Category: Archive – 2010

A burning issue effecting the self employed group of waste carriers concerns the excessive delay periods in payment for services by Local Councils, this issue has been discussed now with the new Director General responsible for local Government Mr Martin Bugelli who has been asked by Hon Chris Said the Parliamentary Secretary in charge of Local Government to find a settlement to the issue. GRTU is now satisfied that new mechanisms will go into action to ensure that all pending payments are made and those that still await verification would be speeded up.

 

A bigger issue was the question related to the need to replace many of the available waste carrier trucks with low emission vehicles also having the use of weighing equipment to enable a proper audit trail of recyclable waste from the localities to the waste compliance facilities. A framework agreement backed by the appropriate Legal Notice has now been put into action so that waste carriers will become exempt 100%, 80% or 70% on the registration tax due on waste carriage vehicles depending on the vehicle's EU emission class.

Another issue is the question related to the mechanism that needs to be put in place to ensure that the subsidy given by Government to Local Councils on the new hefty fees imposed on dumping of waste will be paid by local councils to waste carriers. No arrangements have as yet been reached.

Petrol Station owners are now running out of patience. It has been more than 10 years of unending talks with Enemalta Corporation to resolve the issue concerning the transfer of half a dozen petrol station sights to the current petrol station owners. These sights are still owned by Enemalta and there is a legally binding agreement between GRTU and Enemalta that these sights are to be transferred on an agreed price based on tenancy in use. It is incredible that the board of Enemalta is incapable of finding a practical solution.

Meeting with Water Bowser owners and with the Authorities to negotiate on their behalf are still ongoing in view of MRRA's attempt to impose unacceptable conditions on this self employed group of service providers. Water Bowsers are all members of GRTU and like all self-employed they are under tremendous pressure to make an economic profit given the increasing cost of labour, fuels, auto-parts, traffic fines, licences, taxes and electricity.

 

GRTU fails in fact to understand why Government authorities seem to be enjoying themselves on a self employed punishment spree. Vince Farrugia GRTU Director General explained that "So many groups  of self-employed are being treated as parasites of no economic value, by people who ought to know better and who are supposedly politically committed to the PN manifesto, which clearly presents itself in support of the self-employed"

Business owners were particularly irked by the words of Minister George Pullicino in his address to the farmers as these words were perceived by bowser owners as a clear attempt to annihilate them. GRTU has now set up a second meeting with Minister Pullicino following a number of technical meetings with Dr Chris Said Permanent Secretary in a final attempt to seek an amicable solution.

On the issue of who is represented at MCESD, Vince Farrugia, GRTU's Director General comments as follows:

MCESD represents the major organizations representing employees and workers, the third party is the government represented at MCESD with the top civil servants. Four employer organizations together represent employers, while four trade union group represent workers.

 

Up to 1976, GRTU was already identified at law as the organization representing the self-employed and owner managed enterprises. Technically most of those represented by GRTU are employers, but GRTU's representation has traditionally been for their interest as a particular and important sector within the Maltese economy. When in 1976 the law was changed the special registration window for GRTU as Union representing the self-employed, autonomous workers and owners of micro and small enterprises was, for purely Labour Party political strategy, removed from the Industrial Relations Act (IRA).

Since then GRTU could not register as a union since the definition of Union in the IRA was clearly reserved for organizations representing wage and salary earners, and non profit earners like the self-employed. Indeed GRTU was not even allowed to call itself General Retailers and Traders Union, GRTU kept using the name GRTU effectively in defiance of this political imposition. The only option left for GRTU, which is still today the only option, is that of registering as an employers association. The Labour Law is very clear: You register as an employer association or as a worker trade union. The Malta Employer's Association (MEA), the Malta Hotels and Restaurants Association (MHRA) and GRTU Malta Chamber of SMEs are registered as employers associations. The Chamber of Commerce (COC) (and also the now merged FOI) does not appear as a registered employer association.

GRTU however in spite of its nomenclature as employers association has never really belonged to an "Employer's Block" within MCESD. GRTU then steadfastly stood out as the national organization representing the particular sector it represents. Indeed as many occasions at MCESD, GRTU has sided with the trade unions and on many other occasions it has sided also with the employers, and GRTU has been the most vociferous in favour of "consensus at MCESD, resisting all attempts to introduce a majority voting system. The trade unions cannot ever claim that GRTU had attempted at any time to improve itself as a part of any imagined "unti-trade union block". The issue of numbers at MCESD therefore does not exist.

