www.independent.com.mt
28 May 2017
FOUR YEARS OF
WITHIN TH
BUDGETS FOR GROWTH INNOVATIVE FACTOR ABOUT THESE BUDGETS WAS TO TURN THEM FROM MERELY AN ACCOUNTING EXERCISE INTO AN ECONOMIC ONE. THEY CONTAINED VARIOUS STRUCTURAL REFORMS WHOSE ULTIMATE OBJECTIVE WAS TO ENHANCE GROWTH, REDUCE POVERTY, INCREASE LABOUR FORCE PARTICIPATION, ESPECIALLY AMONG WOMEN, WHILE AT THE SAME TIME REDUCING THE FISCAL DEFICIT AND DEBT YEAR BY YEAR. ll.i Jessie J, wi rs. he amongst ot ll be filmed and edwi ow sh e ial that Th -minute spec ited into a 60dcast across 20 MTV oa br be ll rope. As wi roughout Eu channels th extensive integrated an of rt pa
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Persons in severe poverty reduced by half
Fiscal deficits turned into a surplus persons
% of GDP
45,000
2.0 1.0
1.0
40,000 35,000
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25,000
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ased by ber of vis 24 has incre unt for the age of co d now ac 120.9% an urists. to 19.9% of all
15,000
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ccounting a s t’ n e m n r try nt of gove Developmeriority – Finance Minaltisa has embarked onlladrveasrytiM oject that wi ambitious pr tionise the current system a p rnby aclly revolu
2012
0
2013
2014
2015
2013
2016
Effective defined as added to th ral and oth riod 2004 abstractio by 35.4%, in 2004 to 2014.
MINISTERIAL ACCOMPLISHMENTS
Waste Waste g ety’s pro ca ented gove e lem th pp tion pat of su t en m m cash syste ting templates, to an The develop unting system is a loss of crual accoun d public sector acment’s acco real priority of this sources se ba the In on accrualsd se current and n, Finance Minister ba in time, stem tio Sector counting sy said yesblic administra a Pu un eration icl l Sc . na S) rd (IPSA ternatio s rd Prof. Edwa da an creased St Accounting unting, and in parterday. er governop year ov pr co r ac fo l ns e tra crua the nc Ac on ha The need en en ll be s wi mainly S, ting ha ticular IPSA accountability and ment accoun da for many years, non-h d an th y en bo ing, parenc ak m national ag t. nio tion of cis ou improve de r economic prosperhe pointed at in the past, howby 48 fo s ic bl ea th t ar key hen pu gt mewha He said so en s str serve ll wa ress ity. They wi agement and will ever, prog ntrast, the current an m co na e ce e In finan ess th ct on th dr pa limited. ad im e ely iv activ have a posit ion with credit ratthrust is to parallel to developtat tion’s repu issue, also in place at a European s. g ing agencie Project will involve ments takin ted that support for S SA IP no e is business Th ction re level. He di is th eering of all in t the re-engin vision of policies, a developmen across the political re s, se s es ou oc islation, pr unanim view of leg hou cted rfora base of t PN gover by metal pe lift and solar panels thorough re t of new skills and ere spectrum. una was delivering e serve as the Successive to have the bridge Thich A en pm d ance wh icl lo screening. installed. th Sc ve e . 15 de e. Prof had promise project never materivate dg n of th fin in- bri at the A c-p be s tio ilt (A bli o es sa bu pu als dr ni s a ll ad ga the wa is wi the reor t, the m built but el bypass er since, The project e footbridge will the plenary erence of the Comtak The Mrieħ governmen nf function in ed. He said that the paInrtnership. oThsteel structures on in the early 1990s andhaevve com- rialised. Biennial Co ternational Governm sist of tw d rising fro i residents ister observ elf is presently un- con roa rm Qo parative In counting Research the of e d AA aroun her sid Treasury its structuring of its eitFr are base of mental Ac IGAR), a network of re t a concrete squ dergoing tablishmen Network (C a mission to prop with the es entrusted ns th tio wi d s nc an fu lar n sio scho st icluna ecifically wide discus Edward Sc of a unit sp ting methodology mote world comparative governu ent and Acwith accoun l reporting funcresearch on ting. The two-day ics, Managem iversity of om on cia Ec an ng un fin di Un rhea the and ea of sp e ment acco with ‘Making govcy is th it tan d at un g coun , tions. This setting process. is convenin conference counting research d Malta and Valletta campus. ac the standar e-oritic y’s ac ernmental at sit pr th er A iv ed t: Un y er ea s Sh or er m de bt cy lia bi lit as m adis d da as es a reexplain re gi e dreinlevrean e. In th e un we orre icltaunwe mste y pe rta in a cu r. tSc th e asre aalsthemthe,is of las by €1 5.4 se cu rit ies de cr ea tProf Cuoa in g rrech Ce nt qu ar in co mted pr nt’ tax es ono culty ye ar , th se Go ve rn m to en e anap d we alt am ou nt ed ra l es e ad ju ter of e Fa tri gg er Sh or t-t er m ill io n. M or eo ve d lio n) en t, (€ 16th stm en ts to €7 2.8 m lo an ed an r, .6 m ilNegt hostedh by ris be, in
THE BUDGETARY OFFICE, THE TREASURY, REVENUE, CUSTOMS, AND CONTRACTS DEPARTMENTS HAVE ALL UNDERGONE SIGNIFICANT CHANGES TO ENHANCE THEIR A baEFFICIENCY AND PRODUCE RESULTS.
