FEDEMAC’s Post

During the FACETS 2024 panel discussion, Mr. Mmetla Masire provided a thought-provoking perspective on the cost of traceability in the diamond industry, stating: "The cost of traceability is no longer a simple question of who should pay, as it has become an integral part of doing business. While we all value traceability for different reasons, the critical focus should be on its impact on the industry. If the costs become excessive, they could threaten the very foundation of the sector. Keeping these costs as low as possible is essential to ensure sustainability and long-term growth."

So, as I half-jokingly predicted in a recent conversation, the implementation of the UK Procurement Act 2023 has been delayed. 🙃 🛑 But hey, no complaints here! It gives us more time to prepare for the exciting changes ahead. According to the note I came across, the Government is focused on delivering greater value for money, boosting social value, and opening up procurement opportunities for small businesses and social enterprises. But, in true government style, the delay promises "greater value for money and improved social value." (Good things come to those who wait, right? 😄) Now, here’s where I get to say, "I called it!" The best part? My speculation about the National Procurement Policy Statement (NPPS) getting an overhaul is coming true! 🎯 Now, here’s my next bold prediction: the Social Value Model will also get a revamp, especially since PPN 06/20 (which defined it) was buried in the annex of the older NPPS. The future? Full of social value, economic growth, and more opportunities for small businesses and social enterprises. And hey, maybe we’ll even get a "mandatory chai break" clause thrown in for good measure! ☕😉 #Procurement #SocialValue #PolicyOverhaul #SmallBusiness #SocialEnterprise #uksocialvaluemodel #sroi #procurementact2023

The UK Sustainable Investment and Finance Association (UKSIF) urges the UK government to provide greater transparency on its decarbonisation strategy for the automotive industry. This clarity is essential for boosting investor confidence and preventing capital flight to more supportive markets like the US, which has successfully attracted significant investments through clear policies. Without consistent and transparent guidelines, the UK risks stalling progress in the transport sector's transition to net zero. Find out more here: https://bit.ly/3yyzPdM #UKSIF #NetZero #TransportSector #Decarbonisation

FIC White Book 2024: Progress in energy, digitization and financial services, but food sector lags behind https://lnkd.in/d4piWbnh

The implementation of the Recovery and Resilience Mechanism (MRR), the core element of the EU's recovery tool NextGenerationEU, is accelerating, boosting further progress on reforms and investment in Member States. It is expected that by the end of 2024, more than 300 billion euros will be paid from the MRR funds, according to a press release from the European Commission.... #Eurostat #MRR

Stated purpose of subsidies provided to the steel sector Figure illustrates a strong prevalence of subsidies whose purpose is for capacity extension, new investment, and capital equipment (40%), technological development and research, including some projects related to protecting the environment (28%) and environment, such as the physical installation of CO2 filters, etc. (13%). Raw materials, land and energy (8%), export support (6%) and social (5%) only account for smaller shares of the declared purposes. Figure below highlights a number of salient facts on the intended purposes of specific subsidies received by steel firms across economies. First, purposes such as “capacity extension”, “new investment”, and “capital equipment”, when lumped together, appear to be prevalent reasons mentioned in the data collected (40%). This could reflect the decision of some policymakers to develop their domestic steel markets without taking into account the challenging issue of excess capacity that the steel market is experiencing. Although some of those purposes are not flagged as “export support”, in some instances there is anecdotal evidence that export is the focus and justification for upgrading and upscaling the domestic steel industry. Scaling up the domestic base would in any case lead both to export substitution and an increase in net steel products’ exports. Some purposes of the category such as “transformation” and “capital equipment” could be a replacement of older assets, whose expected effects should thus not be an increase in the total steel production capacity of the recipient’s firms. Second, although environment purposes such as energy-efficiency related upgrades of steel plants and the installation of air filters or water saving devices, are frequently mentioned, environmental purposes are far from being the dominant ones. Both capacity extension and other related purposes and the research and technology purpose are mentioned much more often. Because environment and greening seem more justifiable, due to the societal challenge they are thought to address, than other types of purposes such as capacity extension, they figure more prominently in media, companies’ websites and digital platforms. Yet, systematic data collection shows that the purpose only accounts for 13% of all purposes stated in the data collected. Third, subsidies for social reasons seem to have a much reduced part of the total of intended purposes stated. Admittedly, social cohesion and workforce re-training can be supported by subsidies not going through steel firms’ accounts and thus not represented here. Fourth, “export” is mentioned in a significant share of the purpose stated (6%), which seems to confirm the idea that subsidies are provided with an export-oriented view in some cases.... Source: OECD

