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News | Wednesday, 04 February 2009

Employers ask for stimulus plan

David Darmanin
As international fears of deep recession hit the Maltese coast, all employer organisations in Malta have called on government to lay out a stimulus plan for local industry.
This week, the Malta Chamber of Commerce, Enterprise and Industry (MCCEI) – with the endorsement of the Malta Hotels and Restaurants Association (MHRA) and the Federation of Estate Agents (FEA); put forward to the Prime Minister and the MCESD chairman a number of measures aimed at providing a stimulus package for the Maltese economy.
The Malta Employers’ Association (MEA) too has proposed a set of measures for government to reduce the negative impact of a recession that is affecting numerous companies in various sectors of the local economy, particularly in manufacturing and tourism.
On his part, the General Retailers and Traders’ Union (GRTU) Director-General Vince Farrugia told Business Today that the union called on government to carry out an audit in order to identify the problems afflicting the Maltese economy, and act by aiding the local industry thereon.
In the technical paper drafted by the MCCEI, “a reduction in the operational costs of business in Malta” is proposed, calling for “an immediate reduction in utility bills through the introduction of a formula which takes into account the current development in energy costs in the global markets.”
Secondly, the Chamber called for the safeguarding of “major productive establishments from losing valuable human resources as a result of a significant and temporary drop in demand.”
The paper also outlined the need of marketing support to be able to keep the local tourism industry afloat.
Also highlighted as one of its major requirements was “an enhanced access by business to low cost liquidity to enable them to meet short-run constraints”.
Furthermore, the MCCEI called on government to expend MEPA procedures so as to “unleash the economic potential of a number of major projects that are already in the pipeline”.
“We need action now, we cannot wait and think we will not be affected,” said MCCEI President Helga Ellul. “In fact the business community is already feeling the effects.”
While adding that panic is unnecessary, Ellul pointed out that we “have to be realistic and accept the facts.
“With timely and targeted measures we can install the confidence and stimulus to get through these unpredictable economic times.”
Stressing on the importance of proactivity, the MEA proposed a number of measures that would “serve as a buffer to prevent the Maltese economy from slipping into recession like many other economies worldwide.”
Similarly to MCCEI’s proposals, the MEA called on an immediate reduction of electricity rates to both “households and business, to reflect current international oil prices”.
Furthermore, the association asked government to “pay, on a temporary basis, part of the wages lost by employees in manufacturing companies who fall on a four day week. This measure will alleviate the hardships suffered by such employees and the funds spent will serve to retain the level of aggregate demand in the economy.”
Expediting MEPA’s development permits was also on MEA’s priority list.
With regard to action taken by the Employment and Training Corporation (ETC), the association said: “The recession will imply further economic restructuring for Malta and those who lose their jobs might be offered employment in jobs that require different skills to the ones they currently have. Empowering ETC will prevent situations of structural unemployment once the international economy recovers.”
Among other recommendations put forward by the association, one finds the idea of using EU funds on important infrastructural projects to improve the tourism product; the laying out of a job creation strategy “with specific action plans for the generation of green jobs, and employment opportunities in potential growth areas such as medical tourism and Islamic banking”; as well as the increase of frequency in visits by foreign business delegations so as to capitalise “on the relative economic stability of Malta” and promote the country as a safe haven for investment.
Contacted by Business Today, GRTU Director-General Vince Farrugia said: “We have been telling government about the need of a stimulus plan since last summer.”
Arguing that Malta is a small enough country to afford having government “go door-to-door to industry, tourism and commerce,” Farrugia said that before government lays out a “big plan, it must identify what the real problems are, sectorally and firm by firm.”
He also emphasised that something must be done to ease cash flow. “Be it tax or Enemalta, everyone is expecting payment tomorrow,” he said.
“We also need to get the orders moving, and government must help. Exporters are finding it hard because of lack of competitiveness,” he added.
Once the proposed audit is carried out, government must do its utmost to save industries from sinking, without “the holier than thou anti-entrepreneurial attitude which has to be erased. We must stop thinking of the idea of helping the capitalist as a wrong one, those days are over,” he said.
“Order books are drying up while government projects are hullabaloo in the air,” Farrugia insisted. “Once the recession is over, we must have more factories and more hotels and government must stop waiting for the private sector to invest. If we need a hotel next to the Mediterranean Conference Centre or next to Casino di Venezia, what are we waiting for to get them built? Government should get such projects going and then lease out the property to the private sector. Let us create a new factory or a new hotel – not a new parliament!”
The GRTU also called for the identification of certain companies “who are strong enough to win orders and have the state contribute by means of bridge financing. If we don’t go for such action, we will still have to foot their bills when their workforces are made unemployed.”

ddarmanin@mediatoday.com.mt

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04 February 2009
ISSUE NO. 568

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