Maltese business is crippled by bureaucracy and over-regulation, self-employed persons gathered at the annual conference of the Chamber of Small and Medium Enterprise (GRTU) told Prime Minister Lawrence Gonzi yesterday.

"Bureaucrats are jealous of businessmen. And certain people in administration purposely drag their feet when dealing with us because they think our investment comes from thin air," a small business owner exclaimed.

The comments addressed to Dr Gonzi ranged from a "low profits" problem being faced by pharmacists to timeshare touts and rigidities related to the Malta Environment and Planning Authority, and made the closing the most interesting part of the conference.

One businessman told Dr Gonzi he had lost an important investment from India because the police had refused visas for visiting businessmen.

One salient point raised during the conference, which embraced a wide range of professionals, businessmen and trades people, was the need to cut taxes. A few of those present said traffic wardens had become another burden on business as they dished out fines to badly parked delivery vans. "The reality is that there is nowhere to park in this country. We have an extra Lm200 monthly cost to pay fines because local councils don't want to cooperate with us," a self-employed person said.

But while claiming that the market was over-regulated, the GRTU told Dr Gonzi in a written statement that "too many" permits for shops were being issued and businesses were "eating each other".

The conference started with the results of a business survey based on last year, according to which 39 per cent of those interviewed claimed losses of at least 10 per cent over 2004.

One tenth said their income had gone down by more than 30 per cent over 2004, while 27 per cent claimed to have earned more than 10 per cent over the previous year.

Most of those who claimed that their income had dwindled last year blamed it on increased costs.

Speeches by Dr Gonzi and Labour Deputy Leader Charles Mangion followed the survey presentation, during which GRTU members present walked in and out of the hall to vote for the executive council. A few could be seen dosing off on their seats. Some listened attentively while one listener occasionally sucked on an unlit cigar.

Dr Gonzi said the government's policy was to continue lifting monopolies as well as to restructure those companies which had survived by sucking state funds dry for years.

"What we did with the shipyards, Sea Malta, PBS, Gozo Channel and other places we've restructured shows the government means business," Dr Gonzi said.

Reiterating his belief that the Maltese economy has "a lot of potential" while acknowledging that "over-regulation is indeed plaguing the country", Dr Gonzi said the government had embarked on a project to evaluate old and new business regulations through a better-regulation unit.

The government would second one of its employees to the GRTU for two years so that there would be close collaboration for the purpose of this specific exercise, he said. In line with what had been announced in the budget, the government had established a group of experts to make recommendations on how tax can be changed to create an incentive for entrepreneurship without undermining government revenue.

Dr Gonzi promised the government would decide on the use of funds allocated by the European Union after consulting the civil society in the coming weeks.

Labour deputy leader Charles Mangion said Malta needed small- and medium-sized businesses which were "an important source of wealth and not parasites".

Dr Mangion said there had been hardly any economic growth in the past five years and the self-employed and people working in medium-sized enterprises were being burdened by excessive taxation.

"Besides being a Member of Parliament, I practice as a notary and many self-employed speak to me about the problems they encounter," he said.

Dr Mangion criticised Mepa and said it has often taken decisions without considering the effect on business operators. One case in point, he said, was the Marsascala aquaculture zone in which Mepa had given its go-ahead without an economic study at hand.