The Gozo Business Chamber held a meeting this week with the Prime Minister at the Castille to present proposals for the coming Budget 2017.

"In tandem with last year's single proposal of the permanent link," the Chamber said that it feels that this remains "the absolute priority as no incentive can be as good, in the long term, as having a permanent physical link. Connectivity remains the main stumbling block for business to grow in Gozo."

The Chamber said that "to highlight just two, the latest employment & GDP statistics need no explanation that the Maltese economy is performing well. It is at times like these that the Government has to be more courageous than usual and propose incentives to further stimulate economic growth especially in areas with untapped potential."

Many incentives do not actually cost the Government anything as the value added created in the economy leaves a positive effect on public finances, the Chamber said.

The GBC said that it is on these lines that it has compiled a set of proposals for next year's national budget. "Gozo is one of those areas with huge untapped potential that can considerably contribute to the national economy."

"It is increasingly worrying that the carrying capacity of the three Gozo Channel Ferries has now reached saturation point and there is no known contingency plan in place just in case a serious breakdown occurs especially when these ferries are now reaching their projected service lifespan," the Chamber said.

For his part The Prime Minister said that Gozo needs a sustainable economy, for example the Barts project, together with a new hospital. Through these projects, which will be started in the coming months, the students attending the medical school will help bolster the quieter months.

Dr Muscat also mentioned that it was his wish for Gozitans to have more input in decision making for Gozo.

The Gozo Business Chamber Proposals for Budget 2017 are shown in full below.

1. Connectivity

Tunnel

"Thus the Chamber is insisting that all necessary funds for all studies required related to the Sub Seabed Gozo-Malta Tunnel, started or yet to start are, once again, budgeted for in next year's budget. Transport Malta should be in a better position to establish the amounts required.

Fibre Optic Cable

Progress is very slow on this project and is behind the projected timeframe. Gozo cannot attract business without such security of supply and one cannot be tempted to wait until the sub seabed tunnel is completed in order to route through it and save on costs. A clear timeframe and budget allocation should be made.

Helicopter and Fast Ferry Service

Much has been said but little was done. These have proved to be loss makers in the past and various private initiatives were not successful. The Government must either be ready to directly subsidise such services or combine with more profitable operations so that one can have a secure return on investment.

Fourth Ferry

The tunnel connection operational starting date is targeted at post 2020 depending on various studies. It is unthinkable to risk having the only road to Gozo unoperational even for a few hours. As explained earlier the current ferries are now operating at capacities never seen before when they are reaching a more frequent maintenance period. The, till now, unfeasible fast ferry service would take some of the burden especially if it can also transport vehicles. Thus the Chamber cannot see another option but to recommend the acquisition of a fourth vessel. This will be a fill-in-the-gaps measure so that it does not necessarily mean acquiring a built-for-purpose expensive new vessel.

Short Term Proposals

Relaunch and fine tune the prepaid Ferry ticketing system especially for frequent travellers. The system is already in place and barely needs investment but many do not know about it. Many schemes need to be more realistic. We cannot expect that a Maltese tourist has to travel 52 times yearly to qualify for the same reduced rate of a Gozo resident. 15 times would be more attainable. Neither can we keep losing all credit unused in the current Daily Travellers card when these are used mainly for work or studying purposes. A longer period of 6 months from the current 3 will solve this problem where it hurts. Cards should also be made possible to be shared between the same company employees or couples. Cards should be kept and not unnecessarily replaced every time validity ends. A simple online top-up is much less hassle.

Boosting the off peak season

Up to three free return Gozo Channel tickets per person flying in through MIA or the Sea Terminal when staying in Gozo for 7 or more consecutive nights in hotel/holiday accommodation in the off peak season. This will enable staying in Gozo while visiting attractions in Malta. The airline or International ferry ticket needs to be validated automatically (by stamping date and time on ticket) on board the Gozo Ferry when crossing to Gozo the first time.

Off peak pre-paid tickets targeting Maltese domestic tourism should be introduced where an attainable 8 ticket bundle can be bought at Gozo resident's rates.

Group ferry refunds/discounts, for Groups of 20 or more persons staying for 7 or more consecutive nights. If booked for a conference, the stay is to be of not less than 3 nights. All year round, to avoid the inconvenience of un/loading and removing a stumbling cost, such qualifying groups will have their coach travel free of charge.

Introduction of scheduled half-hourly service at peak times: Many extra trips are being performed so why not have things more organised? Although it might look risky, Gozo Channel has all the required traffic flow statistics to fine tune and not having half empty vessels. This will reduce waiting time considerably and the Chamber is sure that, as anywhere else, once service is created it will be used.

Introduce off peak half price ferry tickets for heavy vehicles To make up for the additional burden the suspended Sa Maison cargo route has created on ferry capacity during peak hours, those heavy vehicles crossing between 2300 hours and 0400 hours will pay half the normal rate.