in cr ea se s we nt do by €7 .9 m ill io n to re ce iv ab le so cia l co nt rib ut io of €5 0.6 m wn ns ter m lo an ill io n wh ile Lo (€ 6.8 Co ns ol id th e su rp lu s of an d Cu rre ng m ill io ate th e m ill ion . Cus in cr ea se d by €2 Du rin g th d Fu nd . ab le (€ 4.2 nt tra ns fe rs re ce n) e fo ur th qu iv m in cr ea se d rre nc y an d de po .7 re lat io n To ta l ex pe ill io n) . ar ter , sit s by to To ta l Ge €2 .0 m ill io n. tio ns in as fin an cia l tra ns in qu ar ter am nd itu re in th e ac las t ou nt ed to de bt ou tst ne ra l Go ve rn m re ce iv ab le se ts, Ot he r ac co un en €1 ,02 7.8 ts re gi ste De ce m be an di ng at th e en d t cr ea se of r in cr ea se €7 3.6 m ill re d a de m ill io n ov d by €1 44 of ion ov er th e of 20 15 . er th e fo ur th qu ar .4 Ge ne ra l Go ve rn m ter en t
m ill io n, e of €4 a eu ro co in .3 m ill io n ov er th en d of Desto ck re co rd ed at e th e ce m be r 20 15 . di tio n, th In ad e de bt sto od Lo ca l Go ve rn m en t Th e Go ve at €3 .8 m ill io n. de bt am ou rn m en t gu ar an tee f lio n at th nt ed to €1 ,39 9.3 m d e ilen d of De ce 3 20 16 , a de m be p wh en co cr ea se of €4 .9 m ill r m io M pe rio d las pa re d to th e sa n me t ye ar . sl In 2016, th A registered e general governme of penditure lion, equi a surplus of €101.0 mint in va general go (€3,770.2 million) The gros lent to 1% of GD lve of ad Maastrich When me rnment. amounted s consolidated de P. t debt criter asu fo c to bt red as a perce ia to 58.3% of GDP, the 58.3% of GD €5,766.5 million nta . nom receives 70 2016 da balance wa general governmege tistics Offic P, the National Staor ta “W butions un per cent of the cont e In order to plus of 1% s equivalent to a sunt Net lendin said. de rithro vestor Prog r the Individual Governme arrive at the Gene improvem , showing a significa reral go g (or surplus) of ge re ite ve surplus of ramme, registeringIn2016, adjus nt Sector’s surplus ral 1.3% in 20 ent from a deficit nt amounted rnment for 20 n€1 a 15 of in g In addition 63.5 million. balance of tments are made to for On the ba . lion, shift to around €101.0 mi16 , the the an oth Go no ck ing from er positive justment t vernment’ lof stock flo solidated justments, €119.3 mi ad inc s co fu w ad fre ez llion recora deficit of justed ca ludes the time-a a surplus nd, which registerenment nomi the general gove discovprevious sh transac ded in th dd rn pe ns Customs Department while ye million). major posit of €8.9 million. debt increanal gross consolida as the di ar. This is calculat e On the oth tions (€4.8 The aine The ive adjustm ted se re fference be d pe ed ma er by a d over 300kg of coc posedly ne in ha €1 t negative ad to €5,766.5 nd, the lending (or ent is the 44.4 millio revenue (€3 tw ere sup r ne ca jus tai n ov su lli co ,871.3 millio een total tm rp er con n nsolidated by Extra lus) recorde en 2016, howe the due to hig pecting a n) and exfund inclu ts to the ve pineapple at nancins ‘other ac ia €179.2 millioBudgetary Units d ded th debt-to-GDher level in GDP, r ning cans of co th P ratio fel Ex plcontai Freeport. payable’ (€3 unts receivable an e setting up n, particularly by of l below th e tranthe pe nd itMalta e which was way ury cleara 3.5 million), the tre d r, opment anof the National De ne tai con nc veld Social Fu on its sa id th The and the eq e fund (€24.4 millioasnd, which ough Malta s uity injectio n) pe nd itsiting thr dor to Spain, wa tional air ua k carrier (€1 n to the naye ar s wfrom Ec a potential high ris 2.0 million) as ed . alysis gg ence in fla ing risk an ent. low fol r ne partm contai by the de performed
Governm ent registe rs
39,000
1% GDP s urplus in 2016
Unemplo Minister C JobsPlus ana revea 2,730 per tered fo Malta’s h Both D ana ex rity pu a ing biggest ed follow firm . con ing be igh to unprece d accurate we analysis an icials requested the is to en Customs off the Police Departforce ha of assistance ormed the duty magjob opp inf d ms an sto nt me e. Both Cu Decoming cas the of istrate Police the d In the an t Departmen continuing their ining nu partment are and the contents of have b ns, intio ga ing sti be ve in ord now also the cans are spected.
