Improving conditions at a national level for businesses
i. Lifting restrictions on shop opening hours
Following a survey GRTU had conducted with members, it became clear that times had changed and that the majority of its members no longer wanted restriction on shop opening hours. GRTU, therefore, was the main entity backing government and pushing for this reform to take place.
The changes in fact came into force a good number of months following the consultation, however, to GRTU's disappointment there were still a number of restrictions in place such as having to choose one day of rest and otherwise still having to pay the €700 fee to open seven days a week. This was mostly burdensome on smaller businesses who could not afford to pay such a hefty amount and monitoring such a system would be in reality impossible, leading to unfair competition. GRTU lobbied heavily to have the remaining restrictions lifted. GRTU argued that without such a change there was only marginal improvement from the previous law, that the government misguided businesses and their representatives and that the changes made so far still fell short of meeting consumer demands. During the period of negotiations GRTU also secured an exemption for businesses from paying the €700 fee until the issue was resolved.
GRTU's proposal to lift the remaining restriction was at the end accepted following much representation.
ii. Finding a solution to Excise Tax
Over the last few years government has chosen to widen the range of goods that fall under this tax regime in order to increase its revenue. Even though most of the increases were marginal in terms of amounts, they resulted in heavy bureaucracy on enterprises and an added burden to those that complied with the law as opposed to free riders.
GRTU has and is still campaigning for the total removal of the excise tax extension that has as yet not been justified by this government. Various avenues in terms of lobbying have been explored during the last year and this included multiple meetings with the Minister and Permanent Secretary of Finance, also involving representatives of specific sectors, multiple media statements and initiating a declaration signed by enterprises against the excise tax and stating how harmful this is to their business.
GRTU has also carried out fieldwork to understand exactly how the process works and alleviate both the bureaucratic burden on enterprise and the imbalance through unfair competition. This exercise resulted in changes in the requirements of the declaration, giving enterprises importing excisable goods from Europe once again the chance to clear their goods immediately upon arrival in Malta and ample time to submit the declaration following this. This brought the different channels of importation when it comes to the customs administration of excisable goods much closer to each other.
GRTU is currently working on longer operational hours at customs, something that has already started being implemented as well as introducing electronic transactions.
iii. Local Enforcement System Reform
Money spent on fines had become an increasing concern for businesses. The inevitability of having to consider a substantial amount of costs, emanating from contraventions, as necessary and inevitable running costs, given the Maltese road's infrastructure, had reached unprecedented highs.
This issue resulted in several meetings with a vast number of sectors, especially enterprises having a direct concern in transport issues, meeting with Ministers, Transport Malta and LESA.
Two important GRTU proposals were taken up and implemented. Firstly, that local enforcement officers would no longer be privately employed but government employed to limit the direct interest in giving contraventions. GRTU argued that enforcement cannot be driven by the need to collect funds but rather towards understanding, educating and ultimately improving the situation. The goal is not to issue more fines, but to provide a better service to the community.
Another GRTU proposal implemented was the introduction of a warning ticket system for a number of contraventions. GRTU argued that not all road illegalities should be treated in the same manner and warnings should first be issued where there is no health and safety concern. GRTU also argued that local enforcement should be strongly based on education.
iv. Malta Development Bank
Originally a GRTU proposal put directly to the Prime Minister during an MCESD meeting ‒ this year we witnessed the setting up of the Malta Development Bank. This followed an exercise in which GRTU was a main participant that proved that there is a market failure in access to finance in Malta and a development bank was needed in order to address this.
The Development Bank will in fact not function as a normal bank but will be filling in the gap and help banks give finance where they are finding shortfalls. Through the MDB therefore, business loans that are deemed too risky for one reason or another by the banks would be financed through the help of the MDB.
This is another step in the right direction in GRTU's quest to increase access to finance for businesses. GRTU was also successful in having its president confirmed as one of the directors of the bank, in representation of Maltese businesses. The GRTU president will be ensuring that tangible improvements are felt on the ground.
v. Unfair competition
Once again during 2017 GRTU worked very hard to instigate government to tackle unfair competition coming by sea from Sicily. This year important progress was achieved.
GRTU's proposal to establish a task force on the matter was taken up and this task force started functioning in 2017. GRTU has, however, questioned the effectiveness of the work of this task force on numerous occasions and changes in how investigations and enforcement are carried out had to be made. The effect on the ground started to be felt.
GRTU's proposal to take the scanner down to where the catamaran berths was also taken up and implemented. This system is gradually improving the situation on the ground with the customs department having more visibility of what is coming into Malta and being able to carry out spot checks to confirm if what has been declared is correct.
vi. Human Resources Crises
Over the last years human resources proved to be among the biggest challenges facing enterprises. Lack of skilled and available human resources provided to be one of the biggest constraints that led to many enterprises not being able to expand and limitation of operation. It also led to inflation of wages because of poaching and the businesses that paid most attracted the necessary human resources even though this did not equate to increase in skills.
At the same time Malta has been experiencing the lowest unemployment rate, meaning there remained very little, if any at all, Maltese that were available and ready to work. Employees from other European countries were attracted to higher paying member states and non-EU nationals were very difficult to engage due to a very bureaucratic administrative process.
