A bread and butter election | Claudio Grech

Increasingly politics is becoming void of ideology and equating more to which political outfit can deliver more cash in hand. The economic wheel is turning, but do we ever stop to think why? It is turning because we had the vision to build future-proof infrastructure, worked hard to ensure that our stability attracted foreigners to come to settle in Malta, to work in iGaming and other service industries or just to enjoy the safety and climate, or even to opt for Malta to use our financial services.

These people need to reside and live here and hence the demand for rented property, daily goods and restaurants. High demand for rents pushes the construction industry to make more property available, it keeps financial services firms busy with corporate structures and advisory services, the retail sector has more customers walking in and the many business activities involved in providing services for homes and entertainment see their numbers grow. This is the ‘miracle’ we all talk about: a ‘miracle’ which happened over the last two decades and which is reaping the peak of its benefits now.

An economy works like that. A terrorist attack in North Africa redirects tourists to Malta because we are safe. The exit of Britain from the EU gets business leaders from outside Europe to think of alternatives to London for their European head offices. Prosperity depends on the demand for services and Malta has prospered because the demand for tourism, financial services, settlement services and others has been consistent.  

Financial services are required when a foreign individual or company decides to set up a corporate structure in a jurisdiction which enjoys a good reputation, and has a competitive tax rate. Our reputation is somewhat dogged when we learn that our regulators may not be adhering to the soundest of compliance principles. Our competitive tax rate has been so far defended against moves for tax harmonisation by the EU, but our task to defend it has become Herculean pursuant to the recent developments. 

Nationalist governments were far from perfect. Nevertheless, together with stakeholders and providers of any political belief, they have carefully crafted a good reputation for Malta in financial services, iGaming, ICT and other service industries such as aviation. What these industries have in common is their dependence on our jurisdictional reputation and the fact that they are regulated by international bodies.

The events which have happened in Malta in the last year have been widely reported in the relevant circles in Europe, and these are relatively small professional communities in which a jurisdiction’s reputation can be put in doubt in weeks not years. Make no mistake that other jurisdictions are keen to compete for the business we manage to attract.

Punching well above our weight, we are obviously exposed to competitive assaults by other service-driven jurisdictions and if the current situation persists, our risk factor is increasing exponentially. Our competitive edge, and the very service offering we have in financial services and iGaming in particular, may well be under severe attack. Our competitors will step up their lobby to both push for further actions against Malta and to develop their own offerings. This is how things work in the international business in which Malta is just one player. 

As the demand slows down for our financial and other services, the concurrent demand for accommodation, food and entertainment dries up. The consequence is obvious, both for the thousands employed in these sectors, and for those who build apartments, furnish them, insure them, provide education, entertainment, health, and a host of other services. There is an undeniable link between the ‘doing well’ on a micro level, the property you rent and the services you sell, and the macro reality of the demand for our trust-based and regulated services.  

June 3 is a simple choice. It’s a choice for Malta. The PN has over the years built the sectors that are dominantly driving demand and economic growth today. The PN worked hard to develop its economic vision in Opposition and is now committing to prove itself once again by developing new high value added sectors on the basis of a solid reputation and smart regulation. If there was ever an election which is about bread and butter issues it is this one. 

We have the passion to shape the future and we shall do it through a radically new style of politics wherein governance, government and implementation will be a joint effort between all stakeholders.

Claudio Grech is standing as a Nationalist Party candidate on the first district