ine seized a c o c f o g k Over 300 Customs in Malta’s by Malteser narcotics haul largest eve on, Cuscal inspecti Upon physi uncovered six large ls toms officia ning several hold-all kg of a sacks contai ng over 300 bags carryi nce, which following white substa lds test conducted by fie tics a positive a narco icials, gave Customs off cocaine. indication for d that the find has a It is estimate tens of millions of of street value r, such value is still ve euro, howe
y ing out emp had h Malta has n E thi figures wi fema amount of wor pated in the ern where West to e ageing du d longer couple r ild ing less ch t ord cannot aff s pable adult g work on a lar il The free ch pa praised in rig women the labour force,2 that prior to a me nt ernme 18 fect), only e children ag e fre a of e us Now that so state-spon families w k age are ma care, maki and feasib force.
2016
ACHIEVEMENTS
HE MINISTRY FOR FINANCE PROMOTING FINANCIAL SERVICES FINANCE IS THE LIFEBLOOD OF THE COUNTRY. THE MINISTRY FOR FINANCE HAS GIVEN ITS SUPPORT TO VARIOUS INITIATIVES BY FINANCIAL PRACTITIONERS, FINANCIAL INSTITUTIONS, AND FINANCIAL REGULATORY AUTHORITIES OVER THE LAST FOUR YEARS.
REPRESENTING MALTA ABROAD DEFENDING OUR COUNTRY’S GOOD REPUTATION
ACTIVELY PARTICIPATING IN BOTH EUROGROUP AND THE ECONOMIC AND FINANCIAL AFFAIRS COUNCIL OF THE EU (ECOFIN), INCLUDING PRESIDING OVER ECOFIN DURING THE FIRST HALF OF 2017. PARTICIPATING IN THE INTERNATIONAL MONETARY FUND, WORLD BANK GROUP, ORGANISATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD) AND G20 MEETINGS.
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MAY 2017
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Highlights of the e Below are 12 issues that have characterised the election campaign so far. Compiled by Stephen Calleja
PANA Committee and EP
Magisterial inquiries
Prime Minister Joseph Muscat was summoned to appear before the PANA committee in the first week of the campaign, compounding an already complicated position for Muscat who was forced to call an early election because of mounting allegations regarding the Panama Papers. The PANA committee is a European Parliament body investigating Money Laundering, Tax Avoidance and Tax Evasion. To have a Prime Minister of a country called to testify before a European Parliament committee investigating corruption is not something Muscat can be proud of. He has opted to dismiss the summons, postponing his testimony until after the Egrant investigation is completed. The suspicions can only grow. He blamed the PN was instigating PANA to push the PM for answers. A request by the Green Party to summon an urgent plenary session of the European Parliament to discuss the situation in Malta was accepted, but the debate will be held after the election, on 12 June.
Two magisterial inquiries were ordered against Keith Schembri since the election campaign started. Magistrate Aaron Bugeja ruled that enough evidence was produced by Opposition Leader Simon Busuttil on two occasions to open two investigations on the OPM chief of staff. The first was about kickbacks allegedly received by Schembri from Nexia BT director Brian Tonna from the sale of passports, and the second was about payments made by Schembri to former Times director Adrian Hillman. Magistrate Natasha Galea Sciberras was appointed to take over the first inquiry while Magistrate Josette Demicoli was appointed for the second. Schembri still holds his position. PM Muscat said that Schembri will resign if the inquiries prove some wrongdoing. He has not said if he will retain him if reelected to government. So now we have three ongoing magisterial inquiries, including the one on Egrant, a company that, it is alleged, has Michelle Muscat as the ultimate beneficiary owner.
Mass meetings What is it that matters the most in mass meetings? What is said, or how it is said? Joseph Muscat appeared militant, almost angry in his approach, in all his mass meetings. He raised his voice at the opportune time, often verging on the hysterical. Simon Busuttil was quieter, and does not hold his audience in the same way that Muscat did. But, again, what counts? The substance or the delivery? And this is where Simon Busuttil did better. If body language tells us something, what we witnessed so far is a Prime Minister who is feeling the heat of the moment and expresses himself in an aggressive, rather angry way, and an Opposition Leader who may not engage with the crowd as much as his political adversary but who is growing in confidence. Maybe it’s because the more recent developments have put more pressure on Joseph Muscat, who has had to defend corruption allegations and his decision to keep Keith Schembri and Konrad Mizzi by his side. He said that he kept Keith Schembri and Konrad Mizzi because they were responsible for special projects. Then again, the people who do not attend mass meetings, the floating voters, are the ones who will decide an election.
