The frequent changing of ministers and CEOs creates instability for business, CEO of the Malta Chamber of Commerce, Enterprise and Industry, Marthese Portelli, told The Malta Independent.

This is the second part of the interview with two officials from the Malta Chamber of Commerce, CEO Marthese Portelli and Council member Sylvan Mifsud. The first part was published in The Malta Independent on Sunday, and focussed on the Stabbiltà initiative, and the impact of corruption scandals on business.

Asked whether businesses are concerned about the stability of the government given the Labour Party's internal issues, Portelli said that "any type of instability effects business, be it local or international. One issue that definitely effects businesses is the frequent changing of ministers and frequent changing of CEOs and people in top positions. That means having to start from scratch every time someone changes, and we have had a number of changes occurring within crucial portfolios. Look at the number of times the tourism minister, the transport minister, the health minister, changed over the past years. Look at the number of times we saw changes in the top management of critical entities such as Jobsplus and Transport Malta, amongst others.  It creates instability, and instability does not allow one to plan properly, which is the reason why The Malta Chamber advocates against thinking in five-year electoral cycles and in ensuring continuity unless there is a drastic need for a policy direction change."

The officials were asked about a number of the proposals made by the Malta Chamber of Commerce in its pre-budget document.

One of The Malta Chamber's proposals, which it has pushed forward in multiple of its policy and prebudget documents, is for the introduction of e-mobility wallets linked to on-street parking tariffs. Asked whether the government gave The Malta Chamber a reason for not trying out such a proposal, Portelli said that initially they were told that charging for on-street parking was not the government's radar.

"However, in 2023, ERA, through its proposed Air Quality Plan measures also put forward an e-wallet proposal. ERA's proposal required citizens to willingly surrender their vehicle license for a specific timeframe (partial surrender), in exchange for mobility wallets (such as taxi services, whereby electric taxis should be given priority), grants to purchase electric bicycles, or vouchers (to be redeemed at supermarkets and other services)," Portelli said.

"We believe that our proposal is more practical and more user-centric. Our proposal does not require the surrender of one's vehicle licence - it allows one to manage what mode of transport one would prefer to use, depending on the circumstances. Our proposal is based on giving the user the opportunity to use alternative modes of transport, including one's own personal vehicle. The country's current road infrastructure does permit everyone to depend solely on public or shared transport. Our proposal supports mixed use of different modes of transport as well".

Describing the proposal, she said that if a person opts to use their private vehicle for part of a trip and then switch on to sustainable transport, the amount credited in the e-wallet from parking fees that the person would have paid would be used to cover the fee of the latter mode of transport. The same reasoning would apply if one would use their vehicle on some days, but then use other forms of transport through the e-wallet another day. Those who opt not to use sustainable transport means, will not be able to redeem the e-wallet credit," she explained

This measure on its own would not be enough to solve traffic, Portelli said, stressing that it would need to be part of a set of proposals. "The introduction of single, sporadic incentives will not leave any significant and positive tangible impact. To tackle the traffic congestion issue, we need to see a whole set of proposals launched at one go."

As for the idea of a major project, such as an underground rail system that was proposed by the government but later shelved, she said that if it were to happen it would take many years to introduce. "The Malta Chamber is of the opinion that there are better options and alternatives which could work better than a new mass transit system. We cannot wait another 20 years to solve the traffic issues, there are other solutions which can be implemented within much shorter periods."

She questioned why, for instance, new developments are still allowed to pay a fee for not having enough parking spaces instead of including enough parking spaces in their development. In addition, she highlighted the need for stricter enforcement when it comes to contraventions such as double parking, or parking in bus stops, parking in corners, which, she said, add to traffic issues.

"There is also an issue regarding road closures and obstructions because of construction works as well as the sporadic and uncoordinated way in which permits are issued by local councils. Why can't we have an intelligent centralised system which manages all applications for road closures, deviations and obstructions? We are living in the era of AI. We need to make better use of technology," she said.

Another of the Chamber's proposals is for the government to introduce a moratorium on applications for tourism accommodation. Asked whether Malta is already facing overtourism, Portelli said that the numbers speak for themselves. "Way back in 2021 we had proposed the setting of a moratorium on applications for tourist accommodation. We said that it should apply with immediate effect to any future applications, and that applications that have been approved but are still at a planning stage as at the date of enactment of the moratorium should be reviewed by the Malta Tourism Authority in terms of alignment with the sector's new strategy and vision, with investors incentivised and supported to revise plans as required to conform more effectively with the same, allocating due weight to the overarching strategic principles of quality and sustainability. Back then we had already pointed out oversaturation." 

She said that "everyone is complaining about overpopulation. Whether it is coming from tourism or foreign workers, we are an overpopulated country and we are reaching our breaking point. Whether we like it or not, we need to rethink our business models, including the tourism model, but not only."

"This is why we constantly advocate that the government needs to help the manufacturing industry shift more towards high value added. When it comes to tourism, we need to ensure we are attracting the correct niches, where we will still attract a good number of tourists, but they would be tourists who respect our culture and environment, tourists who choose Malta over other countries because of our uniqueness. We need to be looking at the real per capita and per night spend. Something we overlook is what it is costing us as a country in terms of traffic congestion, energy,  and waste collection etc. to service the incoming tourists. We need to be looking at the net impact. We must ensure we are attracting the right niches. We also need to focus more on shoulder months, such as by attracting more high-level conferences. We need to focus more on attracting quality tourism which blends in well with the locals' life and which is in synch with preserving uniqueness," she said.

Mifsud said that if things keep going on at the current rate, this year we will probably hit some 3.7 million tourists. "If you look at the real average spend per tourist, that is adjusted for inflation, one would see that it is dropping."

Turning to The Malta Chamber's proposal for the government to gradually reduce energy subsidies giving a 6-month advance notice for each reduction, Portelli was asked for her reaction to the sentiment expressed by people who argue that subsidies helped them a lot. She said: "We are saying they need to be tapered off, so that everyone can adjust. There is another reality to subsidies. When something is subsidised, you don't contain your consumption, and continue using and wasting as you aren't paying for it. While we advocate for the tapering of subsidies, we are also insisting that the amount being saved as a result needs to be reinvested into renewable energy. Like this we would be aiding the shift from traditional energy sources, to renewable energy or green solutions that help people and businesses become more energy efficient."