GRTU ready to take a stand on Government’s commercial property rents regulation

GRTU’s Executive Council is being convened for next Wednesday 16th July and the most important item on the agenda is Government’s Commercial Property Rent Reform Proposal (CPRRP) . GRTU Council Members and Section leaders will be discussing a Motion addressing this issue.

A GRTU survey among members, from various localities and sectors of business including commercial, trading and craft enterprises, shows clearly that the Reforms being proposed by Government will affect negatively an extremely large number of businesses. It proves that Government’s strategy to rush through with the Commercial Property Reform’s piggy-back on the Reforms of residential properties is ill thought and poorly supported by facts and statistics.

The Motion presented to the GRTU Executive Council requests the Prime Minister to advice the Cabinet of Ministers to withdraw the CPRRP as presently constructed. The Motion states that the Proposals being rushed through by Government, even though still a White Paper proposals is already having a negative impact on many businesses. These are the businesses who over the years have paid rents which though today appear small, originally had their rents based on rates of return that equated very favorably with the cost of construction or purchase of the same properties.

Over the years many of these tenants paid hefty sums of money, most times as large or larger than the value of the property to obtain particular rights and ensure continuity or succession of their business.

The GRTU survey shows that many business owners occupying premises that fall within the reach of the proposed Reforms feel that who ever drafted the proposals had no knowledge what so ever of what really goes on in the commercial property market. It is indeed a market in which today the State is proposing to interfere in a way that the Motion presented considers to be grossly unfair.

The Motion suggests that the proposed Reforms are withdrawn and the current debate and consultations concentrates only on residential properties. This is already a big enough argument and Government is being advised not to distort the whole debate by continuing to insist on the reform of rent laws related to commercial properties. This since Government does not appear to be well informed of the facts and the potential negative impact of what is being proposed on enterprise employment and other third party interest which livelihood depends on the proper functioning of the private small entrepreneur.

The Motion in front of GRTU’s Executive Council describes the proposals as presented in the White Paper as being short sighted, badly constructed and based on no valid statistical and factual information that justifies the urgency for the recommended reform.

The Motion defines the reform as proposed in the White Paper as grossly unjust as they benefit the few and castigate many. GRTU in the past had instigated rules that protected small enterprise owners and their families who’s livelihood depended on business licenses in the same way that trade unions defended the security of tenure of workers. Government cannot now attempt to change the rules overnight and allow such a big issue that effects so many thousands of businesses to be camouflaged under the bigger issue of residential properties rent reform.

The proposed Motion states that Government’s reform proposals castigate the many honest business owners that have over the years toiled and invested to transform the Maltese economy to a level which today compares very favourably with that existing in many other European Member States. The few are being rewarded the expense of the many.

The GRTU motion requests the Prime Minister to withdraw these proposals and present them again at a later stage after a thorough study of the whole commercial property market and the rights of operating enterprises is carried out by an Independent Commission that is technically capable and specifically detailed to study the matter in depth. The GRTU motion insists that GRTU as the representatives of the largest organised group of SMEs is allowed to nominate its technical representation on this Commission.

The general feeling at GRTU is strongly against Government’s White Paper.