Labour means business

Today week, Marlene Mizzi and her Labour business forum organised a meeting for entrepreneurs – big, medium and small – operating in the southern region of Malta.

... it is of the essence that the red tape smothering economic activity is cut and government costs reduced- Helena Dalli

The meeting was well attended and the topics broached varied from family-friendly work conditions for the self-employed and their employees to the impact the closure of the Jerma Palace Hotel has had on businesses in the area. Labour leader Joseph Muscat and us MPs for the region were there to listen and note.

Attendees spoke about the pre-election let-the-sunshine-in phase and how four months before the last election Francis Zammit Dimech, as Tourism Minister, had gone to Marsascala and invited Marsascala business owners to put forward ideas that could serve as a basis for the enhancement of the locality.

But, as one restaurant owner put it, that was then and this is now. Entrepreneurs have railed helplessly over the years since the minister had announced that the government had identified Marsascala as one of the priority areas for development, along with St Paul’s Bay and Pembroke, and is now but another loop in the chain of this government’s broken promises.

These pledges have entered the government’s annals of amnesia and economy with the truth along with another project the government said it had in mind for Marsascala: that of transforming the square in front of the church and building a new road which leads to the school in order to avoid traffic jams in the heart of the village. This, together with the need for a long-term plan aimed at stimulating business activity slowed down by the closure of the Jerma Hotel. Many of the grievances revolved around this matter that has been neglected by the government.

Another business owner pointed at how the government’s blend of incompetence and senseless rigidity with self-employed people - who were risking their money and providing jobs – would be a fascinating scene if one were a distant bystander. The bungling and intransigence are unrivalled. Let’s take just one instance of the government’s collision with the real world. See with what insouciance entrepreneurs are being jailed for not keeping up with what Dr Muscat has rightly called “legalised and institutionalised usury” at our VAT Department.

Self-employed people who owed VAT have not only to pay fines but daily interests over the money due and a further interest, thus compounding the total amount. Before paying off what they owed, they are first asked to settle the interests and fines. Therefore, no matter how much they pay, they would still owe money to the government.

Needless to say, dues have to be paid by all but dealing with business in this way is yet another self-inflicted black eye for the government. It is not only harming enterprise but, in the long run, it is harming itself by making it so difficult for these so-called operators of the motor of our economy to work and flourish.

Inevitably, the problem of energy costs was brought up. As one person said, “the big companies have voiced their problem with this before the last Budget, imagine the situation for those running small enterprises with energy prices creating cash flow problems as they struggle to keep up with the price of electricity, water, petrol and gas. This is killing enterprise... We find it hard to make ends meet... Then we are sent to jail... This is destructing us when the government should be helping us to do well and expand”.

Another aspect the entrepreneurs were incensed about is the government’s excessive bureaucracy. This is an old chestnut but a problem that remains unsolved nonetheless.

The Global Competitiveness Report (2011-2012) of the World Economic Forum points out the fact that Maltese businesses find it difficult to get information about changes in government policies and regulations that affect their activities.

The report criticises the lack of transparency in government policymaking and points at favouritism in decisions taken by government officials. Those who have no contacts in government have less probability of doing as well as they should and invariably find official doors slammed to their faces.

As another attendee put it, the government is so cut off from these realities, that in certain cases they have been left with no option but to give up, pack the business up and look for a job. This is not a generalisation. It is supported by data showing SMEs in EU member states contributing towards an increase in employment while in Malta the number of people working in SMEs has decreased. Thus, it is of the essence that the red tape smothering economic activity is cut and government costs reduced.

The general idea at the forum was that entrepreneurial spirit is being suffocated.

Well done to the Labour business forum for this exercise in listening. It has certainly helped those present to understand better the realities of the business class that need to be addressed without further procrastination so as to push into reverse the current dismal business trajectory.

Dr Dalli is shadow minister for the public sector, government investments and gender equality.