The Malta Developers Association is keen to work with commitment, a vision and great responsibility, according to MDA President Sandro Chetcuti when he addressed the fully packed hall at the Association’s Annual General Meeting on 9 February, 2017, at The Palace Hotel, Sliema.
“The great successes and impressive results we managed to achieve speak for themselves,” he said. “My proud boast is that the MDA was the right source of brainstorming and creativity, resulting in many more jobs. I thank you, Mr Prime Minister, on behalf of your Government, for choosing to have faith in us and realising that the proposals we presented to you were in the national interest.”
The foundation of all this, Mr Chetcuti pointed out in one of his best speeches as MDA President, is the excellent communication and dialogue with the Government at all levels. He went on to also thank Opposition Leader Simon Busuttil and his Members of Parliament for being the first Nationalist leader who fully opened all doors for communication with the association.
“Today I can stand here without hesitation and say that we have the two biggest parties in the country co-operating with us and open to discussion at any time and any moment. Our gratitude to both of you.”
At the core of the MDA’s success was its high level of preparation: “always committed, always focused, always specialised – with all the details handy”. Just as the MDA’s members work hard to earn their livelihood, so is the MDA working hard for the benefit of the industry. “That is what we intend to continue to do and I appeal for some new faces to come forward to serve the MDA in the near future,” Mr Chetcuti said.
The MDA’s biggest battle is against unnecessary red tape, which is stifling the industry. “We are weary of it. You must be made of steel to continue doing business and operating nowadays. It is not always the politicians’ fault. We know what the problem is: there are regulations that are being interpreted fiscally so as not to make bureaucratic mistakes. This approach is a recipe for disaster because no set of regulations can cater for every eventuality.
“At the same time, whoever tries to be practical is often accused, lambasted, alleged that he is abusing. So, people are confused about what to do. This is causing us unnecessary pain. We need to work together in a professional manner so that we can find the fine line that goes neither one way nor the other. We are totally against abuse but at the same time we need to continue working.”
Mr Chetcuti stressed the need to maintain the momentum of the success achieved so far. “Let us not be hampered by the wealth that has been created. Let us work sensibly with our feet firmly on the ground. This is why we appointed KPMG to conduct a professional, scientific study on the economic impact of the construction industry and the amount of work it generates. We have been dreaming of launching this kind of study for the past two years,” he said.
“As a result of this study, any more suggestions we will continue make will not only be based on gut feeling or business intuition but we must be concrete based on rock-solid research so that the industry will continue to progress with a vision.”
The MDA has always believed in the need to raise the industry’s profile. Although the Association has gone a long way in this regard, there is still a lot more that needs to be done through hard work, keeping its members informed on all that is going on and anticipating what is going to happen.
Among its recent initiatives is working with the Building Industry Consultative Council, headed by Perit Charles Buhagiar, in the introduction of the Skill Cards. The MDA Academy has been set up. “We are ready, fully equipped to ensure the workers obtain the necessary training to get the Skill Cards they need to be fully qualified. Today you do not have any more excuses. I urge all the contractors in Malta and Gozo to contact us. This is a positive, concrete initiative of the MDA.”
The MDA is also producing an educational and informative programme, broadcast every Monday evening on Smash TV. It’s Facebook page is highly effective.
Mr Chetcuti ended on a note of responsibility: “Our criticism of the Government, the Opposition and others has to be constructive. We need to offer criticism so that we can win arguments, to learn from the mistakes that are being committed. It is not in our interest to be controversial,” Mr Chetcuti said. “We offer criticism so that we can educate and move forward. We must tell the truth. Perhaps sometimes the truth hurts. We must say what is appropriate and just, so that we are understood more.”
He urged his members to feel responsible for that sector of society that is falling behind. He thanked all those who responded continually to his appeals for charity, including the Community Chest Fund, but much more needed to be done. The MDA needs to come up with proposals to the government of the day, which is facing social problems.
“We know, for example, that rents have exploded because there are good incentives, there is a lot of business and we have foreigners working here. But the Government is going to face a big problem to accommodate low income earners. We also need affordable rental accommodation.
