Anton Borg will soon be stepping down as the president of the Malta Chamber of Commerce, Enterprise and Industry, but one of his biggest frustrations over the past two years is the lack of progress made in fighting unfair competition.

For some time, the Chamber has been complaining that merchandise was being brought in by road transport from Sicily which was not abiding by fiscal rules. And the introduction of excise tax to replace eco-contributions would only make it worse, he said, unless it was properly controlled.

The government has acknowledged the need for market surveillance but the Chamber has been waiting in vain for any attempts to control what is being brought into the country. One problem is that as intra-EU trade, checks cannot be too intrusive, as that would go against the idea of a single market.

“We believe every vehicle should be scanned electronically to reveal what it is bringing in – but they would not need to be stopped and searched. There must be a department backing up the scanners to ensure that what is being seen correlates with the documents. Sometimes not even a manifest is presented – in which case the person should either be made to hand one over there and then or by a certain deadline. It is simple and we do not know why it has not been implemented.

“The government has its own ideas and wants to see if they will work. Let’s see if we one day opt for this very simple and effective solution,” he shrugged with frustration.

He was also dismissive of the excise tax, saying that the net effect on the economy was €1 million from a total revenue of €5 million.

“If I were running a country, would I introduce a tax which was going to bring me €1 million? I would not even bother. It is not worth the administrative hassle. For us, the worrying aspect is that these excise taxes could be increased in every budget.

He also referred to claims of poverty, which have been tied in to calls to raise the minimum wage: “There is a contradiction in introducing this excise tax. The government is saying that some people cannot make ends meet but then taxes the shampoo that everyone has to use? It is not a consumption tax like VAT as these are basic products like shampoo and nappies,” Mr Borg said.

The Chamber, along with other employers’ associations, is awaiting feedback to their joint proposal for the minimum to be left as is – but to impose a deadline of a year after which the employee would have to be given a raise, which would be repeated in the second and third year. This was suggested to the consultant appointed by the government, economist Gordon Cordina, and they are now waiting for feedback.

“We do not believe that raising the minimum wage will solve the problem of poverty. However, raising it will cause havoc in the labour market as there would inevitably be a cascading effect. Of course, we also believe that people who cannot make ends meet need to be helped.

“The mandatory increment would work out to, say, around €150 a year and it would not be worthwhile for the employer to lose that person and train someone else, for that amount,” he said, acknowledging that if anything it would be in the employers’ interest to train the employee to improve their value-added contribution to the company.

“It would reduce the number of people on the minimum wage with time and it avoids creating a big problem in terms of the domino effect by raising the minimum wage.”

Another issue which employers’ associations have been fighting has been liability for disabled employees – even when the employee has not notified the employer about that disability.

“You do not want a person who is disabled to suffer any accident at your place of work. Why should I employ someone with a disability that I am not aware of – but still be responsible if anything happened to them? This has happened. Imagine if I put someone to work on a grinding machine who has epilepsy that I am not aware of? If it is a data protection issue, then let us say so and solve it.

“There was an incident in Scotland where a Scammel went off the road and killed six people, because the driver had a medical condition. In the UK, the British Medical Association has now issued instructions that its members must inform employers’ of a disability irrespective of the employee’s wishes to keep it private. Doctors here must accept this. Why are we scared of doing this? No one takes ownership of this issue. We have talked to everyone, at the MCESD, the Civil Liberties Minister, and so on. But we all go our own way and nothing happens. What are we waiting for? The first major fatality before action will be taken?”

There is another issue that affects almost all the Chamber’s members: traffic. Mr Borg shook his head wearily: “The Prime Minister needs to decide who is going to take the bull by the horns and take ownership of the problem.

“The Chamber is ready to identify short medium and long term proposals and we have members who are ready to contribute towards this. The first is to inculcate a culture of car-sharing,” he said.

The Chamber wants people to understand how much it costs them to use a car: if four people working at an industrial estate, who start and finish work at the same time, were to share a car, they could save €10 a week each.

“Put that in the perspective of the average COLA of €2.50 over the past years!” he said.

He complained about the Mediterranean culture that anything goes, especially haphazard parking, and knee-jerk proposals to limit the times that delivery trucks could be on the road.

There is at least some glimmer of hope that the new Kappara and Addolorata junctions will make a difference, but he warned that the flyover concept allowing direct traffic to flow through in these two places was not enough.

“Without a doubt there are other places which need to allow direct traffic to flow. An easy solution would be to use the Brussels model with roads dipping under junctions through tunnels. You don’t need a fly-over. I am sure it is much cheaper,” he said.

An issue which has perhaps not received as much attention in the media is the decline in English language students, the only sector of the economy to see negative growth. In 2014, around 83,000 students came to study in Malta, with a reductions in both 2015 and 2016.

