For the renewal of politics - GRTU has today held a press conference at the GRTU premises where GRTU Director General Vincent Farrugia and President Paul Abela together with other senior officials presented GRTU Political Manifesto for 2013 which is entitled ‘For the renewal of politics'.

In his introduction Mr Farrugia explained that as the campaign is launched GRTU builds its political manifesto by gathering the most important proposals, which GRTU presents in a document, and solicits the political parties to commit to by including them in turn in their own manifesto.

GRTU pre-empts that there will be some issues of contention and not all will be easy to commit to but these will be the issues GRTU will push strongest on, amongst which the Rent issue, the right of representation, changing criminal charges to civil charges under the VAT Act and committing not to increase Income Tax and VAT. GRTU gave some figures in order provide a snapshot of the current situation of SMEs and gave a description of the most important points , these are detailed below:


1.       Fiscal Economy

Social assistance

GRTU insists on maintaining the current policy, emphasising on the generation of new employment and economic growth. We should also continue with the effective policy that provides support to the groups living on the minimum wage or verging on it. Support through the social system only according to need to low income families especially families with children, avoiding however schemes that encourage able individuals not to work and live out of social services.

An important element of this support must be the provision of induction to increase their level of skills for individual with low level of competences, also through adequate employment opportunities. Support for skills should be given irrespective if the person is born in Malta or is an immigrant.

GRTU is against any increase on the minimum wage which is outside the existing system of COLA or another formula that would be agreed at MCESD. GRTU continues to insist on a policy that assists the lower skilled and unskilled workers to achieve the necessary qualifications and skills that enable them to earn income above the minimum wage. It should not be the responsibility of employers that in an economy like Malta where 95% of businesses are micro to sustain any form of living wage, employers are obliged to pay workers their sue wage according to their productivity, social assistance to supplement a living wage should not be the responsibility of individual employers

Income tax

GRTU has been years insisting that the highest level of tax at 35% is excessively high and that this is not a competitive rate. In the near future 50% of employees and small enterprises will fall within this highest bracket and therefore the commitment proposed in Budget 2013, that the rate starts to be reduced on a period of years until it reached 25% need to be confirmed immediately following election. GRTU requests a clear commitment that for the next legislature Income Tax will not increase again and if there are circumstances where Income Tax will increase this will only be possible with the majority of 2/3 of parliament.


The Budget deficit needs to fall within control without the need that the current present VAT rate at 18% increase as is happening in other EU Member States.  GRTU requests a clear commitment that for the next legislature VAT will not increase and if there are circumstances where the VAT will increase this will only be possible with the majority of 2/3 of parliament.


2.       New Investments

Funding and new opportunities

Adequate research needs to be carried out together with a plan in order for Malta to benefit from funds within European project bonds, such as the Connecting Europe Facility. Analysing such an opportunity for instance should result in possible opportunities for increasing our port facilities. In addition, the regulations on micro firms are too tight when accessing funds and schemes and GRTU strongly recommends a strong change in the mentality at the provision of State funds to sustain hands-on free expert advice.

Guiding private investment through schemes

GRTU has been presenting this proposal for time and time again and Government has still not implemented this sufficiently. Malta Enterprise has provided tax credits under the Create scheme for creative projects within areas considered as creative zones. This should be further developed in areas such as business incubation facilities, port activity, marinas, ICT centres, etc...

New sensible investments are always beneficial to the economy however small enterprises should be able to benefit more from these opportunities. GRTU requests the earmarking of 25% of new Government business to go to small businesses. Small businesses should be given direct help when accessing projects through public procurement that makes up for their lack of resources. This should go hand in hand with the enforcement of small business friendly procurement policies across the public sector and with an 'ombudsman' role which incorporates the task of challenging contracting authorities on behalf of small firms after a valid complaint is submitted and upheld.


3.       Rights of Self-Employed

Self-Employed still suffer from an acute discrimination when it comes to their rights in comparison to that of workers with fixed salaries. The employment relations law does not give the same safeguards when these self-employed come in a position that to defend their interest must take collective action under the directive of the organisation representing them. In addition to this the Authorities are interpreting Competition Law in a way that every action taken by self-employed having a commercial licence constitutes a breach in Competition law. GRTU requests the commitment that this discrimination in the right to take collective action of those economic operators that instead of working for a salary choose to work on their own is legally determined and clarified.


