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...
GRTU Malta Chamber of SMEs was very
satisfied with the meeting held last Wednesday with important leaders from the
new administration. GRTU was given the opportunity to voice its concerns and
proposals on various issues, many of which, we were assured directly by the
Ministers concerned, have already started to be tackled.
The general feeling
was that the Prime Minister and his Ministers understood and appreciated the
views presented and therefore we are confident that the outcome was a positive
one. GRTU officials will now follow up on the implementation.
This was the first formal
meeting with the Prime Minister since the change in administration; in the run
up to this important meeting GRTU has however met the Ministers, Parliamentary
Secretaries and the Principal Permanent Secretary individually. Last Wednesday
the GRTU Executive Council and top officials met not only with the Hon Prime
Minister Joseph Muscat but also the Minister for the Economy, Investment and
Small Business Hon Chris Cardona, the Minister for Sustainable Development, the
Environment and Climate change Hon Leo Brincat, the Minister for Energy and the
Conservation of Water Hon Konrad Mizzi, the Minister for Finance Hon Edward
Scicluna, Parliamentay Secretary for Competitiveness and Economic Growth Dr
Edward Scicluna and Chief of Staff Keith
GRTU's introduction was made
by President Paul Abela who thanked the Prime Minister for this opportunity. He
stated that today GRTU has a wide range of experience and the administration
appreciates the valid input GRTU gives. Mr Abela called on the Prime Minister
to generate more work in the Localities and incentivize the use of empty
buildings. He also called on the implementation of the Small Business Act
principles to the full benefit of SMEs, especially because the public service
still has a very negative attitude towards the private sector. He reminded the
Prime Minister and members of the Cabinet that 98% of Maltese enterprises are
micro and small and together employ 77% of the workforce. Mr Abela said the
GRTU believes in the Prime Minister's personal enthusiasm towards SMEs and
therefore he appealed to the Prime Minister to change this mentality and that
GRTU will be right behind him to do that.
Mr Abela also expressed his
concern on the current developments which picture employers as abusers of
employment regulations. He appealed to the Prime Minister not to allow negative
campaigns and ones which create uncertainty. Everyone is very concerned with the
influx of illegal immigrants coming to Malta, but there is another influx that
should also concern us, the numbers of qualified Europeans coming to Malta to
seek jobs. In the sectors GRTU represents there are more job vacancies than
individuals with the right set of skills and qualifications wanting to work in
these jobs. There is an enormous skills mismatch that needs to be addressed.
This is why GRTU has been arguing for the setting up of Sectoral Skills
There is also the problem of
the budget deficit and GRTU asked MCESD to convene with urgency and discuss the
European Commission report on Malta. MCESD unfortunately seems not to be seeing
this urgency and we feel it has not yet started working properly. There are
also very important Boards such as the Employment Relations Board which have
not yet resumed. It is important that the institutions are driven by capable
individuals that see the sense of urgency. Mr Abela's final remarks were that
there is a lot that needs to be done and GRTU intends to support the Government
throughout. GRTU is not afraid of the challenges that lie ahead.
Prime Minister's reaction
The Prime Minister thanked
President Paul Abela and he explained that he asked a number of members of the
Cabinet to be present in order to better tackle the issues GRTU presents. Hon
Muscat stated that he himself has not been the biggest fan of the
administration and agrees that the public sector those not really appreciate or
understand the private sector. He stated that the public sector is however
gradually changing its culture, attitude and mentality however they are still
afraid of change and innovation. The Prime Minister mentioned that the
Commissioner for Bureaucracy has been appointed also to have one single point
where to direct also suggestions and ideas. Dr Muscat re-emphasised that at no
time will he be defending the status-quo but he will be aggressively and
continuously attempting to introduce positive changes.
The Prime Minister described
the first Budget of this Government as an important element that will see the
increased engagement of the Private sector. Work on the Budget has already
started and they envisage that it will be in the form of a green paper,
something more practical and short. He also referred to the issue of the high
electricity and water tariffs and the water project that is being studied to
reduce these tariffs which should have a positive effect on consumers and
On the issue of skills
mismatch the Prime Minister stated that we have vacancies but we also have
jobless which underlines this problem. Many vacancies are being filled by
foreigners. We need to help our youngsters build careers where it is required.
The Government has started working on guiding youngsters better. Hon Muscat also
mentioned the introduction of an employability index which will help guide
youngsters without denying them any opportunity of studying what they want.
Vocational Training will also be tackled through the youth guarantee. The
Government is looking at best practices from Germany and Austria.
On working conditions the
Prime Minister said further discussions with the GRTU are needed. He said that
the reality is that the majority of employers are law abiding and therefore the
Government does not want them to be at a disadvantage and suffer unfair
competition. Government wants a level playing field both when it comes to
industrial relations and unfair competition in tendering for example or other
abuses. This, the Prime Minister stated, included having everyone paying
eco-tax. Dr Muscat said the Government knew about the abuses that were taking
place and was looking into a solution that abided with the EU law of free
movement in the single market.
