Following the presentation delivered to the MCESD, GRTU submitted its official position paper on the Maternity Leave Trust Fund where it clearly stated that whilst GRTU is in favour of the rationale behind the measure it is against a system where employers are made to pay twice for their employees’ maternity leave, pending reimbursement.
The new mechanism requires employers to pay an increase of 0.3% in
contributions on all their employees and at the same time also pay their employees their wage while on maternity leave. The latter will eventually be reimbursed by the Government through the contributions paid by the same employers.
GRTU is in favour of measures that increase the female participation rate in the economy and it believes this is an objective that should be supported collectively. It is however also important to acknowledge that maternity leave has a big impact on businesses, especially small businesses.
Maternity leave leads many small businesses to go through increased pressure having to make up for less human resources while still carrying the same wage cost. Some businesses go through more hardship because they need to find a replacement with the right skills and spend even more on wage costs to fill in this gap. Notwithstanding this however the process is embedded in businesses’ working practices and businesses cope with the situation the best way they can.
The new system will definitely aggravate the situation and to GRTU it is unacceptable to ask more from businesses. Businesses will be worse off both in terms of finances and administrative burden. Having to apply for a reimbursement from the Government is of significant concern to the GRTU because this translates to additional paper work and lengthy payment periods.
GRTU’s position paper is based on the input and feedback received from its members and Executive Council and we believe that several valid points were made. Unfortunately, even though GRTU submitted its feedback through the MCESD official channels, we are not in a position to know whether our position paper was given any kind of consideration.
This measure has serious repercussions on businesses, which repercussions begged to be measured in an impact assessment and discussed in a consultation exercise that went beyond simply delivering a presentation.
MCAST, together with the Ministry for Education and Employment, launched a new supplemented maintenance grant (stipend) for MCAST apprentices covering the summer period. This will take the form of an additional monthly allowance of €232.94 to each MCAST apprentice over the summer months.
This is intended to serve as an incentive to MCAST students undergoing work-based learning experience.
MCAST has taken over the apprenticeship scheme in order to bridge their students’ vocational courses to on-the-job training through quality apprenticeships with the support of employers who opt to benefit from the scheme. It has been noted however that over the previous years a number of apprentices terminate their experience prior to the finalisation of the work-based training period. An overhaul in the system has identified a number of concerns that are being addressed by MCAST to ensure higher standards. One of the reasons has been identified as the lack of financial incentive over the summer months where students participate in apprenticeships up to 40 hours per week with minimal financial compensation. The summer period often offers temporary jobs which may be more financially attractive than apprenticeships to these students even though these do not offer the learning experience and objective which is set as part of their course at MCAST. Therefore this incentive should provide support to address the concerns of employers hosting apprentices, that such students would drop out over the summer.
So far there are over 500 companies offering more than 700 apprenticeship posts which vary across different training fields such as Finance, Business Administration and Marketing, Electronics and Mechanical Engineering, Agriculture, Construction, Applied Science, Sports, Hairdressing and Beauty. The increasing apprenticeship opportunities enhance the level of education and training offered to students at MCAST by providing on-the-job training that helps create a more work-based labour market. On the other hand, employers also benefit from the services of motivated young students over their period engaged with the specific company.
GRTU has over the past weeks organised an information session to engage more employers in hosting apprentices. For more information you may contact GRTU on or 21232881.
Parliamentary Secretary for Competitiveness and Economic Growth, Hon. Dr Jose` Herrera, has this week addressed the closing seminar of an ESF-funded project addressing improvement of online public services. Hon. Herrera outlined that it is essential that new government services are designed
around the end-user rather than expect the end-user to adapt to the service. A simpler service is necessary to shift the citizens’ and business’ preference towards online access to government services.
This project aimed at offering research-based guidelines to support e-Government services to become more efficient and convenient. Research amongst Maltese citizens has shown that the majority prefers to use the traditional public services rather than the online alternative. This needs to be addressed since Malta’s e-Government infrastructure has indeed received European awards but this is not being reflected in the usage of the online services.
