A vote of confidence

Our ‘Policy for Retailers’ is a vote of confidence in small businesses in our bid to enable retail operators to take the lead in the next wave of economic growth for our country. It is high time that local retailers and small operators are recognised at the higher levels of our policy discussions. In fact it’s the first time that a political party has structurally recognized the relevance of retailers in the local economy and striven to set out a framework of policy measures intended to uplift them from being isolated stand-alone businesses to an industry in its own right.

We set out three policy pillars intended to create retail spaces which provide a better experience in our villages, make our retailers more efficient by bringing their operating costs down, whilst putting into motion innovative measures to grow their revenues and expand their market reach. 

Our ‘Policy for Retailers’ seeks to substitute aggressive land-use policies with intelligent regeneration of run-down areas serving as an opportunity for transformation of derelict structures into livable urban spaces enjoyed by the community. We want to ensure that local communities are no longer short-changed by commercial activity in their localities. We are therefore proposing to ring-fence a small share of the VAT collected from the retail activity by the businesses in the locality such that the respective local councils can deliver the necessary level of cleanliness, urban improvement and waste management services. 

This retail space improvement will contribute to our agenda of enhancing the retail experience; not just on our main shopping streets but also in the retail zones in our villages, promoting a wider outreach of activity. This is a key driver for our efforts to establish Malta as a regional shopping destination through which we can grow the retail market in an unprecedented fashion.

Moreover, our investment aid policy will recognize retail as a priority economic activity providing financing support and loan guarantees to small businesses that want to improve their offering or invest further in new operations in Malta or Gozo. We believe that this is the key that will unlock the potential of retailers who are keen to invest in their operations but have no access to finance due to the local bank lending limitations. 

Most importantly we want retailers to use their profits in further investment in their operation because we believe that their re-investment will generate the much needed economic momentum in the sector. The fiscal incentive that brings down the effective tax rate for SMEs down to 10% for their first €50,000 in profits is an innovative taxation framework which rewards responsible retailers. 

For them to benefit from the tax credit they have to be fully fiscal compliant, demonstrate year-on-year carbon footprint reductions, contribute to their local community whilst ensuring that the working conditions of their employees are fair, decent and family-friendly. This is what we stand for. Not handouts but a shared economy built on social responsibility.

This will not be an expenditure but a timely investment in the thousands of our small businesses on whom we have built our economic development. The investment being made in this fiscal incentive will generate an unprecedented stimulus in economic growth, incentivise further investment, encourage further employment and generate better margins and operating profits for small businesses. Together with an enhanced degree of compliance, this will generate more tax revenue, enabling the government to make even further investments and provide additional incentives. 

Then again I hasten to point out that this is not just about tax incentives: our policy is driven by our determination to deliver growth, our commitment to promulgate fairness and our passion to empower businesses to grow from micro to small and from small to medium. This economic mobility is the cornerstone of our economic agenda and we shall leave no stone unturned to make it happen.

The proposed measures for retailers are testament to our over-riding economic policy which is driven by the nurturing of talent, the accelerated growth of SMEs, the promotion of innovation, more efficient land-use and the entrenchment of low carbon activities as the basis of our sustainable development. 

This policy-driven approach is also reflective of our political attitude. There is another way to politics other than spin, tweets or demonisation of the opponents. I believe that in today’s world common good politics is not as much about criticism as it is about being constructive, innovative and proactive – delivering solutions to the challenges. Aggressive polarisation is devaluing the relevance of politicians, portraying us as a self-centred bickering bunch which has lost the plot.

Many are also asking why is the Nationalist Party setting out its policy options so early before a general election. The rationale is clear and straightforward: we are not keen in playing hide and seek with the electorate. At the outset we were clear that we were not intent to waste our term in opposition but rather rethink our key policy pillars and set out what we stand for, making a difference even from the Opposition benches.

The next step is now for the retailers themselves to participate in the further shaping of this policy. We are open to review, refine and carve out the final policy framework such that it will belong to them more than to us. 

Ultimately this is a policy that was conceived in their interest, built to address their challenges and empower them to grow and evolve into a leading economic pillar. We are confident that they will run with it.

Claudio Grech is shadow economy minister and was invited by MaltaToday to write about the latest PN proposal for retailers