The majority of small business owners in Malta think the country is moving in the wrong direction, according to a new survey by the Chamber of SMEs.
Some 80% of respondents said that they think the country is heading in the wrong direction - a jump of 16 percentage points since the same question was asked in the second quarter of the year.
“From feedback, it is very clear that businesses have strong opinions about the level of corruption and lack of good governance in the country and they are worried about it,” Chamber CEO Abigail Agius Mamo said.
“The negative sentiment that we see in the general public about news related to corruption is reflected in the attitudes of business and they want it to be addressed. It is also important to note that businesses rank inflation very highly as a national issue and not just a business issue,” she continued.
Photo: Chamber of SMEsEmployee shortages, inflation still business’ top concerns
The survey of businesses that employ up to 250 people had 423 responses through an online survey by MISCO that ran between October 11 and October 20.
Respondents listed employee shortages as the top concern, followed by increasing inflation and unfair competition.
Misco Director Lawrence Zammit said that when speaking about employee shortages, it is important to clarify that the issue is not simply of quantity but the quality of the workers.
Photo: Chamber of SMEs“The issue is not about issuing work permits, it is about the level of skills that are available on the market and a question of upskilling the labour force in the country,” he said.
Government must tackle corruption and lack of good governance
When asked what they think are the top issues that the country is facing and that the government should do something about, close to 40% of business owners said that the levels of corruption in the country and the lack of good governance are their most pressing concerns.
“The negative sentiment that we see in the general public about news related to corruption is reflected in the attitudes of business and they want it to be addressed. It is also important to note that businesses rank inflation very highly as a national issue and not just a business issue,” Agius Mamo said.
Photo: Chamber of SMEsConcerns about overpopulation linked to abuse
She noted that overpopulation was also ranked closely as a national issue businesses are concerned about, which she said many linked to abuse in the system.
“It might seem contradictory that SMEs are complaining about having a lack of employees but also saying they think the country is overpopulated,” she said.
“However, our interpretation of this is that businesses feel that part of the overpopulation problem is linked to people abusing the system. Some people are coming to Malta with a work permit in hand and finding that there is no job for them. Then, when 15 of them end up living in an apartment or on the street trying to earn a living through unconventional means, it is creating frustration among people,” she said.
She said that the government must give a clear indication of how it intends to tackle abuse and in what direction it wants to shift the economy.
“It is clear that Malta depends on foreigners because we don’t produce enough people to sustain the economy, however, businesses are saying clearly that abuse must be tackled,” Agius Mamo continued.
“It would be a mistake to close the tap because we still have a big gap in human resources. But there are many ways in which things can be done better and I think that if we can tackle these issues we would be leaping in a positive direction.”
Uncertainty holding businesses back
Photo: Chamber of SMEsAnother issue that emerged from the results is that general uncertainty in the country is holding business owners back from further investment.
Almost 60% of respondents said that they were not sure whether it would be a good time to invest over the next 12 months, while some 35% said that they didn’t think there would be a good time to invest in the coming year. Just over 15% of businesses said they would willing to expand their investments.
“People will invest if they are secure in the future," Zammit said. "It is interesting that well over half of respondents are not sure, but aren’t saying no,” he said. “To me that signals that there is an appetite for investment but that the lack of certainty is holding them back, because otherwise, they would have just said no.”
Zammit added that he believes businesses feel that their investments aren’t being matched by an appropriate increase in general upkeep by the government.
“For example if a hotel makes a huge investment to upgrade its product, and whoever is in charge of keeping the streets clean is leaving them dirty, it is not surprising that they would then say they are unsure of making future investments.”
Deputy President of the Chamber Philip Fenech said that this is particularly pronounced in the tourism industry.