Growth and sustainable public finances key ingredients for stable economy – Chamber
The Malta Chamber, Industry and Enterprise considers growth and sustainable public finances as the key ingredients in ensuring a healthy socio-economic balance and a stable economic future for the country, according to the organisation’s 2013 Pre-Budget Proposals.
The proposals were submitted to Finance Minister Tonio Fenech during last Friday’s MCESD meeting.
The Chamber said urgent and responsible decisions are needed with regard to a determined elimination of wastages, abuse, bad planning and mismanagement of public resources; promoting greater fiscal morality through lower tax burdens on those who honour their tax obligations; and instituting reform to ensure sustainability where it is needed.
The Chamber called for a reduction in the economy’s dependence on energy imports and flexibility for consumers either to fix their tariffs for a number of months ahead or to opt for a variable tariff. It also wants the setting up of a dedicated unit within Enemalta/ARMS to offer efficient services to high users.
It reiterated its call for a better alignment of wage and productivity developments through a COLA formula that incorporates productivity besides inflation and highlighted its opposition to an increase in the minimum wage.
The Pre-Budget Proposals say undue bureaucracy need to be eliminated in the public sector. “Besides the establishment of a single point of contact in Business First, there has been no tangible reduction in administrative burdens,” the Chamber insists.
The Chamber says measures are needed to enhance female participation in the labour market such as the extention of school hours and further childcare support.
It stresses that the civil service must complement Malta’s competitiveness and not act as a hindrance to it. “Additional expenses are incurred in the summer months due to half-days in the public sector – particularly at Customs. The Government must declare a date by which half-days will be phased out,” it proposes.
It is also opposed to recent calls for the current system of public holidays falling on weekends to be reversed.
The prosals include a call for the setting up a national competitiveness watchdog to ensure that the productive portion of the economy is not hampered by new measures, regulations and taxes that impact on competitiveness. “This could be done by extending the SME-test to all business and ensuring economic impact assessments of newly-introduced measures,” it says.
It says Malta must seize the economic opportunities which lie within the green economy sector with stronger impetus and calls for increasing incentivisation for commercial investment in renewable energy sources.
The Chamber supports the introduction of voluntary (third-pillar) pensions to supplement the present system. It says fiscal incentives and a sound regulatory system must be in place prior to implementation.
With regards to the compulsory Second Pillar, the Chamber believes that this could have serious social and economic implications. Consequently, “it is currently not in a position to consider this alternative until such time that precise details are made known about its possible implementation”, it points out.
The following are some of the recommendations by the Chamber:
Introduce more pro-active measures to enforce fiscal morality and eliminate the use of amnesties to evaders.
Lower tax burdens on those who honour their tax obligations.
Efficient functioning of a consolidated entity responsible for fiscal surveillance.
Introduce voluntary (third-pillar) pensions to supplement the present system.
Introduction of a reimbursement system for free medicines to eliminate wastage, abuse and facilitate better access to superior and innovative medication for patients.
Reduce the economy’s dependence on energy imports.
Allow flexibility to consumers to either fix their tariffs for a number of months ahead or opt for a variable tariff.
Set up a dedicated unit within Enemalta/ARMS to offer efficient services to high users.
Further measures to incentivise energy efficiency and alternative sources of energy.
Implement COLA formula review to incorporate productivity besides inflation.
Set up a national competitiveness watchdog to ensuring minimal economic impact of newly-introduced measures.
Set up a dedicated desk for business within the Central Visa Unit.
Ensure a healthy mix of legacy and low-cost carriers.
Continuous support to the tourism sector is expected particularly in innovative, high-value niche areas such as the English as a Foreign Language (EFL) schools, yachting industry and MICE segments.
Develop more yacht marinas and other related infrastructure.
Encourage resource consolidation among local companies.
Malta’s embassies should be supplemented with a trade and investment office.
Malta is to be marketed as a Soft-Landing Zone to North Africa.
Re-introduce Export Credit Insurance within limitations imposed by the EU.
Support the establishment of Business Councils to stimulate export growth.
Malta must seize the economic opportunities which lie within the green economy sector with stronger impetus.
Introduce a range of tax reliefs to investors who purchase shares in new smaller, higher-risk, innovative companies.
Create a legal/fiscal infrastructure to encourage high net-worth individuals to invest in local start-ups through a privately managed public/private revolving fund.
Ensure continuous investment to maintain momentum in the National R&I Programme.
Declare a date by which half-days will be phased out in the public sector.
Solve the 12 per cent Final Withholding Tax situation (on sales).
Introduce a Final Withholding Tax on rental income.