MITA representatives gave an overview of the research undertaken and focused on the recommendations brought forward by the study. The study showed that traditional services are overly bureaucratic and often lead to time-wasting and frustration (having to take days off from work, etc.), yet are still pre-dominant over online use.
The policy recommendations include:
Positive discrimination towards online accesses and use of the eServices by the public
Engage end-users in the development of new and updating of current eServices
Identify and implement further highly-relevant public services and/or Forms (life events, such as birth certificates, etc.)
Work towards a basic level of requesting-data-only-one principle from citizens and businesses
Target a number of outreach actions at citizens and businesses
Nominate agents/intermediaries and incentivise them to provide direct help in the delivery of the outreach and assistance related to eServices
Develop mobile-friendly eServices
GRTU commended the policy recommendations and also expressed appreciation towards MITA’s work in terms of putting the public service forward especially in terms of infrastructural setup. GRTU however recognised that this will not succeed unless an actual tangible plan to instil a culture change within the public service to support eServices comes into effect.
Management processes within the public service have to prioritise online services and not afford that those who opt to use online services to be given the least priority when compared to those who use the telephone or present themselves physically at the respective government offices. The government service online has to feel personalised and be customer-, rather than process- or department-, oriented. The E-ID experience has proven that if the system is not customer-oriented it will fail despite the high quality standards in place. GRTU had given feedback that a pilot is necessary prior to launching such initiatives and that stringent security measures are not always necessary in each and every case, so much so that make the functions of a tool inefficient and non-usable.
Public servants also need to be trained to understand the exigencies of delays and bureaucracy on the self-employed and the small business. Keeping a file on a waiting list or undergo unnecessary complicated procedures can translate into costs which businesses cannot and should not bear. There also needs to be an efficient support system where online users can find support or report bugs when accessing specific services for the first time.
GRTU President Paul Abela last week attended the Milan Expo 2014 together with Honourable Prime Minister Joseph Muscat and Minister for the Economy, Investment and Small Business Chris Cardona. Presence in this initiative puts Malta as a probable business destination with the potential exposure amidst entrepreneurial visitors all over the globe. During the expo Dr Joseph Muscat expressed that Malta wanted to convince foreigners that
the island was the ideal place for tourism but also to attract businesses. He continued by stating that Malta’s presence at the expo will continue to promote the country’s product quality.
The delegation was also present at a business reception where they were able to meet with current and potential investors. It is important that Malta continues to take the opportunity to be present at these types of event as this participation will continue to encourage foreign business investment to the island which will strengthen the Maltese economy.
GRTU President Paul Abela has this week welcomed Malta’s Envoy to Pakistan, Iran, Bangladesh, UAE and Sri Lanka, Ahmad Aziz, at GRTU offices. Abela and Aziz discussed the need to seek common ground to open up the potential of trade between Malta and these countries. The make-up of our economy being majorly focused on small businesses allows companies to perhaps sharpen their outreach to possible trade. On the other hand, whilst acknowledging that various factors, such as distance, makes such trade less popular than closer countries with larger commonalities.
Nevertheless Abela explained how it is essential to identify niche business sectors which can offer reason for such trade routes to be established as this would allow growth and investment in markets which are not overly saturated already with existing trade with Malta or even so, European countries. Abela expressed GRTU’s support in finding such trade avenues yet emphasized the importance of high-value fruitful investment. Ahmad Aziz agreed to seek potential investors in sector-specific areas across Pakistan and other Asian countries in order to discuss with Maltese counterparts on promising areas of business cooperation.
An MCESD meeting held this week focused on the need to prioritise research and innovation. University of Malta RIDT CEO Wilfred Kenely introduced the subject by giving an overview of the research initiatives undertaken by the Research, Innovation and Development Fund throughout the past four years since its setup. It was highlighted that the human capital and infrastructure is available, but to take research to the next level investment needs to be
upped. A number of research-driven initiatives have practical benefits to society at large, such as cancer research.
