Labour will reform Malta Enterprise

The Labour Party views Malta Enterprise as unsuited for current needs and will reform and rationalise it within six months of taking office, the opposition spokesman on industry Chris Agius said in Parliament.

Speaking during the debate on amendments to the Malta Enterprise Act, Mr Agius said the Bill was full of good intentions but there was nothing concrete as far as incentives were concerned. The industry minister had said in his introduction that new incentives would be introduced shortly. This was a step in the right direction. However, he would have liked to have seen some of these incentives spelt out in the Bill itself.

The Bill was extending the functions of Malta Enterprise (ME) but industry was now being grouped with other sectors in one basket and the corporation would no longer be focused solely on industry.

Mr Agius complained that the minister would have excessive control over ME. He asked whether certain provisions were meant to give the minister a carte blanche to muddle in the corporations' decisions. If there was disagreement with ME, would the minister have the final word?

The Labour MP insisted that Malta Enterprise needed to improve its efficiency. Potential investors were being made to wait too long for decisions on eligibility for incentives. Deadlines should be set and met. A number of investors were still waiting for factories they were promised a long time ago. Bureaucracy and red tape were still rife.

Manufacturing industry was changing, but it remained important for Malta and the MLP was promising to give it the importance it deserved.

When Malta Enterprise was formed it was said that this would be a one-stop-shop to reduce bureacuracy. But more inefficiences had crept in and another company, Malta Industrial Parks, was created to manage industrial estates. This seperation of management of the industrial estates from Malta Enterprise created conflicts and increased bureacracy.

Mr Agius underlined the need for Malta to train its young for the future, including SmartCity. It was a good sign that the number of students furthering their education was growing but it was still too small. No wonder that 41 per cent who are registering for work wanted to do the simplest of jobs.

The situation was made worse by skill mis-matches. There was also a marked difference between the number of students following traditional courses and science subjects.

Mr Agius welcomed the recent growth in internet-gaming, saying Malta had established itself at the front of this sector and needed to consolidate this position by also preparing its young people.

Unfortunately there had not been any consistent progress in the filming industry. Recently introduced incentives had been beneficial but more needed to be done. Rather than aim for blockbusters, Malta should aim for a steady stream of small productions and advertising productions. Facilities also needed to be improved and be better utilised, particularly the water tanks at Rinella.

Mr Agius referred to the Grand Harbour masterplan issued by the government, saying it was belated. It was Labour which had announced the plans for the cruise liner terminal, the Vittoriosa marina and the Connections project. Ten years ago the government revealed plans to redevelop No. 1 Dock but nothing had happened yet. The same applied also to Ta' Qali crafts village.

He said businesses were suffering under high government-induced costs and the battle against bureaucracy was not being won, Mr Agius said.

Edwin Vassallo, parliamentary secretary for small businesses, denied that the government was not giving importance to industry as claimed by the opposition. But, he said, the government's vision was broader and this Bill therefore spoke of enterprise and not just industry.

The purpose of this Bill was to instil flexibility so that all enterprises could be eligible for incentives and everybody's interests could be protected. Since this Bill consolidated various pieces of legislation, it also reduced bureaucracy. This was a further step in a process which started a few years ago with the amalgamation of the Malta Development Corporation, Malta Enterprise and the Institute of Small Enterprises (IPSE).

This Bill, he added, provided the possibility of greater assistance to enterprises with high value added because such firms were what Malta needed most for standards to rise.

This Bill, he said, was a result of the aggressive manner in which the government was working to attract new investment. This was legislation that would make Malta more competitive in a globalised market place. This would enable Maltese firms to be more active especially in the European market, making the best of the advantages of EU membership.

Mr Vassallo also spoke on assistance given to SMEs saying that, as a result of this law, one could now explore the introduction of incentives to enable more small businesses to buy the industrial space they occupied. The main concern, however, was that since the availability of land was limited, one had to be careful that this assistance did not cause upward pressure on property prices.

Noel Farrugia (MLP) said rising interest rates, the power surcharge and other government-induced costs meant that Maltese industries were seeing their cost of production rise and their competitiveness and market share drop. Another concern was a consistent increase in the price of essential items, eating into consumers' purchasing power.

This was a situation which was also common to the agriculture sector and there was concern over what would happen once existing subsidies came to an end.

Mr Farrugia said a proper assessment was needed over whether Malta was offering value for money to investors. Malta also needed to bring down its costs and help export companies in their marketing efforts.

Mr Farrugia said the MLP was well prepared to set Malta on a new direction to boost industry.

Frederick Azzopardi (PN) said that Malta was not only setting records in the attraction of new investment, but major multinationals already in Malta were continuing to invest here.

Apart from existing forms of assistance, the past year had seen the creation of a new venture capital fund to help new businesses. New incentives to help businesses in Gozo were also rolled out. Several new schemes to train workers were also launched. Malta also continued to invest heavily in education including specialised programmes in areas such as ICT.

It was no surprise, therefore, that the number of trading licences grew by 1,639 last year, 800 more than in the last full year of the Labour administration.

Malta had lost competitiveness in some sectors of the manufacturing industry, such as textiles, but it was more than making up for this through the attraction of new higher added value industries such as those in the aviation and pharmaceutical sectors and, more recently, in audio-visual productions.

Other speakers will be reported tomorrow.