The sale of passports is not simply a money spinner but a means to attract “high network individuals” who can help change Malta’s economy, according to Prime Minister Joseph Muscat, who tells Mark Micallef that some of the criticism levelled at the programme is really unfounded.
Before Monday’s Budget, some commentators, including Lino Spiteri, urged you to postpone the income tax reduction until the country meets its deficit targets again. Instead, you extended the tax bands further.
I understand Lino Spiteri’s argument but I believe that besides being a financial and economic exercise, the Budget is also an exercise in credibility.
People are tired of politicians who say one thing before an election and do another once in power.
Before the election I consciously promised that I would retain the Budget prepared by the Nationalist government, which included a commitment to reduce the top tax rate over the following three years, and I did not want to go back on that pledge.
The question is whether this is sustainable.
Yes, it is sustainable if we proceed withthe economic plan of this government, where we are being very conservative in our projections...
But this all depends on what happens with the deficit. Your projections in this area are not conservative. The EU’s forecasts are far higher than yours.
If you look at the report that accompanied the autumn forecast, you will see that the European Commission said clearly it was making its projections before having seen our Budget.
The Commission has also made some positive comments on the economy, that take account of the latest picture and you welcomed them. You can’t acknowledge these comments but then say, they have not seen the latest statistics...
No, of course not, but the reality is that I see the (deficit) figures every day and so far we are on track and I believe we are going to be on track to end the year with a deficit of less than three per cent.
I understand that the EU is not believing us, because they are used to the previous government saying one thing and then doing another.
Did you get any informal feedback since you presented the Budget?
Yes. The verbal feedback is rather positive but I don’t really want to comment or be euphoric before I have it in writing and a formal decision is taken on our excessive deficit procedure.
After eight months in government, I think some people expected to see solutions for the health sector. Instead you launched a White Paper.
In reality we inherited a system that is no system at all and therefore the changes needed are not cosmetic or superficial.
When we publish the White Paper that will deal with the Pharmacy of Your Choice (POYC) scheme and also the Government’s medicine stock management system, you will see we do have ideas that in some cases are radical.
We will stick to the principle of free healthcare for all but we want a fundamental change in the way things are done.
But while you put an April deadline on the childcare White Paper, there is no deadline on this reform. Why?
Because with childcare it’s a question of building something from scratch.
With the health service, POYC and medicine stock management, you have a bad system that has been in place for a number of years. You need to eradicate that.
To do that you need to speak to the stakeholders, you need to speak to the people who run it, you need to speak to pharmacists and above all the patients.
We’ve been over this in the past already. It’s as though you had no plan and had to start from scratch when you came to power.
A plan starts with taking stock of a situation.
I thought, based on all the propaganda, that at the very least the Government could know what stocks were available at the press of a button. That system does not exist.
There is no proper forecasting system. We’re in a situation where our suppliers are in a better position to say what we need than we are. This is not acceptable.
We want to attract the sort of people who can help grow our economy
We were aware of these things. Years ago, I recall John Dalli, then responsible for health, talking about the lack of an IT system.
I recall my predecessor saying we have the best health system in the world.
And I’m sure you did not take him on his word.
No, but I believed that at least there were the basics. Our priorities are Mater Dei Hospital, medicine stocks and primary healthcare.
With due respect to the people who run Mater Dei, there is no direction. Decisions are taken by a few people who have enormous power and there are no checks and balances.
With primary healthcare, we will start by extending the opening hours of polyclinics, also to show professionals in the sector that when we provide people with a better service, it takes away a lot of pressure from Mater Dei.
Are you taking into account the vested interests in this field? Are you planning to hold these talks and introduce measures within this year or this legislature?
I am saying this year, in the coming days, after we publish the Dalli report and hold talks with stakeholders.
There might be some resistance from some unions on the basis of some of the findings made by Mr Dalli.
I want to sit down with doctors, nurses and representatives of paramedics, let them know what the situation is like, say clearly I am not satisfied.
Are you ready for the storm, because you are likely to face one, particularly with the doctors? The problem is money, essentially.
