We are Embracing New Citizens who, in turn, are Embracing the Maltese
Hon. Alex Muscat – Parliamentary Secretary for Citizenship and Communities
There’s never a shortage of things for Government to spend money on, but how it meets its bills is another thing. One option is to borrow more and more, but how sustainable is that in the long term? Another is to raise taxes but, perhaps not surprisingly, that is never a popular move.
The success of this Labour government has been to grow the economy, give people jobs, reduce welfare bills and increase revenues from successful businesses. We did the near impossible of increasing spending on public services while repaying debt and lowering taxes.
Then the dark clouds of COVID-19 arrived. This crisis is a setback for our economy as it is, indeed, for just about every other economy. The good news is that Malta is better placed than most to get out of this crisis, but it will take time to turn things around.
Fortunately, the Labour government also had the foresight to save for a rainy day. The Individual Investor Programme (IIP), launched in 2014, has attracted €1.4 billion into our economy. Usually when we use the phrase “with hindsight” we are talking about how we would have done things differently if we had known what was coming. This is a case where we can say that, with hindsight, we wouldn’t have done things any differently. We had no idea that a pandemic was going to hit us but we knew it would be wise to prepare for the unexpected.
The €1.4 billion includes the investment from people seeking citizenship, the purchase of bonds, the purchase or lease of property and donations to local voluntary organisations. Several applicants have also opened commercial operations here, adding to the value generated.
Most revenue from the IIP is put aside for strategic investment in the National Development and Social Fund. In this crisis, the investment programme is providing the necessary funds to guarantee capital loans, offered by banks to affected businesses. The government’s target is to guarantee at least another 5% of Gross Domestic Product in loans to businesses.
The economic aid packages, agreed with unions and employers, are costing the government more than €71 million per month. Consequently, the government will have to borrow more than €1 billion to cover the full cost. This will see public debt increase by about 8%.
Because of this, a decision was made to change the ratios of how funds are distributed. Now 80% are directed to the Consolidated Fund, giving the government more flexibility to help the economic sector to save jobs and the health sector to save lives. It is estimated that, through this temporary measure, the revenue to be allocated to the Consolidated Fund will exceed €80 million, an increase of approximately €50 million on what is normally allocated.
The worth of IIP is particularly noticeable on the ground in the multi-million euro investments happening now in housing and healthcare but, in addition, over the past 12 months, 36 local NGOs have benefitted from 128 donations from various applicants for Maltese citizenship. They total nearly €800,000. Among the NGOs that have benefitted are the Puttinu Cares Foundation, the Malta Community Chest Fund, the LifeCycle Malta Foundation, Inspire and Heritage Malta. We are embracing new citizens who, in turn, are embracing the Maltese.
Concerns have been raised about IIP but the truth is we have one of the best due diligence systems in the world. Applicants have to be of good standing, and be clear about the source of their wealth, or they are refused entry. We have rejected 23% of applicants since the start, far higher than other countries have done. We’ve even identified people already operating in the European Union who we consider unacceptable for Maltese citizenship. What’s more, Malta’s system operates under an independent regulator, the names of all successful applicants are published, and we even have a system for removing citizenship if damaging information comes to light later.
Recovering from the current crisis isn’t going to be easy but, at least, we can be glad that we created a programme that brought in the funds that we so desperately need now. And we can rest easy that we did it in the more responsible manner.
All Maltese should celebrate how we are pulling together to get through this crisis, and this includes the new Maltese who, while very small in number, are making their contribution too.