One important reason why GRTU strongly recommended micro & small enterprises to support Malta's accession to the European Union was precisely because the EU provided the best and most extensive market expansion possibilities for most Maltese based firms. The Single Market is a top priority issue for GRTU and GRTU is satisfied that it is extremely active at EU level in the promotion of the removal of tax and bureaucratic obstacles that continue to hamper the efficacy and effectiveness of the European Single Market.

GRTU also calls for the introduction of new schemes as more and more firms are seeking new opportunities. This particularly applies to firms who have reached the third generation and who are finding the local market too small for their entrepreneurial capabilities while reaching out to the larger European Single Market is too costly unless supported through public finance.

An important element that still hinders the full potential of the Single Market are the barriers caused by the fragmentation of laws, especially those related to consumer laws. Government must commit to the better functioning of the Internal market and push for a minimum standard of consumer protection across the whole of the EU in order to make it easy for small enterprise to operate cross border.


One important element GRTU regularly deals with in relation to the functioning of the single market is duties imposed by the European Union. We fully understand that Malta has limited abilities when it comes to implementing such decisions and having a say however yes we do have a say and we appreciate that our country is seen to act in the interest of Malta. GRTU is against any type of protectionism. We do not have much of a manufacturing industry therefore voting in favour of duties that will lead to more restriction in the availability of goods both in choice and higher prices to the detriment of Maltese consumers and traders simply does not make sense. GRTU requests the commitment that when the local interest is evident Malta votes in line with our interest and does not succumb to political pressure.

Unfair Competition

Further efforts are required to tackle unfair competition, especially goods coming through the catamaran and evading particular taxation. This is another issue that has dragged for too long now. GRTU has tried on several occasions to get the Authorities to take action but all we got was Authorities that either seemed unable when it fell under their portfolio and Authorities that washed their hands if they were in a position to take action. GRTU requests a commitment for concrete action which will bring to an end this abusive and evasive situation which is also a dangerous one as the multitude of goods that enter is uncontrollable.


5.       Skills

Talent and skills remain essential for companies who are trying to survive in testing economic times and want to emerge from the difficult times in good shape. This makes the ability of our education and training system to develop skills and nurture talent a key policy concern for business. Tough economic times also make it more important than ever that effective education-business partnerships are in place to help employers improve the skills of their workforces. GRTU can be instrumental to help foster deeper relationships between on the one hand businesses and on the other hand universities, institutes, colleges and schools.

Skills and innovation is GRTU's special target area, Maltese SMEs cannot compete until Malta has a more capable and skilled labour force with minimum restrictions in Malta' labour market to unable Maltese SMEs to grasp the opportunities ahead of them. The investment that the Maltese Authorities have done in skills programmes in all levels of education has resulted in a relatively large number of SMEs active in high-tech manufacturing and knowledge intensive services.


GRTU has witnessed very valuable training and employment schemes which however were time barred. GRTU requests a commitment to make basic employment and training schemes that provide partial employers with refunds for their investments made permanent. SMEs cannot time their employment and investment needs with schemes that have deadlines and they get very frustrated if they needed to make an urgent or sudden investment, including employment and the scheme has just closed or will open in the coming months.

Accreditation and validation of skills

Many of the self-employed and small enterprise owners we represent that work manually have gained very important skills through the years of experience working hands on in their sector. These are skills that are very valid but they do not have one single paper or one single indication of the level of competence to show for it. This is something GRTU feels is very offensive as like this we are throwing away so many valid skills. For this reason we request a commitment to work closely with the GRTU to initiate a wave of accreditation for skilled self-employed and manual workers.

Transfer of skills is also important. Many trades are dying away because the skilled individuals in those trades are disappearing. The next legislation needs to address the specific skills and training challenges facing business in the context of the economic situation.

