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Editorial | Wednesday, 05 May 2010 Issue. 162

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Horror for little shops

The issue of whether shops should be allowed to open on public holidays or not has once again exposed the government’s deeply contradictory approach to free market economy principles in Malta.
In essence there is nothing new to the issue, which has been simmering quietly in the background ever since the Bay Street Complex in St Julian’s had campaigned – successfully, though the result was an uneasy compromise – for the right to open on Sundays.
On that occasion, Eddie Fenech Adami’s Nationalist administration had opposed the concept of Sunday shopping (and, by extension, public holidays) on quasi-ideological grounds: an opposition which was paradoxically supported at the time by the General Retailers and Traders’ Association (GRTU), which has now turned turtle on the same issue by coming out aggressively in favour of Sunday shopping as part of its new incarnation as the ‘Small Businesses Chamber’.
After much divisive lobbying and counter-lobbying – which included the presentation of a petition in favour of Sunday shopping to Parliament – the net result of the Bay Street campaign was a compromise decision that allowed certain retailers to do business on public holidays, so long as they were directly involved in tourism.
This naturally applied to the Bay Street complex itself, which included (and still includes) a hotel among its in-house facilities. So it was perhaps unsurprisingly that, having achieved its primary goal of being able to open its doors when others would be forced to remain shut, the St Julian’s shopping mall did not press the matter any further.
Bay Street had by all accounts won its immediate battle, but it is to say the least doubtful whether the several thousands who signed its petition would have been satisfied at the outcome – an outcome which effectively made little or no difference to the crux of the matter at hand.
To all intents and purposes, Sunday shopping remained off the cards for the many hundreds of businesses which were not directly involved in tourism, and the situation has not changed in any significant way ever since.
All that has changed is the government’s overall approach, which now appears to be torn between the two polar extremes.
As we all witnessed in the build-up to this year’s Freedom Day (31 March) and Workers’ Day (1 May) holidays, today’s situation is that individual businesses must now apply in advance for permission to open shop. On its part, the government treats applications collectively and decides (or not, as the case may be) whether to allow shopping on a one-off basis, and within certain restrictions.
But there is no clear-cut procedure that applies in all instances. In the case of March 31, government issued a Legal Notice that enabled shops to open on a voluntary basis... but with the ominous proviso that it did not want to “set a precedent” in future.
The fact that the Legal Notice had been issued very close to the date in question – almost at the eleventh hour, in point of fact – gave rise to suspicions that the entire decision had been taken specifically to accommodate some well-connected businesses, which were “in the know” from beforehand.
Be that as it may, this sort of ‘one-off’, ‘exception-to-the-rule’ approach is clearly not conducive to any long-term solution to the problem. And in fact, the same suspicion of preferential treatment has reared its head once more, as government again adopted a piecemeal approach to the issue ahead of 1 May. Only this time, the interim ‘solution’ hit upon by the Finance Ministry may have even violated the core free market economic principles upon which the European Union is supposed to hinge.
Faced with renewed demands by the GRTU (and also the Consumers’ Association) for shops to be allowed to open on public holidays, Finance Minister Tonio Fenech’s response was to make allowances on this occasion against a flat-rate payment of just over €700 – regardless of the size, scope and budget of the businesses concerned.
At a glance, it is difficult to even attempt to justify such a blatantly discriminatory measure, which can only favour the larger retailers at the expense of the smaller: a classic case of preferential treatment, if ever there was one.
This time round, GRTU has rightly dismissed the €700 fee as an ‘abusive’ tax, arguing that government appears to be treating the entire issue as nothing more than a revenue generator. It is perhaps a pity that the same organisation has been so inconsistent on the issue in the past, as its justified complaints today are hard to reconcile with its entirely contrasting position less than a decade ago.
Still, the Chamber is essentially correct. Under the present regime, it is practically impossible for smaller businesses to operate on a level playing field with their larger and more liquid competitors.
In fact, it is difficult to accept that such a blatantly unjust measure could have been taken by a party that had fought so hard for social justice in the past.
If the PN is finding it hard to reconcile its former values with today’s exigencies, perhaps it is time to go back to the drawing board.


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Horror for little shops

Anna Mallia
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