Malta Files The 19th day of the election campaign will go down in history as one that exposed how Malta’s wellbeing could be rocked, shaken and threatened in one single swoop. The Malta Files that were uploaded overnight across several European newspapers, including one in Malta, showed how what Malta has painstakingly built over many years could be attacked and negatively hit, literally overnight.
Konrad Mizzi Before the 2013 election, he was Labour’s face. He appeared in every news conference to explain what a Labour government would be doing in the energy sector, saying that he was sure a new power station would be up and running within two years. Today we know that it took double that time, and what eyesore we have right in the middle of the bay in Marsaxlokk. We did not know at the time that his wife would have been employed and paid from our taxes to the tune of €13,000 a month. This time round, Konrad Mizzi has hardly been seen. Most ministers and MPs and many candidates were present for the morning press conference throughout the campaign, but Konrad Mizzi was not one of them. He has attended some evening activities, but was kept away from journalists. Has he been told to stay out of sight, given that he is the face of the Panama Papers scandal? Has Labour kept him hidden? Has he become an embarrassment?
Malta’s reputation
Voting documents At the start of the second week Nationalist Party deputy leader Beppe Fenech Adami expressed serious doubts about voting documents. He said that the ink used in the printing of the voting documents can be scrubbed off even by a finger-nail. He said this happened because the plastic lamination machines owned by the Electoral Commission were not functioning properly and a new procedure was used. The issue seems to have fizzled out since then. The PN has not mentioned it further. It could be that their nerves have been settled. Or that they created a mountain out of a mole-hill.
The publication of the files, in the words of Prime Minister Joseph Muscat, was an “unprecedented attack”, although not a surprising one. The financial services sector is a main pillar of our economy and employs thousands, and it is no wonder that there is great concern about the seriousness of the matter. The PM was correct to call for a united front to face an uphill road towards recovery. Luckily, both sides of the political fence are on the same page in their determination to protect Malta’s interests. It is rather ironic that while the PM showed so much preoccupation after the Malta Files stories, he did not show the same concern when the much bigger Panama Papers scandal broke more than a year ago, an occurrence that snowballed into the crisis we are facing today which led to the calling of a snap election.
Godfrey Farrugia Godfrey Farrugia - who served as Health Minister for a year and who chose to resign his position as Labour whip on the eve of the announcement of the election date - completed the switch to the other side. In a first letter when he resigned from party whip, he said that he no longer felt comfortable in a Labour Party mired in corruption scandals and without a socialist heart. In the second letter Farrugia said the Labour Party has lost its soul. Powerful words coming from the heart of a man who worked closely with Muscat, but who could no longer withstand the PM’s low standards. The shift was complete, with Farrugia joined his partner Marlene Farrugia, leader of the Democratic Party, who had herself crossed over to the other side when she resigned in November 2015. There were emotional scenes at the Nationalist Party headquarters, when the Farrugia couple walked in and Godfrey could not hold back when his PN counterpart for many months, whip David Agius, embraced him like a brother.
Malta’s reputation on the international stage had its ups and downs in the last four years. The holding of the summit on migration which was followed up by the Commonwealth Heads of Government meeting in late 2015 were two feathers in this government’s cap. Both happened since the eruption of the Panama Papers scandal and all that followed, and it must be said that matters have drastically changed since then. Malta was the only European member state to have a serving minister named in the Panama Papers. What’s more, there was the OPM chief of staff too. And now there are allegations that the PM’s wife is the owner of a third company that was set up in Panama soon after the 2013 election. Joseph Muscat continues to defend the indefensible. To say that Konrad Mizzi has paid the political price for his poor judgment is incomprehensible. What price did he pay? He stayed on as minister with the same conditions and perks; just losing his title when he is doing the same work as before is no punishment at all. And what price did Keith Schembri pay? Nothing at all, and yet he refrains from appearing in the media to face questions. Very much like Konrad Mizzi is doing. Malta’s presidency of the European Union was also a high for this government – but only for the first few weeks. As February moved into March the rum-
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MAY 2017
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election campaign
blings of an early election quickly put out any interest in such a historic moment for Malta. Having the PANA committee here in Malta during the presidency is not something that should make any government proud. Nobody speaks about the EU presidency anymore, although Malta is technically still head of the European Council.
The €2.3 million underground system
One of the PN’s pledges is to build a €2.3 billion underground system to improve the transport system and reduce cars from the roads. It is something that few believe will happen, given the magnitude of the project. One also wonders whether the system will be sustainable, given the costs involved and the relatively low numbers of people who live in Malta or visit. Abroad, such systems are sustainable because millions use the underground; here in Malta, with a population of less than half a million, questions rise as to whether such a project will work out.
The underdog Joseph Muscat continues to play the underdog card. He seems to have an obsession with it. But, just as much as he was playing things down in 2013 – when it was clear to even the most ignorant that Labour were going to win – he is wrong now. He started the race with a 36,000 advantage, and that is a comfortable lead. Added to this, he continues to enjoy more support in all the surveys that have been carried out so far. So one really wonders what he has in mind when he says that he is the underdog. Muscat may score points in this regard with people who just listen to him. But he is certainly alienating those who understand what he is saying.
