[WATCH] Taxpayers do not want to fund political parties, finance minister claims

Edward Scicluna sounds warning to firms who advise clients on how to minimise their tax exposure: 'You are damaging your own reputation'  

tim_diacono
Tim Diacono
9 March 2017, 10:30pm
'Taxpayers will resist the state financing of political parties' - Edward Scicluna
'Taxpayers will resist the state financing of political parties' - Edward Scicluna
Finance minister Edward Scicluna showed clear skepticism when asked about the Opposition’s proposal that the state finance political parties, claiming that such a move would be met with resistance by taxpayers.

Speaking on tonight’s edition of Xtra, Scicluna coyly suggested that he would personally have no problem with introducing a system similar to Germany’s whereby the state funds political parties according to how many votes they gain.

However, he soon warned that: “I don’t think that taxpayers would agree paying political parties out of their own taxes”.

Opposition leader Simon Busuttil recently reiterated that he is in favour of the state financing of parties, moments after he appointed an independent commission to propose changes in the way political parties and politicians are financed.

On Xtra, Opposition MP Kristy Debono noted that the majority of NGOs in Malta are already directly funded by the government by some way or other.

“What taxpayers don’t accept is [Labour CEO] Gino Cauchi stating that his party only received €600,000 in donations last year but failing to mention the €10 million it earned from the sale of Australia Hall and the 30 illegally-built party clubs that a Labour government had regularised.

“Taxpayers would rather pay political parties from their taxes, but then have their minds at rest that the parties have adopted a zero tolerance on cases like Australia Hall.”

In a recorded interview, Gino Cauchi said that Labour only accepts donations on condition that donors don’t expect their money to condition the party in any way and that they are carried out under the legal paramaters.

He said that Simon Busuttil’s pledge for good governance and transparency has taken a beating following unverified allegations that he had personally requested hotelier Silvio Debono to pay the monthly salaries of his CEO and secretary-general.

In a separate interview, the PN’s treasurer Alex Perici Calascione reiterated that he has no information to corroborate Debono’s allegations, and that the onus was on the hotelier to substantiate them.

Edward Scicluna and Kristy Debono were the guests on tonight's edition of Xtra. Photo: James Bianchi
Edward Scicluna and Kristy Debono were the guests on tonight's edition of Xtra. Photo: James Bianchi
“I don’t know whether Debono thought that, by paying the PN and MediaLink , it would ensure that the party wouldn’t criticise the dubious sale of the ITS to him,” he said. “Busuttil’s stand against the project proves that he is in nobody’s pocket and that no donations will compromise his sense of political justice.”

The treasurer admitted that it is a daily strain on the party to constantly rely on donations to upkeep its operations, which is why state funding should be introduced.

‘Minimising tax exposure will not be tolerated forever’

Edward Scicluna notably sounded a warning of doom and gloom to auditing and accounting firms who employ tax experts who consult their clients on how best to minimize their tax exposure by setting up structures across the world.

“A time will come when these firms will realize that such practices are damaging their own reputation,” he said. “If they don’t stop giving this advice to their clients themselves, then laws will be introduced to stop them from doing so.”

He claimed that corruption in Malta has plummeted over the last 30 years and that social media has led to an increased public awareness on it. The key problem of the Panama Papers scandal, he argued, was that Panama doesn’t cooperate with Exchange of Information laws.

Debono described the Panama Papers, which revealed that minister Konrad Mizzi and OPM chief of staff own offshore companies in Panama, as a “black spot” on the local financial services sector.

However, she dismissed any sort of moral concerns against legal methods through which people minimize their tax exposure.

“So long as financial professionals use legal methods to guide their clients towards legal methods of tax avoidance, then the PN doesn’t have a problem at all,” she said. “Our problem is that Mizzi and Schembri and someone else [the UBO of Egrant] opened companies in Panama, in which they planned to deposit €1 million a year.”