Sector Skills Council for Commerce

Sector Skills Councils (SSCs) are independent, employer-led, nation-wide organizations that are committed to working in partnership to create the conditions for increased employer investment in skills which will drive enterprise and create jobs and sustainable economic growth. We share the belief that the sectoral approach is the most effective way to do this. Through their sectoral reach, SSCs are ideally placed to articulate the voice of employers on skills; to develop innovative skills solutions and to galvanise employer ambition and investment in skills and job creation. In doing so, they are key strategic partners in creating the conditions for increased investment in skills.

The EU Commission has late last year approved the setting up of an EU level Sector Skills Council for Commerce and the absolute majority of Member States are able to participate in this EU level project because they have a National SSC for Commerce. GRTU requests a commitment for the establishment of a Sectoral Skills Council for Commerce, Green Jobs and Services (maintenance and garage industries), Crafts Industries.


6.       Rent Reform

GRTU considers that the Rent Reform, which was passed with the support of all political parties, represents the gravest example of initiative against a significant number of Maltese enterprises since the war. The majority of European countries make it easy for small enterprises to rent premises for commercial or economic operations and the tenant is given enough breath to be able to redeem before the lessee can dismiss him or increase his rent, including the provision of incentives by the state where the commercial property owner is a private individual. In such a way micro and small business in village cores and historic centres are safeguarded rather than risking being wiped out as is happening in Malta. The Maltese politicians in a unique case of consensus decided to take away this right which had for so long been practiced in agreement between both the tenant and the lessee.

GRTU strongly recommends the reintroduction of lease protection for all enterprise owners who lease property from property owners at least for a period of 12 years in which time, independent private entrepreneurs will have opportunity to redeem their investments before lease owners can evict or force renewal of lease. This is a protection that exists in many other EU Member States and the Maltese parliament gravely distorted the situation when all protection of small enterprise owners on lease of commercial properties was removed. GRTU strongly recommends the main political parties to commit to this obligating.

GRTU's efforts to change this law in a system that is just and the tenant is safeguarded from expulsion have failed. Several times were we told that our cause is right but no one has risen to protect the enterprises that had their legally binding contacts cancelled. GRTU appeals to the political parties to make it clear in their electoral manifestos that small enterprises that operate from rented premises to earn their living must be protected irrespective of anything else.

In a modern society it is unacceptable for the state to interfere unilaterally in agreements existing between third parties. The state has the duty to ascertain that efficient and summary processes are in place to determine rent issues without the necessity of direct state intervention.

GRTU appeals that those tenants that had valid agreements recognised by law and by the lessee, who for so many years had accepted the conditions he himself had set, must be respected. GRTU remains strongly in opposition to the amendment of the Civil Code whereby the lease of certain commercial premises is arbitrarily terminated in 2028 and 2018 for subleases.

GRTU solicits that the recent initiative in favour of commercial premises rented from Government situated in Valletta include all economic premises within all areas the locality without exception and that similar incentives are introduced forthwith to all other localities in Malta and Gozo.

GRTU also proposes that long term incentives are introduced, similarly to those policies applicable to state owned industrial properties, whereby such properties are granted on emphyteusis (cens) in lieu of rent.


7.       Access to Finance

GRTU identifies the access to finance as a continuing hurdle. For micro business throughout 2011 & 2012 improvements have been achieved in this sector especially for loans less than €1,000,000. GRTU understands that fewer loan applications have been rejected or made subject to unacceptable conditions at least where Malta Enterprise guarantees came into operation. The situation for loans to micro firms remains however difficult in general and the cost of loans are too high for this sector. The published average rates show a mix of home loans (subsidized interests) and guaranteed loans by ME (subsidized) and standard commercial (higher) so in practice accessibility is limited and costly and that is why a continuation and extension of guarantee schemes is essential. Given the low rate of defaults on bank loans in Malta, the risk is also highly manageable.  The reduction in interest rates on loans to business reported by the Banks is therefore qualified.

Maltese banks remain excessively exposed to the construction and development industry and as a result less excess to funds is available for other businesses and GRTU hence sustains that first and foremost new schemes should be created for properties that are not in use to be converted into a premises from which an economic or commercial activity is generated in order to create new opportunities and reduce the dependency of banks on the property sector. It is very important that the maximum amounts of funds be used for economic activities and existing schemes giving access to finance and liquidity be extended long term for the enterprises to be able to plan long term.