The Russia connection The story of the campaign is the Prime Minister’s statement that he received information from two allied secret service agencies that Russia was behind the Egrant story. The Russian embassy denied any inter-
vention, but not before the story had spread like wildfire with Muscat being ridiculed for suggesting such an involvement. Apart from possibly leading to a diplomatic incident and exposing supposedly secret intelligence, Muscat came across as someone clutching at the last straw to try to defend himself. Muscat repeated the story over and over again when pressed by journalists, but never said whether he believed it or not. Holes in the story became bigger and bigger, as the timeline did not match. Muscat said that the information received was that the Russian whistleblower was a spy and that the Egrant story was created to pay him back for not allowing a Russian ship to refuel in Malta on its way to Syria and because the Maltese EU presidency worked hard on a visa waiver programme for Ukraine. But, as many were quick to point out, the Russian whistleblower worked at Pilatus Bank long before these two incidents occurred.
Avoiding the media Muscat has chosen to stay away from the media as much as possible. Although
he is available, almost every morning, to present Labour’s proposals in different sector, and takes questions on any subject, he has rejected several invitations. He almost avoided the traditional leaders’ debate at the University, saying that the first date chosen coincided with government duties. It was only when a new date was found that he, almost reluctantly, attended. And he did not appear comfortable at all, and was exposed by AD leader Arnold Cassola as having been taking messages from his chief of communications Kurt Farrugia on what to say all throughout the debate. Muscat also was the first prime minister to send someone in his stead for the only press conference he was invited to by the Broadcasting Authority. He did accept two invitations from Reno Bugeja and Saviour Balzan for two PBS appearances – apparently he feels comfortable enough in their presence – but has rejected invitations for interviews from other independent media, including The Malta Independent for its online programme INDEPTH, and turned down an offer for a leaders’ debate that was planned by The Malta Independent, Times of Malta and MaltaToday.
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MAY 2017
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No landslide victory for either party expected Over the past four weeks The Malta Independent has been providing its readers with a weekly scientific survey commissioned to Business Leaders, a leading company specialising in polls and scientific data. The iSurvey started in The Malta Independent in 2014 on a quarterly basis and switched to a weekly survey the week before Prime Minister Joseph Muscat called a snap election for 3 June. The process of collecting and processing data in a scientific manner is very laborious and requires ample resources. The iSurvey generally gathers, on average, a population of 600 respondents, which many times requires triple that amount of telephone calls if not more. For accuracy’s sake, it encompasses both landline and mobile numbers for it to be as representative to society as much as possible.
Does the iSurvey give a clear picture? Like all scientific surveys the methodology applied is crucial to get help pollsters get as close to the actual result as possible. However, over the past years we have come to witness global polls failing to predict what people actually do when they’re alone in the voting booth. What are the reasons behind such inaccuracies? The basic problem with surveys arises when a significant chunk of your population refuses to participate, declares it is undecided or simply lies on their voting intentions for personal reasons. While pollsters have developed methods on how to deal with those who refuse to participate and those who declare to be undecided, the later is a nightmare as it skews the data to one side or the other. When the amount of people lying is low, pollsters have a way of weighting a survey. This is done by comparing the replies of respondents on how they voted in the past election to the actual result of that election. If it is found that people declare in a survey to have voted a party more or less than the actual electoral result than the pollsters need to adjust the weighting of the survey to reflect that of the election. This helps to give an accurate picture of the situation, however, it reduces the efficiency of the survey and widens the margin of error.
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When as many people, or more, than those responding to the survey refuse to participate coupled with those who give a false reply on their intentions, the exercise in weighting does not give a clear picture. When this happens, pollsters advise to ignore the findings and look within the cross-referenced data to extract other useful information. The iSurvey has given a clear picture of the political status since its inception back in 2014. When compared to other surveys such as those published by MaltaToday, the iSurvey has a high level of credibility. However, during the past four weeks the data has been skewed and weighted and it is clear that many respondents are not divulging their true intentions, neither on how they voted in 2013 nor on how they intend to vote on 3 June. This doesn’t mean that the exercise is not worth analysing so as to extract other information relevant to what the pollsters want to discover.
What have we found throughout the campaign? The biggest revelation in the iSurvey throughout the campaign was the mistrust people have in polls. Week after
week, the skew in each wave was becoming increasingly noticeable. The amount of people reached by mobile and landline to reach a sample of 500+ respondents was multiplying each week. One clear picture came out: too many people are refusing to say how they intend to vote. When analysing the swing from one party to the other, or what is commonly referred to as the switchers, one finds that the swing from PN to PL was growing each week. This is hardly credible for many reasons outside the survey because as journalists our job is to analyse the public sentiment. We do this in several ways including a daily snap shot of how people are engaging on social media. But for this exercise we prefer to stick to those reasons that are identifiable within the survey itself. For example, when cross-referencing the trust rate received by the leader of the Opposition with the voting intentions of switchers, the numbers don’t add up. So, for example, people would rate Simon Busuttil over Joseph Muscat but than would say they will vote the PL on 3 June. It is these types of inconsistencies in respondents’ replies that indicate that too many people are skewing the data.