The point Paul Abela raised at MCESD when the request by the group of trade unions called Forum to join MCESD was raised is very clear. John Bencini was an active member of MCESD as long as he was an officer of CMTU. When he resigned and his union left CMTU, he joined the newly formed combination of trade unions called Forum. These trade unions are most of them brake-aways from CMTU. Technically, the trade union movement has produced another offspring:

"It is up to the family of trade unions to offer Forum one of their seats, if they accept jointly that the family has become bigger, UHM and CMTU have no seats to offer as they have only a single representative. GWU has a double representation and they are the major promoters of Forum. So the solution is obvious: GWU offers one of their two seats to their adopted partner but MCESD cannot every time there is a brake away from one organisation represented offer a new seat to the new separatist group. The story would then be unending. Imagine what would happen if tomorrow MHRA, GRTU and then CMTU brake up, we would have to create a new seat every time  since we took a similar decision when Bencini's union broke up from CMTU"

This was what Paul Abela stated at MCESD, Mr. John Bencini called this a personal attack. This is the same John Bencini who launched a vicious attack on Paul Abela and Vince Farrugia at St. George's square when he stood foursquare with GWU.

The recent GDP report tells us that the Maltese economy has made a miraculious revival, but did it really? "Are our members made to tell us that they don't feel any growth in their level of operations?" ask Vince Farrugia economist and Director General of GRTU.

 

A review of the latest statistics published, actually gives the answers "GDP growth has restarted from the second quarter 2009. This inspite of  the fact that household cosumption did not start lifting before the last quarter of 2009 and government consumption expenditure not before the first quarter of 2010. One reason why I was literally screaming at Government to implement the Budget 2010 schemes early in 2010 was precisely because when household cosumption is low it is up to public expenditure on local consumption to be hiked, so the total disposable moneys that keep most of our members going does not feel the pinch.  But government was too slow to react. Furthermore the construction industry was last year and still is in 2010 in the duldruns and suffering from negative growth.  This industry supports directly many self-employed, micro-enterprises who are themselves a motor that generate growth in other micro-firms.  But again  all GRTU's proposals to boost construction remained on the shelve. Now they will boost construction in later 2010.  But that's how politicians work don't they? They are always late economically speaking by three to four quarters.

Furthermore the growth factor in the Accounts are not SME's. Though some SME's in manufacturing and in tourism are biginning to push their heads up, most of the growth is coming from sectors like the financial institutions, e-gaming and real estate.  Retail and wholesale have however stopped sliding and its good to note that this sector started growing again. If the proposals we made for Budget 2010 are implemented without further delay and the boost to construction comes today we may be looking to better times. We keep our fingers crossed that what Hon. Mario Demarco is promising does materialise as tourism is a real saviour" concludes Vince Farrugia economic commentary

The Commission has adopted changes to simplify access to EU funds by cutting red tape and saving costs for EU beneficiaries, on 28 May 2010. New rules will also provide more scope for combining public and private funding for a bigger investment impact. The changes will help deliver the new generation of EU programmes post 2013.

 

Cutting red tape

Apart from waiving the obligation to pay interest on upfront payments ('pre-financing'), the changes set out by the European Commission include a proposal to raise to €50,000 the current €25,000 ceiling under which grants require simpler administrative procedures. It will also be easier for beneficiaries to use their grant to pay other project partners.

Simplification measures are also proposed for businesses that bid for Commission contracts. The Commission could, for example, rely on documents previously submitted instead of requesting them for each subsequent application.

The proposal strives to keep the balance between simplifying measures and ensuring effective control of taxpayers' money. As some 80% of the EU budget is spent at national level, the Commission proposes further steps to improve the accountability of Member States for the way they manage EU funds. Their national paying agencies for regional aid would be required to issue management declarations of assurance on EU funds (as is already the case for EU payments in agriculture), subject to independent audit.

