Issue link: https://maltatoday.uberflip.com/i/1238298
13 maltatoday | WEDNESDAY • 22 APRIL 2020 OPINION THE COVID-19 outbreak and the sub- sequent adoption of containment meas- ures by health authorities has resulted in a slowing down of economic activi- ty. Consequently, businesses are either currently experiencing or anticipating significant constraints on their cashflow and working capital, including potential liquidity challenges. It is within this context that Maltese Government has enacted a number of complementary measures that are in- tended to assist business during these challenging times with the scope of en- suring that Maltese businesses are well placed to make the most of the recov- ery. Against this background, the Ministry for Finance and Financial Services was very quick to put forward its propos- al for €350 million guarantee scheme, which were approved by the Commis- sion on the 2 April, 2020. Upon this approval, the Government has entrusted the Malta Development Bank to develop the MDB COVID-19 Guarantee Scheme (CGS), with the pur- pose of guaranteeing working capital loans granted by commercial banks in Malta to meet requirements of business- es facing cashflow disruptions caused by the COVID-19 pandemic. The CGS is target oriented to instigate commercial banks to mobilise funds by providing credit where it is needed. It is structured for banks to leverage the €350 million guarantee scheme, in- to €777.8 million in new working capital loans to support all types of businesses in Malta. Working capital costs under the CGS are diverse and include salaries, rental costs, energy and water bills and fuel, unpaid invoices (due to decrease in rev- enues), acquisition of material and stock for continuation of business, expenses directly related to contracts which were cancelled or postponed and mainte- nance costs. Any business irrespective of size and type, can apply for loan amounts that can go up to €5 million. It is foreseen that under the CGS, busi- nesses will benefit from improved access to liquidity, at advantageous interest rates ranging from 1.7% to 3.5% and with a repayment period of up to six years. It provides the much-needed breathing space and flexibility for businesses by providing a six-month moratorium on both the interest payments as well as on capital repayments. We are constantly monitoring the ef- fectiveness of these measures especial- ly in light of the ongoing consultations with the business community that re- sponded positively to the economic support measures rolled out by Govern- ment thus far. Yet again, the Ministry believes that government ought to step in further. Having reached agreement with the Bank of Valletta, HSBC, APS Bank, Me- Direct, BNF, Lombard Bank, Izola Bank and FCM Bank, the Government is ready to subsidize interest rates on the working capital loans for two years and up to a maximum 2.5%. This means, that businesses may pay as low as minimum 0.1% of interest. More specifically:- • If the interest rate is the minimum 1.7%, Government will shoulder 1.6%, whilst the company is attrib- uted the remaining 0.1% of inter- est; • If the interest rate is the maximum 3.5%, Government will shoulder 2.5%, whilst the company is attrib- uted the remaining 1% of interest. This subsidy will apply to the first 48 months after which the working loan is granted. Undoubtedly this measure allows Gov- ernment to step in the right direction to shoulder a significant part of the already advantageous interest rates on working capital loans. Concretely, it will inject around €40 million in businesses' pockets, easing the negative impact of COVID-19 on busi- nesses, self-employed and families. I am positive that the financial pack- ages the Maltese Government has de- veloped with the positive input and col- laboration of the business community, will place the Maltese economy to be amongst the first to make the most out of the recovery in post COVID-19 phase and indeed continue to flourish. With this in mind, I encourage all stakeholders to continue collaborating with the Government, pull the rope in the same direction and aim to surpass the challenges of the COVID-19 out- break together. The recent Legal Notice on the Plan- ning Authority has been deliberately tailor-made to favour developers and to further restrict the rights of residents and citizens. Whilst the Minister has consulted the Malta Developers' Association before drafting this Legal Notice, with an uncall- ed for urgency in such a critical moment for our country, none of the representa- tives of citizens and residents have been consulted. Why, Minister Aaron Farrugia? It seems that the Minister has taken ad- vantage of the unprecedented crisis we are in. He is introducing measures whereby the PA sessions will be held via internet or via other electronic means. But the meet- ings of the Planning Authority sittings are legally bound to be public meetings. Is the Planning Authority going to guarantee unlimited access to anybody during the sittings? And what about those citizens who do not have internet at home? Are the Minister and the Planning Au- thority guaranteeing that EneMalta will never interrupt electricity distribution in all Malta and Gozo whilst Planning Au- thority sessions are being held? Are they guaranteeing that Go, Vodaphone and Melita will never interrupt their services all over the country, whilst sessions are going on? All this is not guaranteed by the Legal Notice. Indeed, this Legal Notice does not allow any proviso whereby any resident can de- mand redress and a re-appointment of the sitting if there is any power failure. Basi- cally, the Legal Notice is making each of the future sittings of the Planning Author- ity more difficult to access for the general public. And, by doing so, it is going against the concept of full transparency, which is a clear requisite demanded by the Aarhus Convention, to which Malta is a signatory. The Legal Notice is also investing the Chairperson of the P.A. with extra pow- ers, which allow him to take unilateral decisions. These powers could be easily abused by a Chairperson who has devi- ous intentions. In fact, Regulation 2 of the Legal Notice states that Chairperson may "where he deems appropriate" convene hearings by electronic means. This allows the Chairperson absolute discretion to al- low some applications to be held by video conferencing whilst others are not. Of course an honest chairperson would not abuse of such system. But an hon- est chairperson is not enough. We have seen who some of the components of the Planning Authority have been: Johann Buttigieg, a Labour Party lackey who was caught travelling with developers whilst their application was being examined by the PA, and who now has had his iced bun increased from 80,000 to 100,000 euros a year plus perks; Matthew Pace, an estate agent whose company he was employed with was busy advertising the DB project that he was working on to get approved; Jacqueline Gili, who interrupted her can- noli and granita Sicilian holiday to fly down to Malta on a private plane (gentle concession of Johann... and our taxes) to vote in favour of the DB ITS project. Can you imagine if any of these were to be promoted to the post of Chairperson of the Planning Authority? And finally, while this Legal Notice makes way for a tsunami of development permits to be given out like pastizzi, resi- dents continue to be deprived of effective remedies. There is provision in the law for the En- vironment and Planning Review Tribunal to "hear and determine all appeals made by any person or institution or any de- partment or agency of Government, hav- ing a direct interest and aggrieved by any decision, ruling or direction in relation to Building Regulations and Building Con- trol Regulations, even where such a deci- sion, ruling or direction does not emanate from a development application process." But this article of law has now been held in abeyance which means that it is not yet in force - FOUR full years after the law was enacted. And the public has no possibility of recourse. It is not understood why the public has been deprived of this remedy. Do not the collapsed houses of the Walk- ers, the Vellas et al. matter any more? Mir- iam Pace's death is business as usual? Is the utter uselessness of the Building Reg- ulation Office (BRO) irrelevant? As the Law stands now, the answer is yes. Minister Aaron Farrugia, despite his youth and supposed novel behaviour, seems to have embarked on preserving the "kontinwità" with his predecessors, which means privileging Sandro's lobby, that provides so much of the finances for estab- lished and budding politicians' campaigns. Plus ça change ..... et plus c'est la même chose. Clayton Bartolo Arnold Cassola Beyond surviving: preparing Maltese businesses to flourish Restricting the rights of residents Clayton Bartolo is Parliamentary Secretary for financial services and the digital economy Arnold Cassola, academic and politician, is former secretary general of the European Green Party and former member of the Italian Parliament.