Another mollycoddled industry whining for help

In these last few years Sandro Chetcuti, the president of the property section of the GRTU, has become a regular fixture on local discussion programmes. He'd be there with the other talking heads on those One TV programmes with weird acronyms for titles, lurking around in the Xarabank audience, and omnipresent on Smash TV.

Chetcuti seems to be magnetically drawn to microphones, and in common with the other fixtures on the local talk show scene he has a tendency towards repetition. His favoured theme is the plight of Maltese property developers, how the construction industry is the main pillar of the economy, and how the negative perception of his fellow titans of industry is far off the mark. Fair enough - I suppose that's what his job description entails - protecting the interests of the sector and warding off undeserved bad press.

However, with his latest offering to the media, Chetcuti has made a right pig's ear of attracting sympathy towards the construction industry. Sensing a lull in the local property market, he made an urgent plea, calling upon the government to act. There was an over-supply of properties on the market, Chetcuti moaned, and not as much demand. The government should stop flooding the market with social housing as it was "killing the property market and creating an economic crisis". The GRTU surveys show pretty much what everybody has known for a long time - that there is an oversupply of residential developments. Coupled with stringent banking conditions and a more cautious approach to loans, this is contributing to lower affordability and indecision by prospective buyers.

To rectify this state of affairs, the GRTU put forward several proposals including a moratorium on the payment of stamp duty for first-time buyers, and - wait for it - mixed use zoning. Chetcuti called upon the government to wake up and to legislate to allow commercial operations within residential areas. Otherwise, he warned ominously, the government would be assisting in the onset of a crisis. The measures advocated by the GRTU would help the construction sector to regain its rightful place within the Chetcuti universe - continuing to operate without any form of competition, however minimal, from the government.

The GRTU's property division representative should consider himself lucky for not having made his whiney complaint in the presence of sensible people. They might have been tempted to lunge for his microphone and use it as a weapon or at least as an ear plug. The form of government intervention requested by Chetcuti is typical of a mollycoddled industry the importance of which is blown out of all proportion to its contribution to the economy. Moreover, it is indicative of an industry which refuses to adapt to face present day realities and wants the government to help it out when the going gets tough.

A closer look at Chetcuti's statement will serve to highlight its inanity. In the first place, there's that plaintive whimpering about the oversupply of residential property. The GRTU seems to have overlooked the fact that the over-supply was created by its own construction industry members. They built the maisonettes which have mushroomed over the island. They created the urban ghettos of flat blocks everywhere. They kept on building properties which were very similar and would appeal to buyers with the same type of needs and budgets. The Maltese copycat trait was very much in evidence here.

Developers jumped on the mini-maisonette bandwagon in droves. Now we've ended up with a glut of bachelor pads and small flats without enough bachelors or nuclear families to fill them. Instead of observing demographic and market trends and responding to them, the construction industry continued to build more of the same type of unwanted units. Here's where a responsible union should have come in.

Instead of sending Chetcuti to militate against social housing with its relatively minor impact on housing stocks, the GRTU should have served as a platform to keep its members abreast with market trends and industry forecasts. This would have helped them to be more innovative in their approach, diversifying their product and exploiting niche markets. Property developers should indulge in a bout of breast-beating and 'mea culpas' if this was not done. If this wasn't done, they have no business blaming the government for the downturn in their line of work.

What with the news that several local companies benefit from capping of their utility rates, with the vast amounts of money being poured into the dockyard, with the pay-off monies paid to the association of hearse owners, and now with the GRTU's whine for government intervention, I'm beginning to doubt whether there are many Maltese businesses which know what operating within a free market environment entails.

The basic economic theories of supply and demand are ignored on a routine basis, competition makes local industries run and fold up, and any decrease in business is blamed on the government or an unappreciative market. We may be labouring under the illusion that the Maltese economy is a vibrant and open to new ventures and ideas. If the key players on the local market subscribe to the Chetcuti type of thinking ("Business is bad. Woe is me. Government must act") I'd say we still have a long way to go.

cl.bon@nextgen.net.mt