Small businesses and entrepreneurs in Malta need love. Not warm words or misty eyed smiles. Small and medium-sized enterprises (SMEs) account for 95 per cent of all enterprises, 60 per cent of private sector employment and at least two thirds of all private sector turnovers.
No wonder then, we are heralded as the saviours of the recession, the golden children of the business family, the plucky ones who everyone relies on to pull Malta through.
We are there to employ people, make the world go round, and we're the cows whose milk keeps the government, with all the goodies it gives out to the presumably deserving, humming. Little wonder, then that the Government and the Opposition keep on repeating these warm words, and get all emotional and misty eyed when they discuss us. Given our absolute and utter dominance as employment providers, I'm not surprised at all at this. Entrepreneurs are people who want to do their own thing. Entrepreneurs know and live with but one fact – business life is all about gambling all on one throw of the dice, and calculated risk. Our fragile but roaring egos get stroked by one thing above all – sales and growth, opportunity to expand and excel. As well as a prodigious appetite for hard work and constant reinvention, you need pride, tenacity, luck and the right support from the right people at the right time to make it through. We multiply one euro into eight, and share that with our employees. We go without so as to have the resources to grow, and yes, sometimes to pay our most precious resource, our employees. Our health sometimes suffers, yet we still keep on going. Sometimes, the grave claims some of us as well, because excessive worry kills people. Employees have far less to worry about. But then again, can you imagine all Malta as employees? We would starve!
Yet, and this is what hurts, we are the most hated class of people in Malta. That's no surprise at all. Maltese people are riven by a "greenness" that has nothing to do with the colour of trees. In Malta, people envy with a passion moderately successful people. But they reserve their special hate for small businesses. And judging by the way people express themselves in blogs, it's a pretty righteous hate for them.
People hate us for selling them the goods and services they need. The civil service hates us because we are a model of efficiency that people used to gauge the absurd institutionalized inefficiency and waste in the public sector. The unions hate us because we refuse to bow to their demands to introduce inefficient work practices in our businesses, as they have forced the government and public entities to do. A case in point is Mater Dei. There exist about 150 different types of shift timings, none of them coordinated with the needs of the hospital, but all of them introduced to tally with the employees' extracurricular activities. These have been introduced over the years, and have become the hard to shift cholesterol on Mater Dei's arteries.
But do governments actually help start-ups to succeed? In nearly two decades of running small businesses, I have received no direct communication from any department other than to collect Tax, VAT, and countless NSO papers. The average experience of an entrepreneur seeking direct support or engagement from the State is little more in practice than a series of website-based services, providing endless links-within-links to something called Malta Enterprise, which is not really geared to help small businesses. Its a patchy, faceless and uninspiring national service. There appears no distinction between businesses that need help to grow and thrive, and those fighting to survive.
Let us remember one thing. Entrepreneurs shoulder risk that much larger enterprises, banks included, do not bear equally. Therefore the efforts to provide help should be greater, not lesser, than that provided to large enterprises.
This time, after so many empty plaudits, someone is finally listening. Tonio and his particular sidekick, as well as the Prime Minister, seem to have decided that SME's are really a motor of the economy. That someone has crafted some budget measures that may give enough impetus to turn Malta's SME's around and point them in the right direction, to grow, internationalize and bring in the wealth they do damn well deserve. Its hard not to be initially enthusiastic about this.
The measures announced in the budget will be beneficial to Small Businesses. Just hearing them gives hope to most of us who have been trying very hard to make ends meet in this recession. The measure to provide microfinance without ransoming house, health insurance, and any other property to banks is already a start. The amounts are admittedly small, but coupled with the 40% tax credit for investment, they don't become small anymore. One has to remember that the "20 Million for Industry"scheme during last year was a great scheme that promised much, and is delivering.
But the main thing is that SME's don't have to depend on banks for all their finance needs. This is important. I am disappointed with the local bank's offering during this crisis. Their offered "help" was by demanding even more security for every euro lent, to the point that as I speak, every euro lent is being secured by treble that amount in property, insurances and other assets. Banks have become more risk averse, not less. The Government knows this, heard the representatives of small businesses confirm it, and has done something about it.
All that remains now is to put it into practice by letting some government department mire each and every hopeful application for these funds in bureaucracy and red tape, having to fill endless documentation, and employing accountants and even lawyers when they get stuck.