GRTU has suggested a number of improvements to make it easier to employ non-EU nationals and in fact the process has been greatly reduced in terms of time and has become a bit more simplified. Sourcing third country nationals was however still very difficult and GRTU suggested that in order to help enterprises and guarantee a certain level of safety, third country nationals should be sourced directly through the national employment agency.
This proposal was at first shot down but soon after it was accepted and implementation started in 2017.
New Sectors
During 2017 GRTU was successful in attracting and servicing two new sectors within GRTU:
i. Panel Beaters and Repairers
GRTU has carried out substantial work with this sector. From four enterprise owners within this sector turning to GRTU for help in view of developments that had occurred, GRTU today represents over a 100 of these enterprises and within it has also welcomed the Collision and Repairers Association, with which it has worked hand in hand for the last year.
GRTU has so far been successful in addressing the main urgent issue that was causing harm to many enterprises in the sector. Panel beaters and repairers were being forced into an additional certification system that they did not agree to or sign up for at their own expense. The certification equalled a cost that would run up to over a €1,000 per year, over a period of four years.
Thanks to the support provided by GRTU, through the assistance of the lawyers, the MCCAA and the CRA, the repairers managed to hold their ground and reverse what was being imposed on them. This entailed a lot of work and going through the official channels of the MCCAA and assisting it in its investigation by presenting arguments and evidence.
The MCCAA eventually issued a winning interim order on insurances to stop implementing the QVR as mandatory, stop marketing it in a way as to place those not having the certification in a bad light and inform all their clients that there will be no distinction in payment between clients that choose a QVR repairer and those that choose a non-QVR repairer.
Due to this issue the work of many repairers had been stalled and/or becoming difficult. Today work has resumed back to normal. GRTU will continue collaborating with different stakeholders to continue addressing the other issues that are till today negatively affecting the sector.
ii. Childcare Centres
Childcare Centres had approached GRTU with a number of issues affecting their sector, the main one however being the expiry of their existing contract with government. Within GRTU today there is incorporated the Childcare Centre Providers Association.
Operators in this sector complained that the rate given to them required updating as costs had increased drastically and operating certain aspects of the job was becoming unsustainable. Following discussions, government decided it would carry out a study to guide it in the negotiations on the price for the service. Meanwhile GRTU negotiated a temporary agreement that saw a marginal increase in price and also secured a backdated review in price once the new agreement is closed and the new prices are agreed.
GRTU is currently negotiating the new agreement together with the representatives of the sector. Government is committed to close the new agreement within the first week of February.
EU Funding
During last year, GRTU has once again closed a number of EU-funded projects and also paved the way for opportunities for next year. EU funds are a very important source of income for the organisation and GRTU is aiming to continue working hard to reap the full benefits from what is available.
i. Europe Direct
GRTU has successfully closed the last of the five years for which it had acquired the project. Through the €20,000 a year of Europe Direct funds GRTU was able to diversify in the stakeholder it targets, increase its reach, carry out numerous activities and network with other organisations and institutions.
Among the Europe Direct activities was the running of an information centre, the issuance of a newsletter, maintaining a website and social media platform and the organisation of activities.
ii. East Invest
GRTU has successfully closed a two-year East Invest project. GRTU's project, in partnership with EVEA and BUEE, was part of a bigger EU-wide project organised through our social partner Brussels representatives.
East Invest is an EU-funded project that began in September 2014 within the EU4Business framework. The general aim of East Invest 2 was to facilitate the development of a competitive private sector in Eastern Partnership countries and encourage economic cooperation between them and the 28 EU member states. The Eastern Partnership countries are Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.
The project consisted of a number of exchanges to share experience and learn from the partner organisation. The project gave the organisation an income of around €23,000.
iii. SMEs: Tuning the art of representation (Star)
GRTU has applied and won an ESF project. We are currently in discussions with the managing authority to agree on some of the budget lines and activities of the project.
Through this project, for which we have originally requested €259,805, we would like to strengthen the capacity of GRTU Malta Chamber of SMEs as a stakeholder through investment in its human resources with a view to make the organisation a more effective and visible social partner.
This investment includes an intensive training for some of our administrative staff and Council members in the area of public relations, including training in how to handle the media, upkeep of effective social media platforms and improved communication channels. Through this part of the project we aim to equip our staff with the tools to be better able to attract media and stakeholder attention, better manage TV and radio interviews, panels of discussion as well as be better able to prepare effective public statements which reach the intended target audience appropriately.
In another part of the proposed project, we aim to provide our staff with a comprehensive course on the essentials of financial services. This will make it possible for our organisation to start providing the necessary guidance that members request on financial services. In addition, we aim to visit an employer's organisation in the UK which already provides services in the area of financial services in order to consider the delivery of similar services by GRTU in the future.
As part of the project, we will commission a study aimed at providing a thorough understanding of the state of the MCESD as compared to the aspirations of stakeholders. We hope that this soul-searching exercise will be further discussed through a special focused meeting of the MCESD.
Finally, through the project we propose to take the GRTU and social dialogue in Malta forward. This will be done through a study on the organisation itself and how it is perceived, meeting employers' organisations in other EU member states, drawing up a medium-term PR strategy and embarking on an awareness campaign to showcase the GRTU and promote social debate.