The MCESD meeting was also to discuss a proposal for budget initiatives related to the sector. The proposal’s main suggestions included:
Set up of a Malta Business Research and Innovation Hub
Promote knowledge transfer between industry and academia (KTPs)
Forecasting skills and human resources needed for R & D
Facilitate VISA applications for third country researchers
Promote the concept of Malta being a living lab for new business ideas
Additional funding through MCST and EU structural funds specifically for research
Programmes to incentivise commercialisation of projects
Equity financing instruments for innovation
Tax allowance of 200% of R & D expenditure to companies
Simplification, support and raising of awareness regarding issues related to Intellectual Property Rights
GRTU representative Matthew Agius welcomed the concept behind the proposed initiatives and explained how GRTU had always regarded research and innovation as essential in order to maintain our competiveness. It is often seen as a priority area which is often not regarded as the highest on the agenda, but GTRU expressed that it is high time for research and innovation to be truly focused upon and not invested in only as a peripheral concern.
Coordination and Collaboration
In essence the idea to have one focal point for research and innovation through the form of a hub makes sense as long as coordinates and incorporates the work undertaken by the existing bodies. This would avoid fragmentation between the University of Malta, MCAST, Malta Enterprise, MCST and other initiatives.
Demand-Driven Research and Access to Resources
GRTU emphasized the importance to shift towards demand-driven research which is relevant and which makes needs of enterprises. SMEs and micro-businesses do not have the necessary resources to invest on structured research and development. It is therefore necessary to give access to these businesses to research resources at the University of Malta and MCAST whereby in turn these give applied opportunities for research to students and lecturers there. This can be linked to exigencies already in place such as that of University of Malta collective agreements incentivising PhD research for all lecturers and the introduction of MQF Level 7 courses at MCAST. Linking business research needs to researchers could lead to opportunities to maximise the potential of research undertaken.
Small Business Research
GRTU also highlighted that research and innovation would be taking place at start-up or self-employed level where these may not necessarily be aware that what they are undertaking is indeed research and innovation. This hinders development as it is not structured and moreover, not captured as part of the national research and innovation. If it is not captured it is not supported. These are missed opportunities that need to be addressed. A measure to this extent needs to be included in the proposed incentives that were put forward at the MCESD meeting.
Incentivising Research
Incentives and channelling of research need to be further strengthened and widened. Incentives for investing in the RIDT Fund at the University of Malta have to be made clearer and more attractive whilst opening up other methods of incentivising research and innovation beyond the walls of our university.
Communication
Research and Development are not necessarily understood and appreciated across all sectors of society. Therefore the benefits and the need to give due priority are not always seen by the general public but also by operators in the field. Self-employed and small businesses often have limited resources. Considering that research and innovation do not always have immediate and assured returns, this may be seen as an area which is desired for but not high enough on their agenda to invest resources in. Therefore there needs to be a clear communication initiative of any measures introduced in order to accentuate what research and innovation can achieve and the promote the respective incentives across the board. This will also lead to more funds, such as through CSR initiatives, to be channelled to research.
GRTU Malta Chamber of SMEs will in the coming week launch ‘WEEE Malta’ through its fully owned subsidiary Green Mt. GRTU is the only constituted body in Malta that has taken the responsibility of making sure that producers/importers of both packaging and now Waste Electrical and Electronic Equipment (WEEE) comply to their legal obligations.
Since early 2007, GRTU had taken the initiative with the then government to take up this environmental responsibility by establishing Green MT.
In fact WEEE was Green MT’s first priority back then since Legal Notice 63 of 2007 obliged companies to cater for their environmental legal obligations as of August 2007. This was not to be despite the fact that Green MT had also obtained a permit to operate the WEEE Scheme early in 2008.GRTU has striven to encourage the removal of Eco Contribution of Electrical and Electronic Equipment and the implementation of WEEE. And once again Green MT commends Government for taking a step in the right environmental direction.
