposal for a tax holiday for two years for Maltese families who want to buy a first home or move to another home-occupying residents, the Government will also earn more as an average out of every €100 increase in GDP, 20% goes in increasing labour income, 40% goes to Government as an additional tax review and 40% goes to enterprise to cover all enterprise costs and profits less wages.
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