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8 OPINION 10.11.2022 Anyone recall the slogan "Think Small" now? George Mangion George Mangion is a senior partner at PKF, an audit and consultancy firm, and has over 25 years' experience in accounting, taxation, financial and consultancy services. His efforts have made PKF instrumental in establishing many companies in Malta and established PKF as a leading professional financial service provider on the Island T he Small Business Act (SBA) was piloted by the PN government in 2011 and among other things decreed that a College of Regulators be convened at least three times an- nually. e SBA had a late start under the government headed by Jo- seph Muscat, so much so, that he triumphantly announced the holding of the first meeting of the College of Regulators six years later in April 2017. is speaks volumes for the esteem which is evident for small and medium sized enterprise. We remember the euphoria of setting up a mega "Private Public Partnership" with Vitals Health Care (later the three properties ceded for €1 to Stew- ard Healthcare) to revamp hos- pitals. e lofty esteem for mega business dwarfs the significance of SME's which contribute sub- stantially to the domestic econ- omy. What is the need to shore gold plated regulation, which in practice shuns start-ups? Understandably, we have a myriad regulating bodies - sometimes overlapping in their respective agendas. e unique- ness of the College for Regu- lators (see Small Business Act Chapter 512 Article 13) is that it aims to simplify the regulatory burdens on SMEs by increasing cooperation by building syner- gies among the regulating enti- ties. Why have meetings of e College of Regulators not been irregularly convened as stipulat- ed at law? e answer is that the spirit is willing, but the body is weak. Perhaps the SMEs in Malta can earn the attention of Castille to inculcate a ink Small concept as was originally mandated by the EU directives. It is good to know that the promulgation of the monolithic Small Business Act was piloted with much fan- fare in July 2011. Historically it formed part of the ubiquitous Small Business Act for Europe (SBA) endorsed by the Europe- an Council in December 2008. It now sits silently in a library of dead letter legislation which is gathering dust on some non- descript shelf in a majestic building called the Main Guard - stoically facing the Grand Palace in Valletta. Observers lament that the "ink Small First" principle is not a reali- ty and the toolbox for SMEs is spartan. eoretically on paper SBA is the sole guardian for SMEs as it targets small enterprises (employing less than 250), ie the overwhelming majority of enterprises. It is a pity that ten years down the line and really and truly the 'think small first' concept has never quite taken off the ground (a Dodo). Some argue this needs a cultural change in local politics and therefore is difficult to achieve - sympathiz- ers please act contrite and take a deep breath. Just grin and bear the agony that SMEs in Malta have for a long time been seen by the State - as the Cinderella of the business community. But as the pandemic attracted millions of funds from EU to stimulate the flagging econo- my, this opened the floodgates and a new €1.5 million fund is allocated to enable newly devel- oped technology make it to the market. Another bold attempt to launch a 'one-stop shop' through 'BStart' scheme aims to assist start-ups in establishing their business in Malta includ- ing assistance with applications to benefit from existing incen- tives. BStart 2021 will be divided into two parts, the "Pre-Busi- ness Plan", where a company can benefit up to €10,000 on each project and the "Post-Business Plan". For those startups that present an economically viable busi- ness plan, a maximum grant of €200,000 can be awarded. is grant will be spread over a peri- od of not more than 36 months, with €20,000 distributed quar- terly. Complementing the BStart 2021, there is Start-Up Finance. An enterprise can receive the assistance of up to a whopping €800,000 for innovative enter- prises. Five years ago, PKF attract- ed the attention of a world-fa- mous Business Incubator and Accelerator with its roots in Boston, US and by now spread successfully to various branches in Europe and Australia. When introduced to the minister with responsibility for Malta Enter- prise it gravitated a visit by the economy minister and his sec- retary to a new branch in the Netherlands. With hindsight PKF regrets the seed fell on infertile land and withered away. Back to the present and a fund is being op- erated by the Malta Council for Science and Technology togeth- er with the Malta Development Bank and forms part of the FUSION national fund which helps finance research and in- novation. e scheme is split into two tranches: the Accelerator Pro- gramme, which provides finan- cial assistance to help validate products and get them onto consumer shelves; and the Loan Assistance Programme which helps start-ups cut through red tape and overcome banking ob- stacles. Between 2015 and 2020, through the aid granted under the BStart scheme, Malta En- terprise assisted 62 companies with individual incentive could be paltry sum of €25,000. On paper, rules written for a small business can be easily scaled up to cover bigger enter- prises, while doing the contrary is terribly complicated. Ideally, this motto should be used con- sistently and with more deter- mination throughout the whole regulatory and implementing process. Applying this principle will dramatically ease administra- tive burdens. Government de- partments FIAU, MFSA and MCESD are encouraged to re- spect the proportionality prin- ciple when it comes to judge SMEs in areas of compliance and administrative require- ments (including AML/CFT rules). is means that legis- lative or political provisions should scale down demands posted on SMEs, since as can be expected the impact on their activities is disproportionally high. But this is Utopian. In fact, the six-year hiatus in setting up an active College of Regulators did not help the SBA's cause. Un- less regulators meet frequently to shift through thousands of acts that generate unnecessary bureaucracy - then the molehill turns into the proverbial moun- tain and no Colossus will be strong enough to tame it. Undoubtedly, our political mindset is undeniably tinged with a colonial past and some- times it harbours an ingrained prejudice against the mot- to 'small is beautiful'. In the vote-catching arena, politicians tend to support anything that is larger than small which in their own misguided perception leads to the hubris when big numbers are broadcast to the masses (eg the kid glove treat- ment afforded to a select num- ber of high rise developers). Last, though not least, the now archaic SBA provisions mandate that any public sector entity rendering services and charging tariffs to the public shall carry out a customer satis- faction survey every two years, with the aim to modify the im- pact on the business communi- ty. It is the least one expects in the post-Covid roadmap while appreciating the tenets of a unique budget with a true social conscience.

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