Recent politicking by our two main parties reached out and cast a shadow over the financial services sector. The Prime Minister did not merely speak with pride about it. He made it out to be a purely Nationalist achievement, implying that Labour might not give the same attention to the sector. That is absolutely the wrong approach by the PM.

We have a good thing going. Don’t let nasty politics spoil it- Lino Spiteri

The financial services sector is one of the areas where there was bipartisan cooperation for it to be set up, and in the running of it to the present day. Background to my comment will help frame it in what should be reality politics.

In 1994 John Dalli was Minister of Finance and I was his parliamentary shadow. We used to exchange many views informally. At the time, Malta had become a financial offshore centre of sorts. At a discussion on the impending Value Added Tax at the Radio 101 studios in which the Minister and I were taking part, John took me to one side outside the studio after the discussion was over. He told me that he was working on a package of legislation intended to turn Malta into a financial centre of repute. I agreed with his initiative, feeling that Malta should be fully fledged financial centre, not merely an offshore area targeting so-called tax efficiency, for which read tax evasion.

John and I agreed that it was essential for this to be treated as a bipartisan issue – essential to attract interest from abroad without the disturbing apprehension that a change of government might bring about a change of policy. The Minister asked me how we should proceed, whether he should write to the Leader of the Opposition for a discussion. I replied that the best way would be for me to handle it within the Labour Opposition group.

I briefed Opposition Leader Alfred Sant, who agreed in principle with the proposal, provided acute care was taken that Malta would not become a location for money laundering. We agreed that I should pilot the proposal through the Parliamentary group. I did that in the face of very stiff opposition from former leader Karmenu Mifsud Bonnici. He was more in favour of strengthening the manufacturing side of the economy.

I argued that the services sector was the growth point in the world economy, and that we should not miss out on it. Dom Mintoff did not use to attend the parliamentary group, so he did not have his say.

The parliamentary group accepted the joint initiative in the national interest. I advised John Dalli of the outcome. He was overjoyed and on his part briefed Prime Minister Eddie Fenech Adami, who recalled the development on various occasions, one being a Middlesea Insurance social activity when he was President.

John passed me copies of the copious legislation and we got cracking. Soon enough the package was put on the agenda of the House. On the second reading Karmenu reiterated his qualms about the package. At one point, Mintoff rose to say that he knew nothing about the issue. Somewhat curtly I replied that it was discussed in the MLP parliamentary group, and he should have been there if he wanted his views to be taken into account.

The package cleared the second reading. In the committee stage a marvellous thing took place which demonstrated the mettle of the man. Karmenu Mifsud Bonnici said that he remained against in principle, but wanted to make the bills better than in the original draft. Karmenu participated diligently every inch of the way. His contribution was so important that, I learned, Prime Minister Fenech Adami told the attendant civil servants to take minute note of what Dr Mifsud Bonnici was saying and proposing.

Before long, Malta had a bipartisan financial package which the new Malta Financial Services Authority could use, together with the practitioners, to promote Malta as a financial centre.

I recall being approached by the Authority’s chairman Prof. Joe Bannister who advised me that Minister Dalli had told him to keep me briefed on every development, and to take my views into account.

Not long after that there was a change of government in the 1996 election. I became Minister of Finance. Prof. Bannister asked me how he should deal with John Dalli, now my shadow. I told him that he should treat him exactly as he had treated me, informing him all along the way and taking his view into consideration. When I resigned after barely six months in office, my successor Leo Brincat followed the same policy. Minister Tonio Fenech, too, stuck to that policy with shadow Charles Mangion.

That is one principal reason why the financial legal infrastructure was successful. Later it was supplemented by Malta’s membership of the EU. The Nationalists can take credit for that but a partisan stance on financial services would have scared many potential investors away, even in an EU context.

The years have produced no hitches. Recently there was criticism by a Labour spokesman, as was his right. But that related to Bank of Valletta’s unfortunate involvement in a property scheme, not the financial centre as such.

In that regard Opposition leader Joseph Muscat has made it abundantly clear that, should Labour be returned to office, it would follow the policy practiced over the past 18 years.

We have a good thing going. Don’t let nasty politics spoil it in any way.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.