MPs complain of poor government coordination, bureaucracy

Parliamentary Secretary Edwin Vassallo's claim that the battle against bureaucracy was being won was the joke of the year, Labour MP Leo Brincat has said in parliament.

Representatives of business organisations such as the GRTU and the MHRA were continually complaining over red tape, he said during a debate on government policy on SMEs.

In February, Mr Brincat said, Mr Vassallo's secretariat organised a seminar about bureaucracy where the biggest number of participants were representatives of government departments with hardly any links to SMEs and hardly anyone from SMEs attended. Although the idea of holding the seminar was good, the exercise would have been fruitful had those involved been able to air their complaints and suggestions.

Malta, Mr Brincat said, needed to improve qualitatively and quantitatively. What results had the Kordin Business Incubation Centre yielded so far?

The new financial assistance scheme for the self-employed, promoted by Mr Vassallo together with BOV, already had a precedent with Mid Med Bank, when that bank existed in Malta.

Mr Vassallo frequently complained that civil servants were not delivering a prompt and efficiency service, but what was he doing about this state of affairs? If Mr Vassallo lived to his promise to resign if bureaucracy was not defeated, then he should have left his post a long time ago.

Mr Brincat said Mr Vassallo was operating in a vacuum and lacking support from his ministerial colleagues. He was like a person who was trying to go up an escalator that was going down.

Mr Brincat said the GRTU's survey of trade fair performance confirmed yet again how disposal income and purchasing power had dried up. Some 58 per cent of exhibitors had reported a downturn in sales and only 14 per cent reported an upturn. Sales had not only gone down, but so too had the number of visitors to the fair.

The EU had now also confirmed that Malta had fallen back in the implementation of directives on the internal market. The EU had said that Malta had "much to do" in this sector.

The Maltese economy continued to remain stagnant while the economy in Singapore had grown by 11 per cent in the first half of this year, despite the SARS scare.

Mr Brincat said much was said about a "one stop shop" but would Mr Vassallo guarantee that Malta Enterprise would really be a one shop stop?

When would e-commerce really take off in Malta? Clearly Malta was lagging in this sector, even though many households and businesses now had computers.

The implementation of the European Charter for Small Businesses was a responsibility of everyone. But Malta Enterprise had called for the charter to be championed by the highest authorities, in the first place. Both ME and the GRTU had called for greater coordination among government departments.

Benchmarking of best practice needed to be carried out as a way to improve competitiveness.

The EU hoped to become the most competitive and dynamic economy by 2010 in terms of the Lisbon agenda. This was a major challenge which was difficult to achieve in the current investment climate. It was a similar challenge for Malta, which needed to cut production and transport times, improve competitiveness and create new export markets.

Malta needed to give greater importance to the creation of public private partnerships.

It also needed to boost the knowledge economy, aimed at the production of higher value added items, a boost which could only come with a greater emphasis on education and training. Malta could develop a competitive edge in areas such as software development and become a regional centre for such activity if there was a proper focus.

Concluding, Mr Brincat called for the setting up of an employment task force involving the private sector, aimed at creating new, quality, productive jobs, thus addressing one of the biggest challenges which Malta faced. A plan for job creation would also tie in with the Lisbon agenda which the EU was seeking to meet.

Labour MP Chris Agius spoke on the role of SMEs within tourism, saying they formed an important component of this industry.

The government, he said, needed to heed complaints made repeatedly by the Malta Hotels and Restaurants Association for better legislation on this sector, proper enforcement of regulations, particularly against price abuses, and an overall stronger government focus aimed at boosting this sector.

The loss of interest in tourism had seen the number of arrivals drop by two per cent so far this year. Mr Agius also underlined the role which customer care officials should play within government departments, and said much headway remained to be made in this area.

Turning to competitiveness in manufacturing sector, Mr Agius said this should be a government priority area, not least because of increased job concerns. A better investment climate needed to be created. What had been done so far, unfortunately, did not seem to be translating into new foreign direct investment and job creation.

Certain utility services, such as electricity, in Malta were still too expensive when compared to other countries, a situation which also did not encourage new business. Adding new taxes, such as the eco-contribution, would not help matters.

Nationalist MP Joe Falzon underlined the private sector's role in the economy and said businesses needed to look beyond sectors where labour costs were exorbitant.

He called for a strategy to improve industrial estates and to create new industrial zones for SMEs, with a particular emphasis on speeding up the processing of applications for premises or land by business start-ups.

Industrial parks, he said, should be planned from the outset to provide all services, including waste management. Such initiatives reflected seriousness and helped to attract investment.

Communications and Competitiveness Minister Censu Galea said it was no coincidence that the number of self-employed people was currently by far the biggest in several years. But the terminology of "self-employed" needed to be looked at closely because there were several categories of people who fitted this description. One of the greatest developments had been in the IT sector.

Every person with initiative who chose to do business on its own was self-employed, with varying degrees of success that could not all be measured with the same yardstick.

Referring to a seminar held by the government recently, Mr Galea said the questions that the seminar had sought to answer were: why had the required synergy had not yet been achieved?; why were there some who still did not yet understand the need of implementation of the European charter on the self-employed?; why some were indifferent towards SMEs?; and what needed to be done to acquire this synergy?

Referring to opposition remarks on a drop of business at the trade fair, Mr Galea said many questioned the purpose of the fair when good opportunities and bargains were made available to buyers throughout the year. A decision on the scope of the trade fair should be taken seriously, and in his opinion its future called for extensive study. It would be wise to analyse which were those sectors that had reported an increase in sales and those that had reported a status quo.

Mr Galea said he agreed on the need for growth of e-commerce. The Internet should not continue to be simply the tool for schoolchildren and surfers, but become the preferred tool of those who sought to do business overseas.

Malta, he said, was now living a new reality, forming part of a market of 450 million consumers. But it must ensure that the quality of its products was irreproachable.

The MHRA had complained that people who sought to uphold the tourism product had come face to face with indifference and finally desisted. But what were SMEs doing to avoid the sort of abuse that turned customers away?

Quality of service was what survival was all about, and all SMEs had their own responsibilities to shoulder.

Mr Galea observed that Mepa was the source of many complaints by SMEs. If Mepa did not exist, the country would be in a much sorrier state than it was in.

Regulation was important, but he regretted that for the Ta Qali Crafts village project, Mepa had imposed 23 conditions, not all of which were seen as justified and which delayed work.

The self-employed and SMEs as a leading motor of the economy was not a cliché, but a matter of policy that the government had every intention of pursuing, concluded Mr Galea.

Other speakers will be reported tomorrow.

The debate was concluded by Parliamentary Secretary Edwin Vassallo who said that one of his purposes was to improve legislation where it affected businesses. For example, he said, he no longer wanted to see legislation written by technocrats who laid down that when a law was broken businessmen would have committed a criminal offence.

He would also continue to work so that the government considered its decisions not individually, but in the context of other decisions taken over the years.

He would also continue to chip away at bureaucracy and would insist that government departments and authorities improved the quality of their service.

SMEs, however, should also shoulder their responsibities, especially by not seeking to evade tax.