How did they fare? As regards the two main leaders, Joseph Muscat has retained the trust rat-
ing, losing only 1 point throughout the campaign while Simon Busuttil increased his trust rate just below 2 points. He however remained less trusted than Joseph Muscat. One would argue that if the survey results for ‘how will you vote in June 3rd’ are skewed than so are the trust ratings, but a thorough analysis of the data keeps showing consistency between the trust rating and how respondents claimed to have voted in 2013 while the voting intentions for June 3rd swings to the other side. Throughout the election campaign the iSurvey sought to identify other information traits such as those pertaining to which issues are pressing on people’s minds. Corruption resulted to be the top concerning issue for respondents. Yet again, another indicator that people tend to lie when declaring their intentions on how they will vote on 3 June otherwise how can one explain that they are worried on corruption but prefer voting in the PL which is the only party facing corruption allegations on its top three officials?
Who will win the next election? If we take the latest surveys at face value without challenging the skew evident in the survey, the PL will be winning again by a landslide. But when factoring the skew and how the leaders fare in their trust rate barometer it is clear that neither party will be claiming a landslide victory. The prediction is that whoever wins will be doing so by a small margin when compared to what happened in 2013.
FOUR YEARS of
ACHIEVEMENTS Tourism is the main driver of the local economy and, in recent years this industry has continued to grow also thanks to the creation of new economic sectors that rely on tourism. During this legislature, tourism has experience unprecedented and record growth. Amongst the achievements, we must mention:
by the Ministry for Tourism Edward Zammit Lewis
Two million tourist arrivals and an increase of 37% or half a million tourists compared to 4 years ago only, that is more than the entire population of Malta and Gozo. In just four years, we have also managed to overcome the challenge of seasonality, that is, the gap in arrivals between the peak summer months and the traditionally slower months of winter. This problem, that was afflicting the industry, is now something of the past. In 2016 total tourist expenditure amounted to 1.7 billion. This resulted in an additional 382.5 million more than 2012, a direct injection into the local economy meaning an increase of nearly 30%. During 2016, Malta witnessed an average growth in tourist arrivals of 10.5%, well above the the average for Europe and the Mediterranean region that was only of 1.4%. The reduction in utility bills for the accommodation sector led to increased investment in the tourism sector by the private sector. According to the latest survey commissioned by the MHRA on the performance of hotels in our country, for the first nine months of 2016, 5-star hotels increased their Gross Operating Profit by 3%, while 4-stars hotels increased their Gross Operating Profit by 11%. The MHRA commissioned a survey which indicated that 4 and 5 star hotels altogether paid 3.4 million less in water and electricity bills between January and September 2016, compared with the same months of 2012. Such savings were also diverted to further capital and other investments in the respective products and services, this also ensuring a comprehensive quality improvement.
TWO MILLION TOURIST ARRIVALS AND AN INCREASE OF 37% OR HALF A MILLION TOURISTS COMPARED TO 4 YEARS AGO ONLY.
THE REDUCTION IN UTILITY BILLS FOR THE ACCOMMODATION SECTOR LED TO INCREASED INVESTMENT IN THE TOURISM SECTOR BY THE PRIVATE SECTOR.
WE HAVE ADDED NEW ROUTES TO AND FROM MALTA TO SIGNIFICANTLY IMPROVE CONNECTIVITY
WE HAVE DEVELOPED THE LOCAL FILM INDUSTRY LIKE NEVER BEFORE
We were the first to adopt a long-term, strategic approach towards ensuring growth in the film industry of Malta and Gozo. This strategy was based on a number of relevant parameters that are considered critical within the industry including the required infrastructure, financial incentives, our indigenous industry, employment opportunities, education, the ongoing development of skills, as well as screen tourism.
A NATIONAL POLICY FOR TOURISM UP TO 2020
During this legislature, we added nine new routes in addition to the 27 in existence during 2012, thus boasting an airway connectivity to 36 airport gateways. Also thanks to our achievements in tourism, Malta International Airport will be investing E78 million in various projects, including the extension of the air terminal, and other initiatives.
A SUCCESSFUL CRUISE-LINING INDUSTRY THAT IS GROWING
We witnessed the commencement of operations by a new cruise liner, the Mein Schiff 3, while the Mein Schiff 2 launched new homeporting operations through Malta to Malta cruises as from 2016. Meanwhile, in another important development, the P & O cruise liner Oceana was the second cruiseliner to start homeporting operations earlier this year. Cruiseliners brought to Malta a total of 683,000 passengers in 2016, 12% more than in 2012. A survey commissioned by Valletta Cruise Port notes that in 2016 the industry registered a profit of over E90 million, 10% more than in 2012.