There is at least some glimmer of hope that the new Kappara and Addolorata junctions will make a difference, but the flyover concept allowing direct traffic to flow through in these two places was not enough

“A reduction of 13,000 is very worrying. Admittedly, countries like Italy have introduced English much more widely into school curriculums so it is obvious that there would be a decrease from there. But the real bottleneck is visas,” he warned.

The decline is particularly important for the sector as visas are required by students from the southern hemisphere or Asia, who help schools overcome the seasonality of the sector, making them more sustainable.

“This won’t be solved by farming out the issuing of visas to the embassy of another country, which is what we did, as that other country may have a vested interest in not processing that visa.

“We have asked the Foreign Ministry to review this policy: not the use of another embassy as we do not have the resources to have an embassy in every country – but to study very well which country to give it to,” he said.

The Chamber has lobbied on behalf of its members on various issues: when the Libya crisis erupted, its task force helped – with the government’s cooperation – to resolve many problems faced by companies working there which had money or stocks tied up.

“Without the Chamber lobbying – and without the government’s help – a lot of companies would have suffered,” he acknowledged.

The problems in Libya are hardly over, with news roller coasting from negative to positive all the time.

He admitted that it was too early to say when an end might be in sight, even though timing will be crucial for those businesses that want to get first-mover advantage once opportunities became available.

That does not mean, however, that there is nothing companies can do now: Mr Borg believes that they should be preparing logistics routes which would link Asia, particularly China, with North Africa.

“There is a business opportunity to attract companies, say from China, to open a logistics centre in Malta in a free zone area. If they want to transfer the goods into the EU, they would pay the Common External Tariff, but if they want to send to goods to areas outside the EU, like North Africa then they would not need to pay duty.”

The idea has plenty of support: members from 50 logistics companies came together become members of FIATA, the international association for logistics companies.  A sub-committee was also set up – but their enthusiasm was dampened when no one submitted a bid for the logistics hub at Ħal Far, and the request for proposals was reissued by the government without changes.

Mr Borg has reservations about the way the concession is being offered: “I am personally not so much in favour of having one location as an extension of the Malta Freeport. I think logistics would work better if parts of premises were designated as a free zone area – like bonded stores – but controlled through technology and documentation.

“Unfortunately, the government is still going down the path of using the Ħal Far Groupage area and centralising it there. We have to give the government time to see whether this will work,” he shrugged.

“In theory it would not be wise to give it to one operator but in practice, when you see the size of the operation, it might be… And Malta Industrial Parks is not a solution: it is already farming out the running of the industrial estates to us, so why would I give something like that to them? I don’t think it is their remit.”

The memorandum of understanding between MIP and the Chamber on industrial estates has had patchy success. Mr Borg said that just as the success of business councils depended very much on the people in the committee, so did tenants’ associations.

However, the problems run deeper than just personalities. One was that there were huge differences between industrial estates – but all were being squeezed into the same format.

“For example, Bulebel and Technopark have clearly contained boundaries. But Marsa is much more diffuse with main roads criss-crossing it so it becomes much more complicated. It was important to appreciate that you could not have a ‘one size fits all’ template as estates differ and therefore need different solutions. So each agreement is now being negotiated separately.

“We do have new tenants associations being formed, some of which are more organised than others. We are not satisfied with the time it is taking but it depends on the tenants. Some of them need to stop complaining and do something about it,” he said.

Of course, it is not only local but also external factors that affect its members, Brexit being an obvious one.

“It would be very presumptuous to say that we know what the effect of Brexit is going to be on Malta.  We did a small survey just after the results came out which may have only reflected the impact on certain companies. We feel that although there are companies that will be hit, the number is not large – even though the impact on those few might be significant. Even if the outcome might be positive, there might still be a period of painful adjustment,” he added.

“There is one definite consequence. When a lower income country joins the EU, it reduces the average – which is why Malta lost its Objective One status. When a large country with a large GDP leaves, the average will also go down… This will almost certainly be the last programme that Malta will be a net beneficiary. We should be ready for that.”

Mr Borg will leave the Chamber with more members – but just as importantly younger ones. This was not the result of good fortune but deliberate outreach programmes: for example, it reached an agreement with Junior Achievement Young Enterprise and also managed to create the successful Leaders for a Day event, through which winning students got to spend a day with a CEO.

It also launched a scheme with its three Gold Partners enabling them to introduce members of a certain age to the Chamber who were exempted from fees for the first three years.

And yet, so many of the issues that he faced two years ago remain unresolved. In spite of the fact that the Chamber’s members employ around 70 per cent of the country’s workforce – 95 per cent in the case of the financial services and telecommunications sectors – its voice is not always enough. The plodding pace of reform and resolution is one his predecessor will need to be prepared for.

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