The government's industrial strategy green paper has started to define its sector focus. Smartly, it will be refined further thru analysis. For now, it's not obvious that all the "growth-driving" sectors are in fact that (and of course no-one has a crystal ball). #dataisbeautiful The green paper lists 8 broad sectors as its starting point: advanced manufacturing, clean energy, creative industries, defence, digital and technology, financial services, life sciences, and professional and business services. While more detail will no doubt emerge, I've had a go at guessing which sub-sectors might belong to these, to see how they match up with the UK's historical and recent economic performance. While the sectors listed (red in chart below) are generally those with high growth rates (both since 1997, 2010, and 2019), there are also some interesting questions that emerge: 1. The broad sectors cover 28% of UK's GVA. Is this targeted enough? And what policies will drive growth in the rest of the economy? 2. There are a couple of fast growing sub-sectors that might or might not be included in the current definitions. Is waste handling part of "clean energy"? Are admin and support services part of "professional and business services"? Where does education fit in? 3. Some of the "growth-driving" sectors used to be really strong but have in fact not done so great since the financial crisis or the COVID-19 pandemic. Examples include electronics, TV and film production, broadcasting and publishing, arts and entertainment, and financial services (excl. insurance and pensions). There may be still very good reasons for prioritising them (e.g., export strength), but those choices will need to be made explicit. 4. How will the government assess future, rather than past, likely growth and potential? Obviously, I've only looked at GVA growth here, and the government will look at lots of other metrics, too. Nevertheless, by definition, we cannot have any evidence about the future. Engaging industry experts (who don't have self-interested motives) will be key to getting to objective views about where interventions will bring the best bang for buck.

The #UnionBudget2024 announced several significant initiatives aimed at boosting the manufacturing sector. It addressed critical areas such as infrastructure development, technological advancement, and sustainability. Here are the top takeaways and their potential impact on the manufacturing industry:   Boost for Industrial Infrastructure: The budget is allocating significant funds to modernize industrial corridors, create new manufacturing hubs, and improve road, rail, and port connectivity. Additionally, the government is establishing multi-modal logistics parks across the country to integrate road, rail, and waterways, reducing transportation time and costs for the manufacturing sector.   Advanced Manufacturing Tech: The budget champions automation, robotics, and AI to ensure top-notch quality. Extra R&D funding fuels innovation. The goal? Boost efficiency, elevate product quality, and enable instant decision-making.   Green Manufacturing Incentives: India is investing in renewable energy, energy-efficient tech, and cutting waste, balancing growth with keeping the planet in good shape. Plus, the government is pushing for a circular economy. Policies and incentives will back this up.   Credit Guarantee Expansion: MSMEs can now secure loans for machinery and equipment without the hassle of collateral. On top of that, the govt. is introducing fresh tax breaks, including lower corporate tax rates and simpler compliance for MSMEs. There's a new one-stop digital portal to easily tap into government schemes and services. Simple, effective, and direct.   Boosting Skill Development: More investments for upskilling in hot sectors like AI, renewable energy, and advanced manufacturing. The government is rolling out EPFO schemes to help first-time employees get into the formal workforce and close that skills gap.   The Union Budget 2024 lays a comprehensive foundation for boosting the manufacturing sector by addressing key areas such as infrastructure development, technological advancement, sustainability, financial support for MSMEs, and skill development.   Effective implementation and continuous monitoring will be crucial to realise these goals.

💡 ECOFIN (Economic and Financial Affairs Council) approved the VAT in the Digital Age (ViDA) package! Long story short: ◙ Timelines ViDA ‣‣‣ January 2025: Derogation requirement for e-invoicing abolished. ☆ Member states are allowed to impose domestic transaction e-invoicing schemes without prior Directive derogation approval of the EC ‣‣‣ January 2027: Modification to the €10,000 B2C distance selling goods and TBE services threshold. ‣‣‣ July 2028: Single VAT registration. ☆ Announced extension of the OSS return to e-commerce and own stock movements across EU borders. This will enable e-commerce sellers and B2B businesses to cut their foreign VAT registrations. ‣‣‣ January 2030: Pillar 2 - Platform Economy. ☆ Short-term accommodation rental and passenger transport platforms will become the deemed supplier for VAT purposes. Therefore, they will charge and collect VAT on behalf of the supplier. ‣‣‣ July 2030 Pillar 1 - Mandatory Digital Reporting and e-invoicing ☆ Introduction of Digital Reporting Requirements (DRR) for suppliers and customers  ☆ Each Member State will be able to develop their own reporting protocols and technical specifications ‣‣‣ July 2030: pre-2024 existing national e-invoicing will need to harmonize with EU standards https://lnkd.in/dayBSsjP