Introduce direct non-stop bus service

A Circular nonstop Cirkewwa – University/Mater Dei – Airport – Cirkewwa route synchronised with ferry timetable between 0600 hours and 2000 hours. The current X1 service takes too long.

2. Property

The current property sector boost in Malta has not happened by accident. The Government listened and the sector gave a badly needed kick start to the whole economy. The sector is proven to be directly associated with all other industries and the wealth spread is across all strata of society.

Unfortunately one of the main incentives, the First Time Buyer Stamp Duty Exemption did not have the same success as in Malta, actually it fuelled Gozitans increasingly employed in Malta to buy and settle there. Due to low demand prices in many categories, especially residential, have yet to recuperate pre 2008 levels whilst costs have spiralled.

It is also no secret that the sector in Gozo was always heavily dependent on the holiday home market. While emphasis should be to respect and preserve the rural characteristics of Gozo which attract the main buyer in the first place and creating high quality developments, one cannot ignore the fact that the sector GDP ratio compared to that of Malta is much higher and provides for many jobs. Gozo currently has the highest vacant property rate, a lot of investment lying idle. Properly managed and strictly keeping development within existing ODZ boundaries this sector has huge growth potential.

Suspension of stamp duty for a one year period, on the acquisition of immovable property in Gozo of any value. Although at face value this would seem to lose revenue to public coffers, due to increased sales the increased amount directly from the Final Withholding Tax from the Vendors part will make up for the shortfall. This besides the ripple effect on the whole economy as mentioned before. This was proven by the first time buyer scheme in Malta.

It is also to be noted that since this suspension will attract mainly holiday home buyers, contrary to first time buyers where they forcibly require where to live permanently, this suspension will create property transfers that would not have ever existed in the first place.

Suspension of AIP requirement and all other limitations for foreigners to buy property in Gozo for three years. Having excess supply, there is no fear to limit purchases to foreigners to safeguard local requirements.

3. Tourism

The new trend in opening boutique hotels in Gozo is good for the sector and is to be encouraged further but Gozo needs branding and this cannot happen without world known Brands being present in the first place. The presence of these Brands gives a level of assurance to the first time visitor.

10-year tax holiday for new hotels in Gozo operational within 5 years of over 100 rooms in the 4* category and upwards.

No stamp duty or sales tax in the coming two years to be paid on land or property transfers to build such hotels.

Government backed long term low interest loans capitalising on the current low interest scenario and possibly utilising ECB or similar funds

Identify a theme park area. The derelict and dumped upon land in the Xwejni area can be a serious contender in the right location. Once identified, an expression of interest for a design, build and operate park should be issued. This park will create a new niche tourism in itself.

Gozo should be promoted more aggressively and separately to target emerging specific niches that unlike others are all year round like:

Sports

Medical and wellness

Retirement

Religious

Eco

New yacht marinas and temporary boat parking quays are badly required. Gozo is visited by the thousands of boats owned by Maltese and also foreigners. Many find berthing impossible and thus restaurants and other establishments are losing out on this lucrative market.

Marsalforn breakwater urgent reconstruction. A lot of damage is happening every year. We feel that if the Government does not have the necessary funds, a request for proposals for its reconstruction should be issued, involving the private sector which can recuperate the investment by commercial activities like real estate development, yacht marina, reclaimed beaches/lidos & water sports facilities.

All year round employment in those sectors that are suffering from seasonality, e.g. training and educating the employees during the low season. This can be EU funded.

4. Attracting Industries

A 10-year half tax holiday of what is paid in Malta for new enterprises employing 25 persons within two years in niche markets like financial services, software development, health tourism, etc.

5 year half tax on employment income to attract enough personnel required by operations above. It's useless attracting the companies if we cannot attract enough employees to operate

5. Traffic

Reorganise traffic flow in Central Victoria by eliminating through flow traffic heading to Marsalforn, Zebbug & Sannat from Republic Street and divert to earlier side streets. The construction of a ring road round Victoria is a medium term requirement. A long started project never completed.

Completion of the Mgarr – Dwejra road. Only minor parts are left to be completed yet nothing seems to happen for years.

Resurfacing remaining main roads like the parts left out leading to Ramla from Nadur and Xaghra. The Victoria – Marsalforn needs to be realigned and redone."

Conclusion

In conclusion the Gozo Business Chamber said, "we may seem to be moaning that we have so many disadvantages and unlevel playing fields, yet we opted to come with solutions. We have a vision that one day Malta and Gozo with their separate characters can both equally excel. But we need leadership that sees long term away from the politics that had hijacked Gozo for years. Dear Prime Minister, only your direct attention in implementing our solutions can give us the courage to fight for tomorrow."

Photograph: Alain Salvary

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