The publication of a national policy document for the tourism industry fulfilled two election promises of this Government: that of delineating a political and strategic vision for tourism leading up to 2030, and the setting of specific policies for Gozo. This document is an important step in our drive to place this industry on even more solid foundations, so as to meet the challenges, and fully exploit the opportunities, of the next years in such a dynamic sector.
WE HAVE EXPANDED THE AVIATION SECTOR
TOURISM SECTOR IN GOZO HAS ACHIEVED UNPRECEDENTED MILESTONES
In 2016, the number of tourists who visited Gozo reached the figure of 1.15 million, while the number of foreign visitors who chose to spend their holiday, or part of their holiday, on our sister island, increased by almost 15% when compared with 2015. Indeed, since the beginning of this legislature, the number of nights spent by foreign tourists in Gozo increasedby a remarkable 40%.
The inauguration of a new radar station at Fawwara, a project costing E2.5 million, will enable us to compete for large projects in this sector, something we were unable of doing before. Malta is now also a signatory of the Cape Town Convention. This is an international treaty intended to establish international standards for the registration of contracts of sale, security interests, leases, and the variation of legal remedies for failed financial agreements. The amendments to the Act on the Registration of Aircraft, including Chapter 503, as well other laws that are ancillary to this Act, take into consideration future developments in this sector in Malta. The objective is to ensure that the sector remains competitive and efficient, while exploiting any opportunities, in order for us to become a leader in the aviation sector.
ITS AT THE HEART OF THE TOURISM GROWTH STRATEGY
WE LAUNCHED THE MALTA FILM FUND
The Malta Film Fund offers two types of funding opportunities, one for development and another for production. The Malta Film Commission has announced a total of five schemes, with the introduction of two new initiatives within the scope of its funding capability, while extending assistance to qualifying projects. We have seen the launch of the first ever film related postgraduate programme being offered in Malta, a Master of Arts in Film Studies, which will focus exclusively on cinematic art and the film industry. The rationale behind this course is to offer graduates a sound theoretical and practical basis in all aspects of cinematography, after which they can specialise, within the same programme, in the field they deem most suitable. Films which were shot in Malta over the past four years include 13 Hours, By the Sea, World War Z, Assassin’s Creed, Risen, The Dovekeepers, Limestone Cowboy, Entebbe, and others. These are estimated to have injected E159 million in the local economy.
THE FOUNDATION FOR TOURISM ZONE DEVELOPMENT
During this legislature, we launched the Foundation for Tourism Zone Development. The main objective of this foundation is to improve the attractiveness of tourist areas, and to ensure that government meets the targets for a sustainable tourism environment that supports growth prospects in the industry, while ensuring effective maintenance of public areas. This is being done through projects such as the E3.5 million investment for the improvement of the roads network in and around the Bugibba, Qawra and St. Paul’s Bay area.
A Memorandum of Understanding (MOU) was endorsed upon by ITS and the MHRA will ensure that ITS students are sponsored by operators in the tourism and hospitality sector. During the whole term of their sponsorship, students will gain important hands-on experience of the local industry that will complement their studies. In a landmark development, ITS students are now receiving an annual grant of E233. Government also announced a major investment of E70 million for the new modern ITS campus at Smart City. Described as state-of-the-art, this campus will become a centre of excellence for tourism studies within the Mediterranean. Together with Malta Enterprise, the ITS will be launching a financial incentive scheme to support establishments in the catering sector who want to attract international chefs to Malta and Gozo. This will also ensure skills transfer to local talent through on-the-job training while elevating the quality of the service and product.to skill transfer to Maltese workers.
GOZO VISITORS
SETTING UP OF CONVENTIONS MALTA
The role of Conventions Malta is promoting what the Maltese Islands can offer as a destination for meetings, conferences, and events, focusing on research and planning, marketing and promotion, product development and quality assurance. The sterling work of Conventions Malta is ensuring that we are extending to new and previosuly untapped markets, as well as enhancing the destination’s prospects in established source markets.
P.A.T.H. PROFICIENCY
ACKNOWLEDGMENT IN TOURISM AND HOSPITALITY Public consultation on P.A.T.H launched for formal recognition of workers with extensive experience in the Malta tourism and hospitality sectors. In order to sustain Malta’s extraordinary success story in tourism, we need to continue enhancing quality along the entire tourism value chain. A critical factor to success in tourism is the people whose job is to deliver the range of services associated with this industry. Tourism depends, perhaps more than any other industry, on the quality of the delivery of service and the personal interaction between the provider and the client, patron or guest. Malta’s tourism competitiveness can only be sustained if growth is accompanied by the development of all our human resources. We have been engaging all employment-related stakeholders to secure their commitment towards measures designed to enhance the working conditions and the professional quality of those working in tourism and particular emphasis is being delivered to career development, entry qualifications and continuous personal development.
THE INSOLVENCY FUND During this legislature, we introduced a legal notice aimed at offering adequate protection to local travellers in the event of bankruptcy of a travel company or agent that is duly licensed with the Malta Tourism Authority.
