Spotlight on SMEs

The importance of small and medium sized enterprises was deservedly put at the forefront during the past few days through two important events. The first event was the national conference specifically dedicated to SMEs and the other was the laying of the foundation stone of a new industrial park for micro enterprises at an area known as Ta' Maġġi limits of Żabbar.

Over 30,000 SMEs provide employment to 67,000 people, that is over 60 per cent of our total private sector employment, more that the public sector and the manufacturing sector put together.

Along the years, successive Nationalist governments have strongly supported private enterprise through various important reforms. The fruits of these initiatives have brought the desired results. On the other hand, we have no intention of resting on our laurels.

More recently, we continued supporting the creation of new enterprises and the strengthening and growth of those already operating through a number of measures that where intended to make life easier for businesses. Of particular mention are the simplification procedures to obtain trade licences and the more recent reductions in such fees; also millions of euros in public and European Union funds have been channelled towards the development of the infrastructure in micro enterprises. The sector has also benefited from measures adopted in recent budgets.

Assistance to SMEs was delivered in other forms too. Over the past three years, the government has provided over €38 million in cash grants, investment allowances, value added incentives and reduced income tax rates. We also appreciate that a continuous struggle for small businesses, on top of accessing finance, is the access to land. During the past 24 months, Malta Enterprise has provided no less than 81,000 square metres to SMEs where these have developed manufacturing, ICT, environmental and R&D businesses.

This year's pre-budget document gives ample attention to the needs of the self-employed and smaller companies. Clearly, the basic message remains: Don't make our lives difficult unnecessarily. It's not just an issue of reducing unnecessary costs but more of cutting unnecessary bureaucracy that consumes valuable time and that could be used more productively.

As a public sector, we need to appreciate more that our role is to facilitate and support the economy and its agents and not to burden it beyond what is really needed and necessary. SMEs will find the government's political will and a number of initiatives are well under way to support this commitment.

The pre budget document proposes the identification of ways of simplifying legislation, the revision of our enforcement system in order to ease burdens on the smaller companies while establishing simpler systems of financial reporting and at the same time continuing to reduce costs associated with regulatory authorities. On a number of issues, particularly the simplification of reporting, we are already at an advanced stage and simplified standards will be with us in the near future.

We are also being proactive on a European level. I welcome the efforts being undertaken by the European Commission on a Small Business Act. The aim of the EU is to come out with a package of measures aimed at tackling the perennial problems faced by SMEs, such as access to finance, lack of research and innovation and excessive bureaucracy.

This will receive our full support but my message to my European colleagues is not to limit this Act solely to a definition of objectives but actually to eliminate all SME-related legislation with the sole exception of regulations included in such ACT. This would truly mean less bureaucracy and the provision of the much-flaunted red carpet. Having said this, failure to achieve this on a continental level will not exclude us from following this route on a national level.

At the same time, working in close cooperation with the private sector is another key to success. Last Tuesday's laying of the foundations of the Ta' Maġġi micro-enterprises industrial park is an important step in this direction. This park covers 10,000 square metres of land and will be able to host 78 garages that can be developed by our budding SMEs.

This private park will soon be supplemented by the development of two other public industrial sites, where the government also hopes to involve the private sector in their running and development; one is in Mellieħa and the other in Xewkija. At the same time, private industrial zones, such as the ones in Mrieħel, Tal-Ħandaq and Mosta, are being gradually handed over to Malta Industrial Parks. This will ensure a more effective coordination of the upkeep services provided.

Official statistics show that we have an excellent track record in this area. Over 7,000 new small businesses were set up over the past couple of years. Encouraged with the results achieved, the cooperation of businesses themselves and their representatives, the government will keep envisaging new ways to promote the interest of the sector to the benefit not only of those involved but also the rest of the Maltese and Gozitan population.

Mr Fenech is Minister of Finance, the Economy and Investment.