Funding for results

The Commission's long-term goal is to shift the emphasis of the grant system from reimbursing cost claims to paying for the delivery of results. "In most cases, says Commissioner Lewandowski, beneficiaries are paid against their actual costs, which means they have to itemise all expenditure to get reimbursed. This requires time-consuming and costly paperwork for both the beneficiary and the Commission, which must then verify the bills received, while it does not focus on results. Simplified solutions (lump sums, flat rates) are available but have not been widely applied so far. The Commission proposes to abolish the ceiling that now limits the value of grants where lump sum payments can be used. Beneficiaries would be paid lump sums to undertake specific tasks and would then need to demonstrate that they have done so effectively and efficiently, rather that to merely report individual cost items".

Trusts funds and PPPs

In the area of external actions, the EU will be able to create its own multi-donor trust funds. These would allow to pool together the resources of the European Union, its Member States and citizens in order to provide coordinated, quick financial assistance in crisis and post crisis situations while improving the delivery and visibility of EU aid. Trust funds could also be used for specific thematic actions.

It will also be easier to better pool EU resources with private companies through public-private partnerships (PPPs). Currently, such partnerships have to adhere to all EU's budgetary and financial rules. In future, PPPs could apply the national legislation of the country where they are based.

The use of novel financial  instruments,  especially when there is a pooling of funds  (e. g . guarantee funds, risk capital, blended instruments mixing a Union grant with a loan or guarantee) will give Union funds a multiplying effect with the view to make them more effective. The new rules will also facilitate running joint projects and allow potential partnerships with the European Investment Bank group; cooperation with the EIB would be streamlined, in line with its enhanced status under the Lisbon Treaty. 

Background

The Financial Regulation and its implementing rules set the principles of the EU budget and govern the way the budget appropriations are spent. It was last revised in 2007.

 

GRTU as the national organisation representing Pet Shops has been approached by Dr Anthony Gruppetta on behalf of the Ministry for Resources and Rural Affairs and the Council for Animal Welfare to discuss with us a new Act they would be introducing some point after the beginning of next year.
Following an introductory meeting between Dr Gruppetta and the GRTU we called for an urgent meeting in Malta and Gozo for the Pet shops that trade in live animals (mammals/ birds/ fish/ reptiles). The absolute majority of such Pet Shops attended the meetings.

The Act is directed at the protection of animals kept in pet shops for trade. The aim of GRTU and its members in the sector is to ensure the protection of animals while avoiding measures that might be disproportionate on the operators.
This Act would establish much needed minimum standards, most of which are already present within the Pet Shops as can be confirmed by the Ministry through their inspections, however putting them into law would give the Ministry the power to proceed against animal cruelty within such establishments.
Following concerns expressed by the GRTU and its members the start date of the Act would be moved according to sound requirements by the sector. Two very important aspects of the Act would be the creation of a separate licence to trade in live animals and would be given only to establishments that reach the basic requirements. Amongst others it would eliminate the possibility to sell live animals in the road and on open markets. Another issue is the fact that personnel within the pet shop would have to be adequately qualified either through experience or through short courses such as animal handling, etc…
A bone of contention so far seems to be the 7 day acclimatisation period for new pets entering the pet shop for sale and it is arguable if this period is needed for all species. Another one is the feeding system as it is widely agreed that certain types of food need replacing within a couple hours and others can stay longer, this also depending on the type and age of the animal, for example younger animals tend to eat less but more frequently and by having their food removed would do more harm than good.
Two strong issues which the sector has on the Act are the requirement to have a death certificate made by a Vet for each animal that dies, which especially for pet shops trading in birds and fish this might constitute a large increase in cost. Another issue again mostly for traders in birds and fish is the requirement to register the import and sale of individual animals. This is also something that would push costs up.
The sector complained in general that on importation the animals might become sick because they are not treated well at the airport before release. They also complained that animals are sold on the internet and from households by individuals not holding a license. They argued these issues should also be addressed.

The meeting between the developers section and the Prime Minister at Villa Francia was chaired by GRTU Director General Vince Farrugia, who in his introduction explained that the meeting was called following great concern within the developers, engineering and building contractors on the continued slow economic activity within the sector and the impact this is having on the economy as a whole. The Director General explained that in spite of the action proposed in Budget 2010 no real relief has been put into practice and the uncertainties on MEPA Reform have increased additional problems causing developers to curtail their investment and development project.