GRTU's Director General Vincent Farrugia presented
the Prime Minister with a Dossier of issues which were very important for GRTU
and on which immediate Government action was required . GRTU officials went on
to present the issues that are very important for GRTU members:
GRTU said that the Crafts Village
is in a bad state. Many operators that used to work on genuine crafts have been
abandoned and neglected for many many years and have gradually left the
village. Thanks to the efforts of GRTU the operators within the crafts village
have once again become united within GRTU and an MOU was signed however we have
heard nothing since the change of Government. GRTU called on the Government to
help the crafts sector as it was very difficult for them to operate
sustainably. The Government stated that Ta` Qali is a priority but they need a
bit more time to find the best solution, we will start seeing tangible work on
the project by next year. The Government is now tapping EU funds for the
village. The aim is very simple, that of having a crafts village like all other
on micro companies
GRTU complained that micro
companies should not be required to submit yearly audits. It is a very large
administrative burden and cost on micro businesses and should Government do
away with such a requirement it would show a clear commitment to eradicating
excessive bureaucracy. The Government said it is working on this.
GRTU said that sale of fuel
has been reduced and we feel the main reason for this is due to contraband
fuels. There are ways to check this and track the source but raids are being
carried out in the wrong places, those that are already abiding by the law.
Government recognized that this is a problem and in fact they have already found some sources and action
has been taken. More in this regard is planned. Any abuses in this area should
be reported directly to Minister Konrad Mizzi.
Following GRTU's insistence
operations at the port are smoother however operators still have a lot of
problems with the CITIS office that opens just twice a week for few hours which
delays clearance. GRTU is also calling for Government to introduce a single
pass for operators to be able to go through all port facilities. Currently each
area or facility requires a different paper or pass.
areas under Malta Enterprise
GRTU explained how difficult
it is for many SMEs to be awarded a large space from Malta Enterprise within
the industrial areas which they need for their work. Government said that the
law will be changed shortly as currently the guidelines are old and the
realities of the private sector today are very different and many sectors today
fall outside this scope. In addition Government said that industrial areas
falling under Malta Enterprise will have changes within that area falling under
the competence of Malta Enterprise and involve MEPA to a much lesser extent.
There are a number of private
sector operators that are high consumers of water, amongst which are laundries.
These should be helped to reduce such consumption through schemes encouraging
change in machinery and other projects. Government said that a consultation is
currently underway and invited GRTU to submit its comments. In addition to this
a meeting will also be held with the Minister concerned.
Parking is the cause of many
problems and lack of business in many localities. GRTU explained it is very
hard for business in the main localities as their customers and employees
complain of lack of parking, loading and unloading is very complicated, deliveries
are very time consuming and wardens are on the watch eager to give fines. GRTU
mentioned that something needs to be done in these localities and Valletta
especially with all the complications of the CVA, coloured and reserved parking
spaces. Government said it is currently looking into ways in which the CVA
could change as well as other solutions for parking issues in the locality, an
example that was mentioned was the 15 minute parking on double yellow lines
being introduced in the UK.
The localities should be given
center stage on this issue. There is a lot the localities can offer to tourists
and having such a small country is the main reason why tourists should not be
concentrated in the main tourist localities. Incentives for alternative types
of lodging in other localities must be incentivized. The same principle goes to
more work and childcare facilities in the localities. This will give new energy
to our localities and alleviate traffic congestions. GRTU also mentioned that
we feel the need to have our voice within the MTA.
GRTU said that the taxes on IT
equipment are very high and evasion is rampant. The system needs to be revised.
GRTU called on the e-commerce scheme to be relaunched, it was a very good
scheme which should be reopened. In addition many students studying IT do not
continue studying because they cannot afford it. The schemes available are very
good but they require you to fork out the funds in advance. Government agreed
that a grant scheme must be introduced that will help student study without the
need to take out a loan.
GRTU called on revamping the
system as it is not clear and carries a high liability for owners of the retail
outlets as they are directly responsible for sales their sales people make. The
2% charged on goods bought with the smart card is too high. Retailers which are
a big stakeholder are not represented in the board determining the system.
These should be revised.
GRTU complained on the way
inspections are carried out at POS. The system includes very high fines and for
every POS you have to apply separately to get an exemption, a complicated
GRTU called on the launching
of employment and training schemes. These should be available constantly and
should not be bureaucratic so as to encourage employers to apply and be awarded
refunds. In addition all schemes should cater for handholding for applications
as many businesses fail over lack of paperwork or pictures.
Operators in the agriculture
sector need help. There are many issues that hamper them including the
administration of the pitkalija, incentives for investments and encouragement
of agriturism. Government said that it is currently working on an agriturism
policy and is welcoming feedback on the revision of the pitkalija.
GRTU explained that many
businesses that have been operational for years have suffered from this law. It
is an unjust law which disregards any payments made throughout the years, the
contract between the owners and the tenants, goodwill, etc… In 15 years nothing
will matter they will have to go out and give the keys back to the original
owners. This is a right they had and Government took from them.
GRTU called on Government to
take the city gate complex in hand and turn into something that merits such a
prominent position. The shops in city gate want something to be done, they want
to invest and have their mind at rest that their contract is a long standing
one. Government said it seeks to find a solution together with the shop owners.
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