8.       Energy cost to enterprise

GRTU does not agree that now that the interconnector project is being implemented and the consumer can in the near future have a choice in service between the power station and the interconnector, these are not kept separate. GRTU feels that these should be owned and licensed separately and there is no mixture in the supply so that the consumer knows clearly the price of the service and the credit terms. The system of distribution should also not be part of the monopoly but can be privatized. The lack of competition is a big problem in Malta, there should be different supplies and wholesale now that there will be the opportunity. With more transparency through increased competition it will become possible for the users to see the hidden burdens that today they have to carry.

GRTU requests that a system is created whereby small enterprises are given different rates of payment for different periods even on a long term basis. With today's system long term planning is not possible and nobody knows where he stands when it comes to prices of utilities and even fuels. Long term planning is important especially for industries with high energy content.

The emphasis should mover away from subsidies to use of alternative energy and the possibility of contracts at length that encourage the enterprise to invest. In any reform Government makes in this sector it is important that the priority is the guarantee of the service and that the suppliers accept to compensate when the service fails and this creates commercial damages to other operators.

GRTU also requests the following commitments:

  • When transferring shares a company should not be charged the hefty charge of user change by Arms when proof shows the company is still the same.
  • Introduce higher incentives and reliefs to the private sector deemed as highly dependent and an intensive consumer due to the nature of their work. A night rate should be introduced especially for sectors that consume energy even during the night.
  • Grant scheme for research and commercialisation of renewable energy processes that, although their technology might be common in other countries, could prove challenging due to limitations of the Maltese Environment.
  • Enemalta should introduce a favourable fixed feed in tariff for large scale renewable energy projects to increase stability and attract investment.
  • Enemalta should introduce a number of incentives for predictability: fixed price for one and two calendar years, a percentage reduction if bill if prepaid, etc...
  • Re-launch of additional schemes for reducing energy use in commercial buildings and that eligibility restrictions are further lowered to include micro firms.
  • Reduction of the three phases and single phase meter rents by 50%. It is not currently acceptable to have such high rates simply for having a meter installed in one's premises.


9.       Environment

GRTU is the national business representative organization that is directly involved in its own managed national scheme providing Green jobs and services.

The current environmental legislation is of paramount importance and although considerable achievements have been made during 2011, the need to make sure that a fair and level playing field is maintained and is transparent is essential to ensure that the culture of abiding to such legislation remains an onus on all enterprises.

The implementation of the WEEE Directive is years overdue in Malta due to the current Eco Contribution being paid by producers to Government in relation to EEE (Electrical and Electronic Equipment) placed on the market. Its implementation would mean a reduction of €8million in Government revenue but it would also mean placing an onus on producers to work with authorised Schemes, making sure that Legal Notice 63 of 2007 is actually implemented. Implementation would mean one less infringement notice for Malta.

GRTU also requests the following commitments:

  • Set up of the ‘Producer Responsibility Enforcement Committee' announced in Budget speech 2012.
  • Immediate implementation of the WEEE Directive.
  • The exemption that was made available for reduced rates of payment for first registration of RCVs and Skip Loaders, and other waste management vehicles that are installed with built in weighing facilities should be reinstated on a permanent basis.
  • The devolution of Wasteserve MRF Operations to Private Industry for those waste streams that are catered for by Private Industry. This includes the operation and running of the MRF Facility at present. This will be the first step towards the privatisation of Wasteserve Malta Limited.
  • An investment is carried out so that Malta is cleaned from the vast amount of poles and distribution systems that are making our country look like a 3rd world country and not an advanced country member of the EU.

10.     Pensions

It is vital to increase employment levels and labour productivity, as well as undertake structural reforms in the area of pensions, public finance and labour markets, there are uncertainties regarding the choice of policies and success to address these issues.  For instance, it should be avoided to raise labour costs to sustain pension systems, which would most likely affect employment negatively and hinder sustainable growth. It is essential to ensure the right framework conditions and incentives for employers to continue to provide supplementary pension schemes. 

The real question remains how to share the burden of a growing old-age dependency ratio and an increase in pensions.  Inter-generational solidarity is a fundamental principle and the effects of the crisis on public finances cannot be ignored when looking for the best adapted ways of sharing the burden.

