PN’s pre-budget document slams Panama Papers scandal for failure to attract Brexit relocations

PN says government’s poor handling of the Panama Papers scandal caused Malta to lose out on high-profile 'Brexodus' players

paul_cocks
Paul Cocks
29 September 2017, 3:08pm
Last updated on 29 September 2017, 3:26pm
This is the third pre-budget document drawn up by the PN opposition since 2013
This is the third pre-budget document drawn up by the PN opposition since 2013
The government’s poor handling of the Panama Papers scandal caused Malta to lose out on high-profile relocations by operators seeking a Brexit strategy from the United Kingdom’s financial services sector, opposition deputy leader for parliamentary affairs Mario De Marco said today.

De Marco, addressing the media at the Parliament building on the launch of the Opposition’s Pre-Budget Document, said that a number of high-profile operators had already signaled their intention to leave London once the UK leaves the European Union.

“But although Malta initially appeared to be in the running to attract some of these relocations including Lloyd's of London underwriter Hiscox Ltd, it eventually lost out to cities such as Dublin, Frankfurt and Luxembourg,” he said.

“The reasons for this are various including government’s poor handling of the Panama papers scandal which tarnished Malta’s reputation as a financial centre of high repute.”

De Marco was accompanied by Nationalist MPs Claudio Grech, Kristy Debono and Clyde Puli.

De Marco said Malta could still gain from some high profile relocations from online gaming companies and possibly aviation companies that are currently based in the UK.

“Government recently announced that it will be setting up a task force aimed at attracting businesses looking to relocate to Europe,” he said, adding this was in line with the Opposition’s proposal, included in the electoral programme, which called for the appointment of a “Brexit Envoy whose role would be to plan and mitigate any potential impacts on the local economy as a result of Brexit.

The pre-budget document also notes that for the past two years, the opposition had highlighted the problem of increasing poverty, which the government had initially refused to acknowledge. De Marco said that this problem was growing in magnitude even if statistics might point to the contrary.

“Prime Minister Joseph Muscat was elected in 2013 on the promise of creating a new middle class. What we are seeing is the creation of a new middle class poverty, primarily because of the steep increase in mortgage and rental prices,” he said. “The dividing line between the haves and have-nots in our society is becoming bolder. This situation needs to be tackled head-on.”

The PN’s documents states that GDP growth was camouflaging growing inequalities in Maltese society and a growing social and environmental deficit.

For the first time since 2008, the European Commission was forecasting economic growth across al EU states for the coming two years. The Commission was, however, predicting that inflation would also pick up in the same period, with core inflation in the overall Euro area expected to increase from 0.2% in 2016 to 1.4% in 2018.

De Marco said the opposition would continue to highlight the unbridled increase in public expenditure, underpinned by partisan rather than by national needs and to stress the need for transparency, good governance and accountability.

He said the opposition remained wary of the fact that the government had entered into long-term commitments, particularly in the health and energy sectors.

“The cost-benefit analysis of these commitments remain hidden from the taxpayer who ultimately is going to fund them,” he said.

The PN acknowledged that the number of gainfully-employed had increased in the past two years, while the number of people registering for work decreased, but questioned whether Maltese workers, particularly youths, were prepared to take on the opportunities that were being created by the Maltese economy.

The PN also highlighted the fact that, for the first time since 2005, the number of public sector employees exceeded the 45,000 mark in 2016.

“The number is set to increase even further during 2017 as government, contrary to practice and possibly in breach of General Election rules, employed hundreds of people in the run-up to the 2017 election,” the PN insisted.

It said that the increase in the public sector headcount was having an adverse effect on the private sector, with employers concerned about the exodus of employees from their companies to work in the public sector, often to be replaced with foreign workers.

“Government should make every effort to streamline its operations to free human resources to productive jobs in the private sector, possibly through natural wastage. There should be a level playing field in the labour market between the public and the private sector”.

Rental market 

Turning to rents in the local property market, De Marco insisted that at this point in time, the PN did not favour direct government rent control, adding that the appropriate course of action would be for government to continue subsidising rents for people most at risk, including single parents. 

He said one should also consider a proposal by the Malta Developers Association to review minimum thresholds for rent under the IIP scheme.   

Financial services

The PN said it supported government's commitment to consider the adoption of cryptocurrency and being a regional leader in blockchain adoption. It recommended the establishment of a FinTech Mibikisation Fund for the purpose of supporting private investment.

Retail

The opposition called on the government to seriously consider implementing the 51 proposals the PN had presented during the election campaign with regards to the retail sector, especially the fiscal incentives for small operators.

Tourism 

The PN confirmed its offer to work with the government to identify a sustainable plan for Air Malta's future. It said the airline needed to expand its operations to new destinations, particularly Spain, Northern France, Ireland and Scandinavia. 

The PN said that now that Air Malta was out of the EU restructuring plan, it should present a plan to government to help promote Malta as a tourist destination, in line with deals the government had secured with low cost airlines. 

Air Malta also needed to invest in cutting edge business ICT and should be in a position to restart the Libya routes once the political situation permits it. 

The PN said that Valletta being the European Capital of Culture in 2018 could have positive long-term impact on tourism, but a strategic plan needed to be drawn up between the Malta Tourism Authority and the V18 Foundation.

Industry and manufacturing

The PN called on the government to launch a thorough assessment of its industrial policy and recommended that Malta Enterprise analyse its programmes and incentives to focus on those measures which can attract global innovation.

Culture

The opposition called for greater investment in the cultural infrastructure particularly in a new national theatre, a museum for modern and contemporary art, an academy of fine art and an architecture and design centre. 

The PN also proposed starting a process to give each youth between 18 and 21 years old a one-time grant to be used to visit an EU country of their choice. 

It also recommended increasing the Malta Film Fund to €2 million.

Gozo

The PN urged the government to seriously consider the 100 proposals affecting Gozo that the opposition presented in its electoral manifesto.

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Paul Cocks joined MaltaToday after having spent years working in newspapers with The Times...