I don’t think so. Because when there were increases in the past, the situation did not improve.
That’s because the money was not enough. If you’re going to ask doctors to work full time, to operate a full-time hospital, you are going to have to pay.
There is a lot of waste that needs to be eliminated. But there are also ideas about how we could (do that) with the private sector.
You asked if I was ready for the storm? I say, I am ready to discuss... I will be defending the interest of patients.
I am not a doctor, I am not a manager, my field is economy and management, I look at the hospital as a patient. I am prepared to spend money but for that money spent I want to see people get a good service.
MUMN president Paul Pace accused the Government, right after the Budget, of doing the sort of things it used to criticise the Nationalist Party for.
I don’t think that is the case, I have a good relationship with Paul Pace.
Henley & Partners, which is handling Malta’s citizenship sale, says the scheme could attract between 200 to 300 clients a year, a far cry from the 60 or so talked about by the Government so far. Given it may be such a serious revenue stream, don’t you feel the scheme needs to be more transparent than it is today?
First of all, our outlook to collect €30 million from this scheme (equivalent to about 60 people) is a conservative and realistic outlook. We will know the real figure at the end of the year.
So there isn’t going to be a cap on the number of people that can apply?
This isn’t a matter of capping, if we see the scheme attracting more people than we expected, the capping can be done by imposing more stringent conditions, or an increase in the price.
But people will have no insight. Why shouldn’t the Maltese know that you will not accept more than 300 people, for instance?
Why not put a cap on the number of foreigners who can marry Maltese citizens then? That is what you are saying.
This is different; you are inviting people...
No, I think it is the same thing. As things stand, if a foreigner marries a Maltese citizen, after five years, he or she will have a right to citizenship, a right to benefits, if un-employed, a right to free education, a right to free healthcare...
This programme could be so beneficial for Malta that it could undermine the Nationalists politically
And all the rights that citizenship brings...
The people who will be coming through the citizenship scheme will not potentially gain citizenship through marriage and then end up on unemployment benefits but are people who will contribute to the Maltese economy from day one.
By the same token, if we are going to put a cap on this form of citizenship, should we put a cap on citizenship through marriage. I think it’s a puerile argument.
The difference is that with the citizen-ship scheme you are asking for the applications, literally.
The argument does not hold water, simply because we are talking about ways to become Maltese, and the Individual Investor Programme is not the only way for foreigners to become Maltese.
There are other ways, including by having lived here for a number of years. Should we cap that too?
I don’t think they are the same but how does this policy of opening the door to foreign citizens square up with your tough talk on immigration?
What a difference, we are talking here about the importation of talent.
Money more than talent, really...
No, talent, because we are going to be vetting the candidates.
Not all those who apply will qualify. Besides the vetting, we will be asking whether it is desirable that this person is a Maltese citizen.
This is the new economy that is opening up, not only in Europe but globally and Malta cannot be left behind.
The criticism levelled at the scheme is precisely that the way it is structured will not bind these new citizens to Malta.
I am sure that the way this scheme is being promoted will lead to a huge ripple effect on the economy.
It will surely have a financial effect.
It has nothing to do with the amount of money that these people will be paying. The only other similar programme more expensive than ours is Austria’s.
Cyprus charges €2.5 million.
You are mistaken, the Cypriot scheme is for people who have lost money they had invested there and if you have lost money you will be given free citizenship.
There are two levels, in one of them you can also buy citizenship in Cyprus.
Our programme is the second most expensive in Europe behind Austria’s, and that is a fact.
This is the only programme, according to Henley itself, that puts Malta at a par with the citizenship programmes of Caribbean islands.
The transaction is that simple, you give me the money and I give you citizenship, after vetting. There are countries where you don’t even need to go through all of this.
I can name the US, for instance, which has a process of naturalisation and citizenship, or Canada, which closed the programme only recently.
They usually involve a period of time.
No, it’s not always like that. In Canada the programme was such a success that they closed it for a while and will now be launching a new programme.