A discrimination that has to be removed immediately is the discrimination in the calculation of pensions between workers with a fixed wage and self-employed and enterprise owner. The system should not be discriminatory and revised according to an established rate equivalent as it is for those employed.

GRTU also continues to maintain that the national pension system should be well supported by the Government even through property transfers for the pension fund. The list of properties of the joint office and other forms of support are required so that the pension fund does not remain dependent solely on the contributions that able workers give not to have their motivation to not work and produce more declines.

GRTU also requests the following commitments:

  • To support active ageing, Government should not tax working pensioners on their pension.
  • A pensioner stops benefitting from NI benefits but still pays on the same levels for NI when compared to younger workers that can benefit from NI benefits such a payment of sick leave. This anomaly should be addressed.


11.     Self-Employed Famers and Fisherman

It is very difficult for farmers and fishermen to have sufficient income to sustain themselves all year round. GRTU therefore finds it acceptable for them to have some type of other income to sustain themselves. Today however a farmer and fisherman who has another economic activity looses the opportunity of having a low income tax rate because he looses the status of full time farmer. This system is unfair and a farmer or fisherman who's main income is derived from his vocation as farmer and fisherman should not loose the fiscal advantage even if he increases income through another economic activity as self-employed.


12.     Entrepreneurship

GRTU clearly identifies the urgent need to push ahead with incentives to sustain entrepreneurial activity. The guarantee schemes now in action already encourage individuals who are not from traditional business families to seek entrepreneurship even though they do not have parent's guarantees to help them start business.

GRTU also requests the following commitments:

  • Include a business perspective on all stages of system from early childhood education and improve links between the education system and enterprise.
  • Specialized schemes that sustain unemployed individuals, school leavers and employees seeking alternative career in entrepreneurship to receive income for a period of six months renewable to a second period of six months while the individual is undergoing a process of skills training in all areas related to entrepreneurship.
  • GRTU proposes increased endeavors by the education establishments to provide additional school training in entrepreneurship and special sandwich and evening courses for individuals in employment who are seeking an entrepreneurial career. Individuals who make the mark in these individual programmes will be guided through special schemes provided by Malta Enterprise that enable them to rent premises from where to operate as well as guarantees an access to finance to help in business start ups.


13.     Responsive Administration

Regulation is the implementation and enforcement of rules for the conduct of economic and business activities. It includes national and European legislation and decisions made by statutory bodies including sector specific regulators. Given that Europe drives so much of our regulation, it is important that we do not over-regulate or, indeed, ‘gilt-edge' what European measures we are obliged to adopt. GRTU is an advocate for reform and the reduction of red tape.

Malta's cost base remains high and this impinges on business sustainability. Businesses are finding it difficult to cope with the running costs which get incessantly higher. There are a number of issues that must be address in order to get Malta's cost base right to ensure sustained economic growth.

Maltese authorities are not only the cause of multiple burdens but they charge enterprises whenever they get the chance. The European Commission has clarified that Authorities should have sufficient funds that they can provide services and courses at no charges. Some authorities however refuse to collaborate, within their remit, with the GRTU free of change because they prefer to carry out the same work at a charge. GRTU requests a commitment that Public Authorities will not run on

GRTU also requests the following commitments:

  • Implement the SME tests so that it does not remain a dead letter.
  • All Government Departments and Agencies meet all their obligations under the Small Business (Malta) Act including the publication User's guidelines to explain the requirements being imposed by a new instrument in sufficient time before such an instrument enters into force.
  • Give access to social partners of the Legal Notice check list to make the consultation process transparent and accountable
  • Introduce an obligation that any new law/ change to existing law needs to go to the a specialised department for scrutiny of adequate consultation, impact assessment and the reduction of administrative burdens
  • New regulations accompanied by an impact assessment should clearly outline the economic impact on SMEs and the mitigation plan to eliminate this impact
  • Micro businesses to be automatically exempt from any new regulation and it will be up to the authority/ ministry introducing/ changing the law to lobby into having micro enterprises included the law. This especially since impact assessments are not being implemented.
  • Removing once and for all the need of audits for the smallest companies

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