EDITORIAL | Wednesday, 06 February 2008

Good for business

Now that the Prime minister has set the election date, this newspaper looks forward to analysing the business priorities being set out by the political parties in their electoral manifestos.
It appears that there is consensus that in the national interest the private sector becomes the prime motor of our economy and that government takes on a more regulatory role rather than the administrator of numerous public entities.
The rolling back of the frontiers of the state has been a consistent and successful strategy of this government, which when first elected to power in 1987 inherited numerous government entities which were a drain on public finances.
A plan to reduce government involvement was put in motion and the amount of government entities reduced, some sold others privatised and others simply closed. The result has been that government’s work force has been reduced to the lowest ever figure of 33 per cent and the workers retained by new owners have been made more productive and benefit from higher wages.
Most importantly, today, government earns more via taxation from these entities than when it used to administer them itself. This is no mean feat. This newspaper would strongly urge the new government to carry on building on these achievements.
The setting up of private public partnerships has also proved highly successful and goes far beyond the embellishments of public roundabouts. These initiatives too need to be further expanded for a large array of reasons not only as it further reduces the public sector but it gets previously employed government workers to start operating under a new work ethic and sense of accountability where work practises are directed towards maximising productivity in full respect for European standards of protection for employees. These initiatives must also carry on in earnest.
The process of liberalisations must also carry on with the specific intention of the consumer getting a better deal all round. Many services in Malta are still protected with a restricted number of persons only being allowed to provide that service and the resultant high charge being passed over to the consumer. Liberalisation will mean more choice and reduced prices. This can only benefit the consumer. At the end of the day the best for business and for the consumer is a competitive business environment.
The parties should give clear indications that they intend also beefing up the regulatory role that the statutory authorities have. These authorities are primarily set up as custodians and watchdogs of the consumer to ensure that the consumer gets a fair deal and value for money. The average consumer is defenceless against abusive business and consequently he has to feel a sense of protection by these authorities set up specifically to ensure that fair business is generated in the country.
The manifestos should also include proposals on fiscal reforms especially as regards taxation of companies. Company profits, especially those of small family businesses, are currently taxed at 35 per cent, which is far too penalising for small firms usually run as a one or two band show. More too often these family concerns find that one third of their profits go directly into government coffers meaning that government becomes their sleeping partner without having invested or risked in the family business.
Proposals should also be made to cut red tape not simply verbally but in actual fact. Bureaucracy is costing business and the country a lot of money delays and frustration. A new culture needs to take front stage as in foreign countries whereby applications for permits and licenses made by businesses are fast tracked owing to the new employment these applications can create. The top concern of all governments is the creation of jobs especially in the private sector and as a result a fast track regime is set up whereby businesses are allowed to get moving at a faster pace. All applications should be given a time limit by which to be refused or granted a license. This will ensure that businessmen can plan the commencement of their operations. This applies particularly to building permits as it does to applications for all the necessary licenses for one to be able to start operating a business. Particular delays take place in the granting of police licenses for events which are often issued on the eve of an event even if applications will have been submitted months before.
A proper business climate asks for certainty and a rule of law applicable equally to all without fear or favour so that a level playing field is operated whereby success is quantified by ones ability to offer a better service at a more competitive price.
This is the essence of good business which also gives prime attention to the consumer since without buyers no business can survive.
We look forward to analysing the respective electoral programmes.