Labour MP Josè Herrera warned against complacency on the success of the financial services sector which accounted for one third of the Maltese economy. He said this sector was very volatile, and could be lost in a relatively short time.
Speaking during the debate on second reading of the Bill to amend the Gaming Act and the Lotteries and Other Games Act, Dr Herrera said that online betting, together with property development and the construction industry were crucial for Malta’s economic success.
The opposition was not happy that the economy had to rest on this sector because of its volatility. He said that a lesson had to be learnt when overnight Malta lost the oil bunkering business after the EU had removed the derogation given to Malta.
He said that the government should make efforts to develop the yachting and ship chandlery niches as these could develop into a thriving industry for Malta. Malta was already facing competition as regards yachting from Sicily and Tunisia.
He said that the opposition had always cooperated with the government on financial services including gaming and online betting. This was not a question of morality as long as gambling was regulated. One could not be scrupulous on this sector as long as one was up to standard in international terms.
Up to now the EU had not imposed tax harmonisation on this sector. But there was nothing to stop the EU from drafting legislation which might leave dramatic repercussions on Malta when 10 per cent of its economy rested on the sector.
Dr Herrera said that property development had suffered serious setbacks. The problems in the construction industry were double what they were in Ireland before it went bankrupt. Public borrowing in Malta was larger than Argentine’s before its collapse. The only difference was that most of Malta’s borrowing was locally based. One could not be complacent in front of this dangerous situation. This should be an eye opener, said Dr Herrera.
He, therefore, called on the government to make an enormous effort to develop more yacht marinas. Professionals in the sector felt that there was inertia from the government on this sector. The tourism sector also needed to be made vibrant again.
He criticised the government for not taking measures to safeguard the up-market property industry. While abuses had to be curtailed, measures had to be taken and not just suspend the business which was bringing considerable revenue in the country. The government had to create a climate of friendliness while protecting the environment to re-launch the construction industry.
Dr Herrera referred to meetings held with the minister concerned and with the Gaming Authority’s CEO whereby businessmen in the gambling sector were told that they would be given permission to import gambling and amusement machines. Parliamentary Secretary Mario Galea had also told these businessmen that they could import such machines under certain criteria.
All this happened at a time when the sector was still unregulated. It was also a period of legal uncertainty because legislation had not yet been presented and approved in Parliament.
There were businessmen who had taken heavy loans from banks to import these machines which were later confiscated by the police in raids they had made on outlets all over Malta. These businessmen were also taken to court although they had imported the machines legally. They had also made a number of judicial protests.
The Attorney General enjoyed wide discretionary powers on fines imposed by the courts ranging from a minimum of €230 to €350,000 on gambling machines.
Parliament should recommend to the Attorney General to use his discretionary powers to impose reasonable fines in cases before the criminal court which had been instituted before parliamentary legislation was enacted.
Dr Herrera said that the Attorney General was burdened with wide discretionary powers. In Malta where the judiciary was independent of the Attorney General, criteria should be established that fines requested by the Attorney General should be proportionate to the seriousness of the case, especially where the magistrate in the criminal court felt that the case was minimal.
He added that it would be dangerous to amend the Criminal Code haphazardly. The President of the Republic was not giving any presidential pardon on VAT cases because no such advice had been given to him. Under the previous presidency this pardon for persons condemned by the court were given in cases concerning VAT and they were released from prison after paying 10 per cent of the fine. Dr Herrera called on the executive to advice the President on pending court cases which were instituted at a time when legal uncertainty prevailed.
Labour MPs Alfred Sant and Charles Mangion also contributed to the debate. Their speeches will be reported on tomorrow.