Canada and the US have an orientation towards immigration that is very different from ours.
Tell that to the Mexicans. There is a wall between Mexico and the US and patrols taking place. The people that go through do so illegally. I think you are making a generalisation that does not make sense.
So, we are too selective in our immigration policy?
It’s not a question of being selective; it’s a question of attracting talent. We want to attract the sort of people who can help grow our economy, who can bring their networks and make of our country a thriving economy.
I want Malta to become a global country. I understand the concern of certain people and in fact we are proposing to make amendments to the Bill.
Such as?
For instance, the question of governance. We have added a monitoring board, over and above what there is already, which can have a representative of the Opposition or the Leader of the Opposition himself, and if there is any doubt, it can be raised internally.
Why internally? Currently, when a foreigner becomes a Maltese citizen, their name is published in the Government Gazette. Why is this different?
Because it is a different market... I’m not saying there should be restrictions (on other citizenship by marriage or naturalisation) but why should we have these restrictions in the case of these high network individuals?
You are calling a restriction the fact that these people’s names would be in the Government Gazette? This would give people the peace of mind of transparency.
We are saying that this peace of mind will be given through democratic scrutiny.
I want Malta to become a global country
If there is such demand for this scheme, why not be more transparent? If someone is uncomfortable with having his name published, so be it, there will be others interested in the scheme. The suspicion is that he may have something to hide.
No, absolutely not, we will have due diligence standards that are very stringent, before the candidates are assessed by Identity Malta.
The Opposition asked for a mandatory condition to have candidates make an investment in the country besides a simple financial contribution to a fund. It’s not clear why you are rejecting this.
Some countries that insisted on candidates putting money in the country’s banks, or buying bonds or even buying a property, were finding this to be an artificial investment.
The people making it would take it back or sell the property as soon as the prescribed time was over.
Isn’t it even more artificial with the current scheme, which requires that you have no ties to the country?
I believe there will be a substantial number of people who take up this scheme and who will be contributing directly to the economy – and I am not referring to the initial cash injection.
I am talking about investment and networking and hope that in the coming weeks and months, people will be seeing these results. I fear that the Opposition is panicking because there may be a vested interest.
It could also be that this programme could be so beneficial for Malta that it could undermine them politically.
What happens if this does not materialise? If we have 300 or so new citizens who simply deposited the money and have nothing to do with Malta?
I don’t think that will be the case.
But what if it is, will you revise the scheme?
I do not rule out any sort of revision. We will learn about the programme as we go along and we can raise the price, for instance, or add new measures.
Considering this demand, why ask for only €650,000?
I’ll give you the argument put to me by the experts, because I too asked this question.
They said, Mr Prime Minister what would you prefer: that we set it at €650,000 and you tell us that too many people are applying and that we should raise it to €1 million, or €2 million; or that the scheme is launched at €1.5 million but then has to be revised downward because not enough people are applying?
A country cannot ask for €1.5 million and then reduce it, even by one cent, because when you do, you lose your credibility, as has happened to other countries.
Critics would argue exactly the opposite. The price is so low and the system so easy, comparable to the systems of the Caribbean islands, that this is already undermining our credibility.
I disagree completely. I am sure once we are taking the advice of experts... if we see that this scheme is going to be a bigger success than what we are expecting, we will revise it.
But we couldn’t have done the reverse and reduced it, that is how you undermine the country’s credibility.
Why the haste?
We have been discussing this scheme with the Opposition since June. First they indicated they agreed and then they came out publicly against it. I still cannot understand this.
But beyond the Opposition, we have been properly discussing this publicly for two weeks. Is that enough for a proposal such as this one that was not even on your electoral programme?
We’ve been discussing this publicly for longer than that. You have been talking about this for weeks.
In reality, I am prepared to listen to what people have to say but without wanting to be offensive, I think the arguments being made are a case of irrational fear.
They are the same arguments that used to be made when financial services were first set up. I looked it up: they used to say Russians would come to Malta to hide their money.
Is that what happened? No, we built a good reputation and the same will happen with this sector.