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...
Social Dialogue Minister Hon Helena Dalli described the context of this meeting as a timely one since social partners would be discussing Malta’ Pre-Budget Document in a few weeks time. This therefore contextualises Malta’s priorities in terms of focal areas to address in line with EU’s recommendations and EU 2020 strategy.
Officials from the European Commission Representation in Malta gave an overview of the Country Specific Recommendations for Malta which outline the following actions for Malta in 2015 and 2016:
GRTU acknowledged that despite negative scores in some of the indicators presented in relation to these policy areas, it was on the other hand positive to note that in terms of improvement ratio, Malta was featuring on the higher end of the scale. Focusing on SME-related issues, GRTU highlighted concerns which were reflected in the documents leading up to the Country-Specific Recommendations and which GRTU has been putting at the forefront.
One of the four Recommendations is directly linked to small and micro-enterprises in terms of access to finance. Malta’s economy is based on micro-enterprises at a higher rate than its European counterparts and therefore prioritising business concerns has to be at the highest end of the agenda if those who are building and sustaining our economic growth are to continue driving the economy forward. It is clear that Malta needs to incentivise non-bank instruments to outreach more flexibility and possibility for growth to businesses which are not maximising their potential due to problems of access to finance. Waiting for banks to take this step has not achieved much, and thus, such initiatives could then provide impetus for banks to follow suit. GRTU recognises the positive vision of the government in this sense particularly through initiatives mentioned in the 2015 Budget such as the setting up of a Development Bank as well as seed capital and venture capital. However it is becoming more and more imminent to see progress on theses initatives which need to be developed from proposals to actualizations which business can tangibly benefit from.
Another major concern highlighted by GRTU was the need for addressing unneccessary administrative burdens and related issues. Reference was made to a recent initiative to steer forward Malta’s e-Government services. GRTU welcomed this but explained that this would not succeed if it is not backed by a customer-oriented public service. There is evident need for training of public servants and adjustment of management processes to be sensitive to what delays and administrative burdens can cost a small business or a self-employed person.
GRTU also highlighted concerns related to unfair competition which need to be implemented to empower Maltese businesses. Deterring policies through fiscal policy initiatives such as a similar set-up to the Guardia di Finanzithat the government had promise in the 2015 Budget need to be implemented. On the other hand there needs to be incentives to support Maltese businesses to open up their markets such as through online means and e-commerce. Investing in supporting Maltese businesses to make the shift towards including an online business model would boost our economy.
Last but not least, GRTU also spoke about education-related issues whereby it is agreed and accepted that Malta’s most essential resource is its human resource. Whilst acknowledging positive initiatives being undertaken at the moment such as through apprenticeship schemes or the alternative learning programme, one needs to ensure that the various entities concerned are coordinating the different initiatives towards the same direction. While the country has done well to aim for the top, one may need to revisit the value of medium- or low- skilled jobs. The country has invested in post-secondary education but it is evident thatour education system at compulsary levels is failing a segment of children. This needs to be addressed in order to ensure their motivation to learn through different styles and across vocational subjects.
In terms of reaseach and innovation, GRTU described the need to achieve better results in this sector as an opportunity to link research and its usefulness to industry. Research occuring at the University of Malta and now at MCAST needs to be opened up to small businesses as an opportunity to tap into this resource since micro-enterprises do not have the capability to house research staff and departments. Research and innovation is also happening at SME level but is not necessarily being captured and maximised.
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