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MAY 2017
www.independent.com.mt
The Nationalist Party’s five most ambitious electoral proposals As the general election campaign winds its way into its final week, we take a look at the two main political parties’ five most ambitious electoral proposals. Here is what are, in our view, the Nationalist Party’s top five:
Nullify the Gozo General Hospital privatisation contract PN leader Simon Busuttil has pledged to have his Gozo minister effectively tear up the contract privatising the Gozo General Hospital on the first day of being in power. While this may be something of as foregone conclusion considering the opposition’s criticism of the contract, it may be somewhat ambitious considering that withdrawing from such contracts would require some extensive legal legwork. Plus, the Opposition would also presumably have to first see the full contract and what it actually stipulated as the version released was so heavily redacted that it was more black than black on white.
Give families €10,000 to move to Gozo The PN’s bid to repopulate Malta’s sister island of Gozo came under heavy fire in the first week of the campaign, when Dr Busuttil pledged a cash incentive of €10,000 for families moving to Gozo or for Gozitan families returning to Gozo. While on the surface the pledge may not seem all that ambitious, the workings of the system will have to be fool proof to prevent the considerable risk of fraud.
€2.3 billion light rail metro system A new mass transport system has been on the cards for as long time now and so far proposal after proposal for a metro/underground have been deemed unfeasible. Now the Nationalist Party has unveiled plans for €2.3 billion light rail system that PN leader Simon Busuttil himself on Friday described as “ambitious”. Perhaps even more ambitious is the fact that the PN has pledged that the first of four metro lines, some of which will be underground and some at street level, will be completed before the first legislature is concluded – i.e. within five years.
A constitutional amendment for a balanced budget In an obvious reaction on the heels of the government’s vaunted achievement of attaining the first budgetary surplus in decades, Opposition leader Simon Busuttil has pledged to introduce a constitutional amendment guaranteeing that the government would maintain a balanced budget every year. While the amendment will hold caveats for exceptional circumstances such as international recessions, the pledge is ambitious because it would effectively provide the state with very little room for fiscal manoeuvre, not even within the three percent threshold that Maastricht Treaty binds eurozone countries to the limit.
Scrapping the Zonqor Point project The PN pledge to scrap the controversial Zonqor Point American University of Malta project dead in its tracks if elected to power may resonate with the environmental lobby, which has vociferously objected to the granting of Outside development Zone land to a private educational institution. But as in the case of the Gozo hospital contract, the ways and means by which a Nationalist government would manage to extricate itself from a contract signed by its predecessor are dubious and would require a careful legal study.
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MAY 2017
www.independent.com.mt
The Labour Party’s five most ambitious electoral proposals
As the general election campaign winds its way into its final week, we take a look at the two main political parties’ five most ambitious electoral proposals. Here is what are, in our view, the Labour Party’s top five:
Resurfacing every road in the country No doubt a lofty ambition but one that will undoubtedly go down well with large swathes of the electorate, one of Prime Minister Joseph Muscat’s first electoral pledges was to resurface every road in the country – from main arterial roads to country lanes – within a seven-year time span. The logistically ambitious project is estimated to cost staggering €700 million and funding will be derived from a combination of European Union and national funds, with the proceeds of the Individual Investor Programme also being tapped.
A budget surplus for the next five years After having this year achieved the first budgetary surplus in decades, the Labour Party, by way of Finance Minister Edward Scicluna, has said it is “convinced” that the state of surplus will continue for the next five years, i.e. over the next legislature. Although the assertion is not exactly an electoral proposal, it can be construed as such since it came hand-in-hand with the tax breaks proposal. The notion is ambitious since, according to the opposition the current surplus was only achieved after state expenditure was slashed. The other question is whether the current momentum will be able to be maintained given the fact that the Maltese economy is susceptible to external shocks that are, after all, beyond its control.
Extending the IIP The Individual Investor Programme has undoubtedly been a monetary boon for the country, but is has also been fraught with ethical issues – not only here in
Malta but also across she European Union since Malta is effectively not only selling Maltese, but also EU passports. As such, the Labour Party’s pledge to extend the scheme beyond the capping of 1,800 main applicants as per its agreement with the European Commission may meet significant resistance, as it had in the past, from the European Parliament.
Giving public holidays back to the workers Labour Party leader Joseph Muscat’s pledge to give workers back the public holidays falling on weekends is rather ambitious indeed, given the acrimony the issue has caused between employers and workers unions. When the issue was last raised, employers had their way and, as matters stand, public holidays occurring on weekends are not compensated for. Dr Muscat has said he will seek the consent of the constituted bodies within the Malta Council for Social and Economic Development will be less a can of worms and more of a hornets’ nest judging by past experience.
Tax refund cheques for everyone One of Dr Muscat’s first electoral proposals was to provide a one-off tax cut in the form of a tax refund for each and every worker, in the form of a cheque in the main by the end of the year. The cheques, depending on income, will range from between €200 and €340 per year, and the refund will be eligible for anyone earning up to €60,000 a year. The measure will cost €46.5 million.