Labour launches draft plan for industry

Believing there is a future for the manufacturing industry, the Labour Party yesterday launched a discussion document called Action Plan For The Renewal Of Industry.

The draft plan is to be discussed internally by the party and with industry in time for a final document to be issued for approval by the party's general conference in July.

Party leader Alfred Sant told a news conference the plan speaks of two levels - a short-term level and a medium to long-term. The proposed short term measures were aimed at giving industry the push it required while the longer term ones were intended to reaffirm the niches that made sense for the country.

Dr Sant called on the government to be committed to industry. He said it should encourage industry to ensure that the manufacturing sector did not weaken but developed its potential. Incentives formulated for industry should reflect the aspirations of entrepreneurs and industrialists, he said.

The government had to listen to the private sector and help industry as much as possible. It also had to ensure there were mechanisms with which it could work with industrialists who had a good track record, Dr Sant said.

The Labour Party believed that industry's biggest problem was that it was losing competitiveness. One of the reasons for this was the exaggerated and unnecessary burdens created by the government.

These burdens and expenses should be analysed with the aim of coming up with measures, within six months, aimed at reducing and removing them. He stressed the need for training so that when a person loses his job he would immediately find alternative employment. The focus of restructuring, Dr Sant said, should not be that jobs would not be lost but that jobs would be created.

On Malta Enterprise, he said that although the MLP did not believe this to be an adequate structure for the aims for which it was set up, there was no time for organisational changes which took much time and energy when more necessary reforms were required.

So a Labour government would retain the existent structure at Malta Enterprise but would strengthen and rationalise it so that it would really operate as a one-stop shop. This rationalisation programme would be carried out within six months. He asked for an explanation as to why the contract of the Malta Enterprise chief executive had not been renewed.

On SmartCity, Dr Sant said this was a positive project but would not come about before at least another eight years. Moreover, there were many issues about the project which still had to be clarified.

Chris Agius, the coordinator of the document and the opposition's industry spokesman, said the country's main aim had to be to safeguard what it currently had while taking initiatives to attract new, profitable investment.

Mr Agius said that subsequent Nationalist governments had not given industry, which for many years had been one of the main pillars of the economy and a source of many jobs, the attention it deserved.

There were changes for which the country had not been prepared and because of this many factories closed down and a lot of jobs were lost.

The MLP believed that with corrective action, industry could again become a pillar of the economy. The aim should be to halt the loss of jobs and the drop in investment.

In its document, the party is proposing the setting up of a permanent task force presided over by the Prime Minister, with representation from the government and the private sector, to propose improvements to the incentives and aid given to new investment. This would lead to a reform of the Business Promotion Act.

The document recognises the double insularity problem of Gozo, its transport problems and additional expenses it has to face. It proposes that since all transport subsidies have to stop by 2011, a study should be carried out immediately to see how this loss could be compensated by other means.

Charles Mangion, the opposition's main spokesman for finance and economic affairs, said the draft plan of action was aimed at giving industry a new lease of life. For the MLP believed that the manufacturing industry could modernise to remain a pillar of the economy.

The document can be accessed from the party's website.

It is one of a series being launched in the coming days. Other documents to be launched cover health, education and a regional policy for Gozo.

The party will also be preparing a series of policy papers covering sectors such as the civil service, informatics and national heritage. These would not require the approval of the general conference.

Measures proposed in the document

¤ The adoption of the euro as national currency once the economy is strong enough to fully benefit from such a measure.

¤ The downward revision of enterprises' income tax, including on revenue not reinvested in the enterprise.

¤ The setting up of a task force to reduce burdens on the manufacturing industry.

¤ Reducing the VAT rate on restoration services of homes and other buildings.

¤ Giving special attention to the serious problem of internal and international transport costs faced by enterprises operating in Malta as well as the limited frequency of certain maritime routes.

¤ A revision of the capping on the water and electricity surcharge to reflect the different circumstances of large, medium, small and micro-enterprises.

¤ Embarking on projects in partnership with the private sector, for government land close to the sea and the airport runway to be developed for higher value added projects, such as the building and maintenance of seacraft, oil rigs, aircraft and helicopters.

¤ Increasing the tax credit for research and development and for expenses incurred in the training and higher education of employees.

¤ Introducing an incentives scheme to encourage banks and financial institutions to set up venture capital schemes to increase innovative scientific and technological projects in particular sectors.

¤ Revising the Business Promotion Act with the aim of introducing new incentives, compatible to EU and World Trade Organisation regulations, aimed at acquiring competitive advantages based on productivity, innovation and quality.

www.mlp.org.mt