“So, we are obliged to come up with ideas not only to make profits money but in trying to offer assistance to society, which is falling behind. We must offer innovative solutions to the Government with win-win situations, which the Government can adopt. They may not all be interesting to us but they need to be interesting to society. After all, if society does not fall behind, we will continue to benefit from the wealth we are creating,” Mr Chetcuti concluded.
Prime Minister Joseph Muscat picked on Mr Chetcuti’s point on rents, stating that this was being addressed both in past Budgets of the current administration, with the removal of the obligation to declare rents in income tax returns and the choice of a final withholding tax of 15% on rents received, and in new measures to be introduced this year based on the MDA’s proposals.
He pointed out that this “enormous incentive” to save 20% in tax was a way to take part of the property sector from the black economy to the legitimate economy. Yet still there were those who increased the rent by 15%, which was not right. Among the schemes to be launched are:
- those who rent at social prices will have their final withholding tax lowered from 15% to 5%;
- a pilot project of those who are prepared to rent over the longer term at a reasonable price; and
- increasing the subsidy.
Dr Muscat said he preferred to see the market regulating itself in a sustainable manner, otherwise it would have to launch a consultation process to regulate the sector. “I appeal to everyone in this period when we are testing the market not to seek short-term gains but to truly see how to achieve sustainability,” he said.
Dr Muscat referred to the construction industry as the cornerstone of the Maltese economy and the KPMG report as one that would back the MDA’s arguments for the sector. “If the construction sector does not progress, the economy cannot progress,” he affirmed.
The current “boom” state of the economy must become the “new normal” and was a situation that enabled the government to plan for the next 10-15 years. He said it is important to have open lines of communication with the MDA. The reforms in the Lands Department, leading to the setting up of the new Lands Authority, is to lead to the introduction of totally new ways of conducting land valuation.
Dr Muscat concluded: “We opened the door, giving the red carpet and you have been able to give good proposals, most of which have been accepted by my government. I thank you for your work. I promise to continue to provide you with this positive atmosphere so that you can continue to create business and grow, along with your numerous workers for the benefit of the country.”
Opposition Leader Simon Busuttil paid tribute to the MDA’s work, which has shown in recent years that “your sector has become, more than ever before, important and relevant – also in setting the political agenda”. He singled out Mr Chetcuti:
“On a personal note, I appreciated greatly the effort you, Sandro, have made personally to iron out any differences between the PN and the developers. I also appreciated your closing comment on the social aspect and without hesitation you mentioned things that are not normally heard in such a gathering.”
Dr Busuttil affirmed that he believed in sustainable development and assured the MDA’s members that under a Nationalist Government the construction industry would not stop. “What will stop is the need to go to Castille to beg for what is yours,” he said.
“The economy and the environment are not conflicting but two sides of the same coin. If they move hand in hand, not only will there be greater economic growth but growth that leads to a better quality of life from which we will all benefit.”
The PN’s vision for the sector is that it should grow and make profits, which is positive but not enough. “We want your sector to play a greater part in improving our quality of life,” he said. This vision is outlined in the recent document, A Better Quality of Life for You. He went on to list a few examples of what is in the document:
- lower income tax to 10% on the first €50,000 profit for all small businesses – a saving of up to €12,500;
- continue to lower tax on property so long as the building is energy efficient and there is a regeneration of certain zones of the country that have fallen behind or are not part of the zones that today are progressing, like Marsa, Hamrun, Qawra and Bugibba;
- incentives to encourage higher standards in the companies working in the construction sector, fostering greater investment in plant, equipment and vehicles;
- the biggest injection ever in the national infrastructure over several years – roads and pavements in villages and arterial roads – and in alternative transport, including the use of a modern, efficient train or tram network both above and below ground, linking Malta and Gozo; and
- a government that will behave transparently and justly with everyone. Decisions on who is given government land, permits and new projects are taken in a transparent manner. Everyone will be given the opportunity to bid and the value will be just and realistic.
Dr Busuttil said the Planning Authority would remain separate from the Environment Resource Authority. Both would be strengthened and not subject to political interference. They will operate with transparency and a sense of justice with everyone.
He concluded by saying that the sector must contribute to improving the quality of life of us all.
17 February, 2017