Entrepreneurs warn against shocks to economy

In its drive to consolidate public finances, the government must not cause economic shocks by implementing “over-ambitious” measures to collect taxes, the Malta Chamber of Commerce, Enterprise and Industry has warned.

In its pre-Budget proposals published yesterday, the chamber said growth had to be the main focus of Monday’s Budget and to do so the government had to ensure the country was competitive by keeping costs low.

It said it was “unhappy” with the formula used to calculate utility rates, which was based on full cost recovery of an energy provider where there were no assurances of efficiency.

Turning to the cost of living adjustment mechanism, the chamber said it was not against compensation to employees but argued that the index should be linked to productivity taking into account sectoral growth.

Summer half-days in the public sector, the dismal service given by utility bills company ARMS Ltd, court delays and lengthy procedures at the planning authority were all identified as added costs to the private sector, which had to be addressed.

“The public service must align itself to the present needs of the economy and the private sector,” the chamber said, insisting bureaucracy was a cost.

On the environment, among others, the chamber recommended the government reduce industrial rents for companies showing environmental excellence.