Addressing government finances, public bottlenecks a priority - Chamber

Chamber of Commerce president Helga Ellul today presented proposals for Budget 2011, insisting on fiscal consolidation as a priority, however cautioning against “over-ambitious cost-cutting measures that could lead to shocks.”

Ellul warned that although Malta had not fared too badly in the financial crisis that has plagued the rest of Europe, “the situation is still volatile.”

She emphasised that evasion was also a serious issue that needed to be addressed, pointing out that so far, few concrete measures have been taken in this regard.

Citing the operational costs faced by the private sector, Ellul sad the Chamber is “unhappy with the utility costs”. She called attention to Malta’s situation, with just one utilities provider, affirming that this provides “no assurances of authenticity of operation due to a monopolistic structure.”

Referring to the Cost of Living Allowance (COLA), Ellul expressed disappointment that this year, as last year, there would be no review of the mechanism – despite government having promised otherwise last year.

She said the Chamber does not oppose the COLA, pointing out however that COLA should rather be “fine-tuned”: calculated according to sectorial GDP figures to ensure it is linked to sectorial productivity.

“Not all sectors perform equally,” she pointed out, maintaining that “those sectors which are not doing as well as others should be assisted.”

Ellul also called for better regulation and the elimination of “bureaucratic obstacles” that frustrate private sector competitiveness.

Among these “bottlenecks”, she listed civil service half-days, the “dismal” mismanagement situation regarding ARMS Ltd, “cumbersome and demanding” EU grants and funding application mechanisms, court delays that “seem to favour those who misbehave”, and MEPA application delays.

“EU funding applications need to be made familiar and accessible for small companies who might not possess the expertise or the resources to undergo an overly bureaucratic system,” she said.

“Today’s business demands quick, dynamic flexibility,” Ellul said, pointing out how these administrative shortcomings lead to loss of employment income, value added, and ultimately, government income and national economic prosperity.

On energy and environment, Ellul put forward recommendations that Malta’s water resources be better “rationalised” and second-class water sources be harvested and used.

She also recommended that government encourages and reward companies that adopt environment-friendly measures such as making use of electric of hybrid vehicles – something that, she maintained, “is not encouraged in any way so far.”

This year’s budget will be submitted for EU-level review six months before they are adopted – a review process that will include comments by the European Commission and recommendations adopted by other governments.

The budget will be presented on October 25.