Yes, in typical Maltese civil service fashion, we will mess it up, unless a body from the private sector is tasked with overseeing the success of the scheme. That is the proof of the pudding, where we separate the men from the boys. Will Tonio be courageous and do what's needed ? Will he have the balls to stand up to his civil service advisers?
We have to remember the monumental cock up done with the EIB funds issue some time ago. This scheme was entrusted to the banks, who killed it so well and so efficiently that no one benefited. The banks want to lend their money, not somebody else's. And they would much rather give consumer credit than business credit. Its just so much more lucrative.
But this government remains a government of contrasts and uncoordinated limbs, and it's unbelievable how it manages to mess up a feel good factor. With one hand, it is offering all this hope for new businesses. With the other hand, bands of Enemalta Hit Squads are roaming the country cutting off the electricity supply to businesses in difficulties. Hit squads from other entities are evicting others from factories, whilst daily the businessman is being faced with bills he cannot cope with in these hard times. The Tax Amnesty, a good thing, has such tight timelines that accountants are being driven mad to get things ready in time. The MFSA seems to be churning out fines by the day.
Is this the way to help small businesses in these hard times? If the Government is going to be driven by the civil service, the civil service will just demand their timely pound of flesh and God help those who cannot pay it. And it will kill these schemes before they get off the ground.
When is the Prime Minister going to see that there is only one pair of hands, and not let the government appear like some many handed Indian Shiva?
On another subject, how about seeing how Maltese businesses are faring at the moment? Can Government publish some data to this effect? What businesses need is not rhetoric but reality. We are in dire need of business surveys with the cold hard facts. How many businesses started? How many failed? Why? What could they have done better? Are government induced costs killing enterprise?
Christmas is coming, and I have my wish list as well for Father Christmas. No need to do it all at one go, over three years should be enough. Should someone wish to listen, its this:
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Create a business levy and couple this with the National Fund set up during the budget to invest directly back into the entrepreneur economy by lowering corporation tax but ring-fence it to help failing businesses so as to reduce the business failure rate among start-ups by 10 per cent every five years.
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Create a national networking service to match businesses with potential customers. Get our businesses to go abroad and seek business deals elsewhere. The Malta Enterprise scheme is good. If needs be, get Air Malta to offer very special rates for businesses for a year or two. Use the Broadcasting Authority to make it a mandatory requirement for TV and Radio stations run more programmes about entrepreneurship and to publicize initiatives.
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Create go-between "business matrons" to join up the dots in person, not just online, and get the people from Malta Enterprise into the streets to visit businesses, not stay behind desks. Work with private initiatives forums to identify groups of entrepreneurs that go and seek business together.
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Create a magazine, and website for entrepreneurs. Have SMEs compete to be featured, and honour those who perform best. Showcase real talent and create a live community.
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Make entrepreneurship and workplace mentoring a key part of the curriculum in schools and further education, with tax breaks for businesses that invest in well-run work placements, and an Entrepreneur Council that will reports to government and the country at large each year on how well the entrepreneur economy is doing.
Entrepreneurs want to be loved – but with concrete and assertive actions not words. As Eliza Doolittle sang to Freddy in My Fair Lady: "Don't talk of love, burning above, if you're in love, show me … show me now."
After all, at the end of the day, as someone so famously said….."its the economy, stupid" That is what keeps Governments up, or brings them down.
The EU Antidumping Committee has rejected the Commission proposal to extend the duties for another 15 months, by 15 votes against 10. GRTU welcomes the decision by the EU-27. After 15 years of protectionism in the footwear sector, the current antidumping duties on imports from China and Vietnam will hopefully end in January 2010. As shoes are essential items, this is a good day for all Europeans. Now we expect that today's ‘no' will be confirmed also at ministerial level.
GRTU on behalf of its members in the areas of Bugibba, Qawra, and the St Paul's Bay, has sent a letter to Prime Minister Lawrence Gonzi requesting the establishment of a Task Force to address the never ending list of problems these localities are facing. GRTU argued that the idea of yet another appointment of an area manager will continue to confuse the already inefficient bureacratic and unrestrictive structure that exists today.
GRTU has been asked to submit any outstanding issues and any other new initiatives for bilateral cooperation to include in a discussion of the 26th Maltese-Libya Joint Commission.
