Cham­ber makes pro-com­pet­i­tive­ness pro­pos­als for 2018 Bud­get

The Malta Business Weekly - - FRONT PAGE -

In its pro­pos­als to the Fi­nance Min­is­ter as part of the pre-Bud­get con­sul­ta­tion process, the Malta Cham­ber high­lighted the fact that en­ergy prices for medium-sized com­pa­nies in Malta are 42% higher than the EU av­er­age. This made the price for en­ergy, which is be­ing paid by Mal­tese busi­nesses, the high­est across Europe.

The Cham­ber’s claim, which was cor­rob­o­rated by the Euro­stat lat­est report on the sub­ject, also high­lighted how Malta re­mained the only EU coun­try in which in­dus­trial en­ergy tar­iffs were higher than do­mes­tic tar­iffs.

Con­sid­er­ing that elec­tric­ity rates typ­i­cally rep­re­sent 12% of over­head costs for busi­nesses, the Malta Cham­ber pro­posed a num­ber of mea­sures that would help busi­nesses over­come the un­com­pet­i­tive tar­iffs in­curred, in­clud­ing an im­proved Night Tar­iff frame­work, pur­chas­ing flex­i­bil­ity as well as the in­tro­duc­tion of pri­vately man­aged en­ergy distri­bu­tion sub­sta­tions.

The Cham­ber also fo­cused on a num­ber of labour mar­ket is­sues which were pos­ing chal­lenges to busi­nesses in Malta and in turn to the sus­tain­abil­ity of jobs. While the Cham­ber ex­pressed it­self in favour of Ac­tive Labour Mar­ket Poli­cies, it warned that con­tin­u­ous ex­ten­sions to leave al­lowances, the po­ten­tial in­tro­duc­tion of parental sick leave and the com­pen­sa­tion for pub­lic hol­i­days fall­ing on a week­end were con­sid­ered a “grave con­cern” which would only serve to fur­ther erode Malta’s com­pet­i­tive­ness.

At the same time, the Cham­ber ar­gued that Malta’s state of “full-em­ploy­ment” had cre­ated sig­nif­i­cant chal­lenges for the pri­vate sec­tor to fill its vacancies, both in terms of quan­tity and qual­ity. Propos­ing a so­lu­tion to this sit­u­a­tion, the Malta Cham­ber called on added ef­fi­ciency to the com­plex and bur­den­some work-per­mit ap­pli­ca­tion process for the em­ploy­ment of non-Mal­tese em­ploy­ees. The Cham­ber also pro­posed the set­ting up of ad­di­tional fast­track pro­cess­ing schemes.

The Cham­ber also ar­gued that, given the ad­vanced pace at which the econ­omy is cur­rently run­ning, it was not ac­cept­able that cer­tain gov­ern­ment de­part­ments were hin- de­r­ing eco­nomic op­er­a­tion, by ei­ther clos­ing shop al­to­gether, or pro­vid­ing their ser­vices at a pre­mium cost, in the af­ter­noons of the sum­mer months. The pri­vate and pub­lic sec­tor are the two sides of the same coin called the econ­omy, and they need each other to func­tion well. There­fore, the Cham­ber called on gov­ern­ment to find a so­lu­tion, at no cost to the pri­vate sec­tor, to main­tain uninterrupted ser­vices to busi­nesses dur­ing the sum­mer af­ter­noons.

The Cham­ber also urged gov­ern­ment to ur­gently es­tab­lish the pro­posed Malta Devel­op­ment Bank be­fore sev­eral op­por­tu­ni­ties of in­vest­ment were lost. It was im­per­a­tive for the Cham­ber, that the Devel­op­ment Bank would be op­er­a­tional within a rea­son­able time­frame.

Fo­cus­ing on the sub­ject of Ex­cise du­ties, the Cham­ber said it re­mained fun­da­men­tally op­posed to the no­tion of re­plac­ing Eco-con­tri­bu­tion with Ex­cise du­ties, as ef­fec­tively, this was not a re­place­ment but an ad­di­tional tax. The Cham­ber re­it­er­ated that this mea­sure pe­nalised re­spon­si­ble com­pa­nies as they were no longer re­ward- ed for tak­ing mea­sures to cover and re­cy­cle pack­ag­ing waste.

In its pro­pos­als for the Bud­get, the Cham­ber also urged gov­ern­ment to con­clude the well-over­due merger of pub­lic rev­enue col­lect­ing en­ti­ties. A cen­tralised and ef­fi­cient en­tity would al­low for the in­tro­duc­tion of a pol­icy that al­lowed the off­set­ting of monies owed to gov­ern­ment against other amounts owed by gov­ern­ment. This would al­le­vi­ate sig­nif­i­cant cash flow is­sues in spe­cific eco­nomic sec­tors that are largely re­liant on gov­ern­ment con­tracts as their main source of rev­enue as well as en­sur­ing a level play­ing field.

The Cham­ber also made a num­ber of other rec­om­men­da­tions re­lat­ing to In­fra­struc­ture, the na­tional air­line, RTDI and Ac­cess to Fi­nance. All the rec­om­men­da­tions dove­tailed into the Malta Cham­ber’s over­ar­ch­ing ob­jec­tives to ex­ploit the cur­rent pos­i­tive stand­ing of pub­lic fi­nances to rec­tify struc­tural is­sues that threaten longterm fis­cal sus­tain­abil­ity and to fur­ther en­hance the fac­tors that con­trib­ute to Malta’s com­pet­i­tive­ness.

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