Once this legislation is published, the WEEE Directive will come into effect, and will be implemented in practice in Malta. GRTU seeks effective results on policy measures and does not merely treat such issues as matters to be spoken about and shelved. Green MT has now gained extensive experience from the packaging operations and will not be held back from ensuring that a fair and level playing field is not in place.
WEEE Malta, which will be launched in the coming week, does not intend to re-invent the wheel but intends to make life simpler for producers/importers who are now obliged to comply to this legislation. Reporting will be in the simplest format possible and the Scheme will still make sure that this is being reported in ‘bona fide’.
WEEE Malta will insist with the respective authorities, and those being currently set up (The Environment Authority), that the respective inspectorates have to be on the ball at all times. This is imperative for the implementation of this Directive and Green MT will aid the authorities to get enforcement on the right path.
It has been drawn to our attention that certain sources may be implying that the compliance to WEEE is being offered for free by a particular entity or organization. One must realise that whether in the short-term or a long-term, a service comes at a cost. Environmental compliance has its benefits yet naturally also comes at a cost to one and all and therefore one should not be deceived by statements claiming otherwise. The WEEE directive includes 60 % of products that did not fall under the Eco Contribution regime so it is understandable that prices for these products will increase. However there could also be a decrease in a number of products that were previously part of the Eco Contribution regime. It is wrong to say that the Government has only changed the Eco Contribution from one type of tax to another by implementing the WEEE Directive. The WEEE Directive is one Directive that has to be taken care of by producers or their representatives. Governments of EU Member States cannot be involved in the implementation of this Directive and Malta did well to go to that direction.
WEEE Malta augurs that there will be a smooth transition from Eco Contribution to WEEE Directive requirements and furthermore outlines the need for stakeholders to keep on meeting around the table to monitor what takes place in the market as of early of September. Where necessary, old ways of doing things need to change, and change should be welcomed as it brings about new business opportunities.
WEEE Malta welcomes every importer of electrical and electronic equipment to its launch coming week. A communication will be sent to all prospective members outlining venue and date.
WEEE Malta is an Authorised WEEE Compliance Scheme and can be contacted on 21 496965/6 during office hours or on 79002263or 99041462.
The Pensions Reform Group has put forward a proposal which aims at retaining the current retirement age while incentivizing later exits from the labour market. The Reform Group has ruled out increasing social security contributions and compulsory second-pillar pensions. Amongst the major recommendations in the proposal is that permanent pension top-ups of 2% (for 62 and 63 years) and 4% (for 64 and 65 years) would be applicable to those who remain in employment without claiming a pension prior to 65 years of age.
Throughout the past weeks GRTU has been active in the consultation process. A MCESD meeting with the Minister for the Family and Social Solidarity Hon Michael Farrugia was held last week where the Pensions Reform Group outlined the main points of the reform proposed. This week GRTU was also present for a meeting with the Opposition Deputy Leader Hon Mario de Marco whereby social partners were invited to give their feedback. GRTU has also organized an information session for its members specifically for the Pensions Reform Group to discuss the proposals with SMEs and self-employed.
GRTU has sustained that it is evident that demographic realities imply that reforms in the pension system are necessary if we are to have fair and just pensions which are also sustainable for the years to come.
Furthering incentives to motivate more workers to remain in the world of work and acknowledging women’s career breaks in terms of pension credits due to child-bearing, are amongst the positive initiatives that GRTU welcomes. GRTU however raised concerns of specific sectors which are perhaps more labour-intensive whereby this would be more difficult in reality. This therefore implies that in practice it would be very difficult to have for instance a gas distributor or construction worker remaining in the labour market at a rather old age. This may also be of concern to employers who might have workers who decide to remain within the labour market but due to health and age reasons would have their productivity and performance reduced.
GRTU has always proposed that funds collected for pension purposes should be invested in a national fund which is specifically set for pensions and not towards the general consolidated fund of government. Government would have to anyway sustain this fund but it could be used to invest safely. It would be monitored by social partners.
