Facts remain sacred

It was with some interest that I read the Talking Point entitled Two Chambers In Contrast by Karm Farrugia (October 17).

Mr Farrugia decided to tackle the differences he sees in the budget proposals put forward by the Malta Chamber of Commerce and Enterprise and the study carried out by the Chamber of Small and Medium Enterprises - GRTU.

I will surely not comment about opinions expressed in Mr Farrugia's contribution, though the article gives an unmistakably biased critique of the Chamber's proposals.

But, as facts are sacred, the Chamber cannot let some of Mr Farrugia's statements go by without reply:

a) Mr Farrugia states that the Chamber is "assuming that the country's economic fundamentals are strong..." In fact, the Chamber did not assume this. Rather, it advised the government to treat the strengthening of the economic fundamentals as a major priority.

b) In his missive, Mr Farrugia states that the Chamber's "accent is principally on taxation, energy costs, pensions reform and rent laws". One of the Chamber's strong positions is about reform in general and the enhancement of competitiveness. The Chamber, in fact, stressed with the government the need to address the inherent structural weaknesses that are impeding stronger economic growth.

c) As if to try and ridicule the Chamber, Mr Farrugia states: "If only, however, its draft presentation had been shown to an economist before publication so that a miscibility or two, with probable misconceptions, would have been avoided..." The Chamber's proposals were in fact discussed with two economists; but I don't think this would have made any difference to Mr Farrugia's reactions.

d) Mr Farrugia insists that "Productivity is not raised through longer working hours". We beg to differ, because it does not necessarily mean we are talking about the same person working more hours in the same place of work. We favoured a change in the income tax parameters to entice more people to choose work over leisure because it would pay them to do so. In this sense, there is a direct correlation between hours worked, productivity and economic growth.

e) Mr Farrugia also states that "the nation has been living beyond its means with personal savings' percentage of incomes down to ground floor level" and that "a reputable Chamber cannot conceivably advocate an increase in the personal consumption factor".

Without entering into the merits of what makes an organisation reputable, it is indeed important to reiterate that decreasing tax burdens increases one's means in terms of disposable income, hence GDP is expanded through private consumption, with consumers at the lower end of the scale more comfortable to spend. Economic theory speaks of "income elasticity of demand" to illustrate this point. The local economy has relied on domestic activity for economic growth in the past years, and shall continue to do so in the short term, until the above mentioned structural reforms take place, allowing the much needed export-led growth.

f) Mr Farrugia feels that "the Chamber did not mean what was allowed to be written". It is good to know that, from his relaxing armchair, Mr Farrugia knows what the Chamber intended to say. On the contrary, the Chamber's public statements are faithfully based on two separate documents submitted to the government in relation to the 2007 budget - both of which were discussed and ratified by its officers' group and the council.

g) Mr Farrugia asks where we got the information that "financial intermediation" amounted to 12 per cent share of the GDP. For clarification's sake, the Chamber talked about the financial services sector, which official statistics credit as being responsible for 12 per cent of GDP. This fact is quoted in several official government documents and speeches.

Following his tirade on the Chamber's proposals for the 2007 budget, Mr Farrugia heaps praise on the study carried out by Joe Falzon on behalf of the GRTU. While Mr Farrugia is surely entitled to his opinion, one-sided contributions such as his are, at best, described as dubious as far as their objectives go. They certainly do not provide an objective and technical analysis.

Moreover, he uses the word "contrast" with negative undertones. I choose to believe that the contrast Mr Farrugia sees between the two organisations is simply a matter of fact! With almost 160 years of history, the Malta Chamber of Commerce and Enterprise lets its track record speak for itself. Credibility is gained through hard work, which is carried out in silence...

Mr Sciberras is PR & communications executive at the Malta Chamber of Commerce & Enterprise.