All stakeholders must work together so that the measures in Budget 2013 are implemented without delay under a new government, the Malta Chamber of Commerce, Enterprise and Industry has urged.
ICT merits the same national consensus as financial services
Budget 2013 was shelved after it failed to pass through Parliament in November when a member of the Government voted with the Opposition and a general election was called for March 9.
“We must all work together to get the measures of the Budget off the ground as soon as possible, whichever party is elected to government in March,” director general Kevin Borg told The Times Business. “We must limit the damage. The Malta Chamber was satisfied to see many of its proposals included in the Budget for 2013. We believed that the Budget benefitted the business community. We must continue to strengthen our core competencies so that there is further growth in our most successful sectors. However, we must not take anything, including our wealth, for granted.” Mr Borg indicated the most important Chamber proposals which were included in the Budget speech as the reduced income tax burdens, renewed investment in training schemes, a guaranteed longer period for feed-in tariffs for commercial installations, a business angel network for Maltese start-ups, and tax relief for investors in equity in higher risk innovative companies.
Mr Borg cautioned, however, that much more work remained to be done across key sectors including manufacturing, yachting, ICT, financial services and tourism if Malta’s competitiveness is to be safeguarded and strengthened.
He explained how ICT merits the same national consensus meted out to financial services, so that it is spared political controversy, while more quality and professional ICT resources are needed to sustain growth. A partnership, similar to Finance Malta, should be set up to focus on all the aspects of wealth generation through ICT.
The Malta Information Technology Agency should continue to provide governance and manage contractual relations and should not revert to competing with the private sector. The local IT industry also needed more specific support to internationalise. The e-Skills alliance between the industry and academia has been very effective and should be strengthened.
“Yachting continues to offer strong, untapped economic potential,” Mr Borg explained. “But it remains critically restricted by the lack of proper infrastructure and berthing facilities. So far only temporary pontoons have been provided by the Royal Malta Yacht Club and Kalkara in the summer, while direct competitors, including Sicily, are investing heavily in the sector. It was pledged that the potential of Marsamxett and Haywharf would be examined but very little progress has been made despite discussions with the authorities.”
While the financial services sector is expected to pursue its growth path, developments within the European Union related to a banking union, the financial transaction tax and the financial activity tax will have an impact on the growth momentum. The Malta Chamber warned that considerable risk is also posed by European politicians’ statements on fiscal harmonisation.
Mr Borg emphasised that the country needed to continue to protect the achievements of recent years while strengthening the regulator. The shortage of specific skills – particularly specialised legal and actuary capabilities, and disciplines required by the funds industry – continue to hinder some sectors’ growth and a solution to realigning educational programmes with the industry’s needs might be an initiative similar to the e-Skills Alliance.
“Travellers from new markets need to be attracted beyond the traditional markets like the UK and Germany,” Mr Borg said, turning to tourism. “The Malta Chamber feels that more needs to be done to attract tourists from non-European markets like China, Japan, India, South Korea, the US, and the Gulf but issues with visas need to be addressed. We propose that a dedicated desk for business be set up within the Central Visa Unit.
“The sustainability of Air Malta remains the most important factor to meet the challenges related to accessibility. Low-cost carriers have managed to increase the numbers in the shoulder months but the Malta Chamber believes in having the right mix of both low-cost and legacy carriers. We also await the successful outcome of Air Malta’s restructuring.”
Mr Borg added further investment was still required to support niches like the English tuition and boating industries, and the meetings and incentives business. Slacking spoken English standards, the lack of fiscal incentives for host families, and rising utility costs affecting the entire tourism sector needed more attention.
The Malta Chamber has made proposals to restrain rising operating costs in the manufacturing sector. Ongoing incentives are needed if manufacturing is to be marketed better to attract young people to its fold. The lack of students pursuing scientific and technical education threatens to hinder the sector’s advancement. The current and future workforce need to be equipped with the skills to compete in the global marketplace where there is a rapid rate of technological advancement, Mr Borg stressed.