One of the recommendations put forward by the Pension Reform Group addresses part-time work whereby it is being stated if a part-time worker is in fact working a full 40-hour week even if with more than one employer, s/he and the respective employers need to pay the respective NI and enjoys full contributory entitlement. This will be an additional cost to employers in specific sectors and may also have administrative concerns in terms of implementation, particularly due to the monitoring over the number of hours worked per week with different employers.
At the consultation meetings held, GRTU President Paul Abela has specifically queried as to what is in it for the self-employed. It is important to clarify and inform how the pensions system works, the existing categories and what pensionable entitlement one would have when reaching retirement. There is perhaps nothing in the reform which is addressing the self-employed directly. Self-employed persons would have invested, generated work and taken risks through their businesses throughout their working life whilst contributing.
The third pillar needs to be incentivized with serious measures for those who can sustain themselves through it. There are different practical ways how this can be done. GRTU President Paul Abela exemplified through for instance the pig breeders. These have contributed to the economy for decades but the Maltese economy has changed in a way that this line of work is dying a natural death. It would make sense that at least the land which the pig breeders had invested in would be allowed to be used for rental purposes since their investment would serve as a form of private income throughout their retirement. Another practical measure would be setting incentives for self-employed persons who would have opted to invest in a property for the running of their business without having in any way received support from the government. This property can then be used for renting purposes when the self-employed person is no longer in business. That income is a form of pension for the retired self-employed who would have invested himself throughout his working days without having gone for business support or other resources from government and would have contributed the national insurance throughout his work. This should therefore have some form of tax exemption or fiscal incentive even though it should also be capped.
The document hints at moving towards equity release as a form of adequate alternative for individuals who would be asset-rich but perhaps cash-poor. If this is the case we need to see that there are adequate genuine persons through set systems that can be trusted, that guide such individuals. Most of them would be ageing and not in any way experienced with the property market. One needs to ensure that the life-savings (in the form of property) reap the maximum potential for them and is not taken advantage upon by others. This also leads GRTU to extend its appeal to banks to consider persons of a certain age who might need financing for specific projects. The reality is that these may be asset-rich and that life expectancy is increasing. If we are heading towards this direction it cannot be that such persons find all doors closed to acquire financing.
All in all GRTU sees that first pillar pensions need to be sustained in order to ensure a fair retirement for all sectors in society. At the same time incentives have to be made to encourage other modes for pensions. Diversification and incentives can lead to sustainable pensions. GRTU is collating feedback from its members and will be putting forward it formal feedback within the deadline set for the consultation.
The full report, recommendations and related documents can be found on http://bit.ly/1OjRgwH. Kindly send your feedback to GRTU on by latest 26th July 2015.
Following an information session held by FIAU and the Ministry of Finance, hosted by GRTU to its members from various sectors, GRTU opened a two-week consultation period to its members. The main scope of the proposal is to set a limit upon cash transactions which is being suggested to be at €10,000 for cases of both single transactions as well as transactions which appear to be linked. Any such transactions above this threshold would be considered illegal and penalties duly applied.
GRTU appreciates this positive initiativewhich is aimed at combating tax evasion and money laundering as well as incentivising the shift towards other safer and more contemporary methods of payment such as online transactions. GRTU has however put forward a feedback document highlighting the following concerns:
Linked Transactions—Members from specific sectors are concerned with such cases based on agreements over periods, such as in the case of vehicle hire purchase.
Communication and Dissemination—A strong information campaign to the general public is necessary as it is unfair to place this onus on the trader.
Monitoring—If this proposal is to be implemented appropriate monitoring is necessary. If not, it is clear that this would result in a situation where mass non-compliance would work against complying retailers.
Arbitrary Regulations—Interpretation of linked transactions should be based on an arbitrary set of regulations and not reliant on subjectiveness.
Retailer Protection and Payment Assurance— Compliant traders that do not accept such cash transactions and make the necessary reports need to be protected and assured payment.
Donations—Donations also need to be regulated as otherwise these can be used as a loophole to the scope of this regulation.
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