 

"GRTU called this meeting so that leading Developers and Contractors will have an opportunity to present to the Prime Minster their views as to how the situation can be remedied. The Developers and Contractors present all spoke and presented their views." said Vince Farrugia. Amongst the issues presented where:

First Time Buyers

Removal of stamp duty up to  €116, 500 worth of property. Above that, the 3.5% will be chargeable on the balance above€116, 500;

Incentives need to be introduced due to the fact that the Banks themselves are not granting loans. The reintroduction of the interest-free loan scheme from Government is an example eg 25% of cost of acquisition;

The creation of a Private Public Partnership to address the Housing issue in order for Developers to be incentive to develop for first time buyers level of properties of acceptable standards

Abuse of any incentives or loan schemes should be heavily penalised and can be verified through prior researches;

MEPA

Site notices to all neighbours in the vicinity is unacceptable;

Frivolous 0bjections – a system must be introduced to curb such objections such as a bond deposited by the objectors upon filing of objection;

Refusals of Full Permit by the same Board who would have granted an EIP permit thus convincing the developer to buy the property/site;

Compliance Certificates – is it necessary to incur the expense for compliance certificates for every unit when a developer builds a block, instead of a compliance for the entire block?

Major projects need to be granted/refusal of a permit within 6 months from application. Definition of large projects required;

Enemalta

Electricity Meter on construction sites – unacceptable that Enemalta removes the existing meter and consequently  charges the developer for re installation;

Tax

Government Fiscal Valuation – Perit should value the property in the period between the konvenju and the final deed of sale. In the event of no konvenju, a period prior to the deed should be established for such valuation;

Value of property for fiscal purposes should always be that at the time of konvenju;

In order to incentivise the rent industry particularly the buy-to-let, fiscal incentives should be introduced such as the replacement of Income Tax and VAT with a final withholding tax on rentals of 15% instead of complicated maintenance reductions and other incentives

AIP

Such permits need to be liberalised – not restricted to certain areas – or abolished completely since such burdens and requirements are a disincentive to foreigners and discriminatory to property owners

In his concluding remarks the Prime Minister assured those present that the working committee promised in the Budget will be immediately set up so that action can be taken in harmony with Government's environmental, social and economic policies will be implemented without much delay.

GRTU Director General Vince Farrugia participated in the EuroCommece Board of Administration and General Assembly in Brussels. One major item on the agenda has been the situation in the EU internal market following the submission of MEP Loius Grech report and the Monti report. While EuroCommerce is satisfied of the Louis Grech report, it is also highly critical of the confused approach used in the that of Monti. EuroCommerce believes in the strengthening of the internal market however at the moment there exists a confusion of use among top officials in the Commission and this is hampering further progress.

 

"The effective functioning of the internal market is extremely important for small economies like Malta. We are an economy that depends 96% on export of industrial production and an economy who's future depends on active participation in the internal market by its entrepreneurs and the strengthening of the role of Malta as a gateway to the free EU internal market. That is why Malta is amongst one of the most vociferous in the EU on the strengthening of the internal market" Vince Farrugia argued during the meeting on behalf of the Maltese business community. EuroCommerce is taking an active role on the white paper that will relaunch the single market.

Another important issue raised was the question on anti-dumping again Vince Farrugia made clear that GRTU stands foursquare with those who are against impositions of anti-dumping needs and confirmed he lobbied hard with the Maltese Government so that Malta takes a tough stance against all attempts to preserve the old and fight the new Europe which must be built on positive economic views and not an protectionism.

Two other major items concerned issues under the 2020 EU economic strategy and especially issues related to the revised energy efficiency action plan and the action plan 2011-2020.

Vince Farrugia also participated in the EuroCommerce SME Committee meeting which also discussed Late Payments, Anti Dumping, the Grech and the Monti Report, Anti Dumping and Trade Policy.

"Given the austerity Budget measures being proposed by Merkel of €85 billion in spending for Germany, and similarly the UK, Spain and possibly France, without excluding other member states, one has now to estimate the impact on the spending power on that section of the population on which so many SMEs and in commercial sector depend. The stimulus packages enacted by the Commission and the European Central Bank has hardly effected the micro and small businesses and the majority of medium end businesses. This meant small businesses are not only not out of the recession but many SMEs are in the worse position due to the pressure on their financial resources to sustain employment during the previous year. A cutting of the expenditure power within the community will send many small enterprises in the commercial sector out of business. This is especially true in economies like Malta that highly depend on tourism and spending of consumer goods. As the cut in expenditure in the countries will have a negative multiplier effect on economies like that of Malta." Concluded Vince Farrugia GRTU Director General.