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Shadow of Panamagate hangs over Labour’s third year
JURGEN BALZAN says Labour’s first three years have seen the government score highly in a number of sectors but shocking own-goals in governance that put Joseph Muscat’s legacy at risk
15 March 2016, 9:00am
Jurgen Balzan
Jurgen Balzan
2 min read
Bolstered by an unprecedented 36,000-vote and a nine-seat majority Prime Minister Joseph Muscat – who for the best part of his time at Labour’s helm has enjoyed a ‘Teflon’ reputation – retained a healthy lead over the PN and Simon Busuttil in the polls during the first three years in government.
However, 2016 has so far been Muscat’s annus horribilis and a series of scandals has not only eroded Muscat’s perceived invincibility but also risks overshadowing his successes.
Following the revelation that both his right hand man, Keith Schembri, and most trusted minister, Konrad Mizzi, own a company in Panama – a tax haven – and a trust fund in New Zealand, Muscat has now lost his sheen and given an opposition still reeling from the electoral defeat and the baggage of its recent past a glimmer of hope in the run-up to the next election.
In addition to Panamagate, the Gaffarena expropriation deal and the Café Premier bailout have made governance Muscat’s Achilles heel.
Labour’s historic victory at the polls came in the wake of acute discontent with the Nationalist governments’ arrogance, detachment from the people, maladministration and scandals.
True to his word, Muscat strengthened the economy, reduced energy tariffs, introduced free child care for working parents and introduced civil unions.
But in terms of good governance, the first three years of Labour in government have reinforced the public perception that there’s little to choose between the two major political parties.
Beyond policies, which one can agree or disagree on, depending on ideological viewpoints, Muscat’s government has done nothing to cultivate a culture of high ethical standards in public life.
Muscat’s best hope to secure a second term is to assume the political responsibility he promised, otherwise he will taint his legacy by wilfully repeating the errors of his predecessors, who were heavily punished by the electorate in 2013.
| THE GOOD | THE BAD | THE UGLY |
|---|---|---|
| Economic growth• Statistics released this week revealed an astounding result, with real GDP clocking off at 6.3%, way above the European average | Zonqor• Jordanian construction firm Sadeen was handpicked by the government for the construction of a private 'university' on ODZ land in Zonqor Point in Marsaskala. This drew the ire of the environmental lobby and civil society, culminating in a protest attended by thousands. | Gaffarena •Parliamentary secretary Michael Falzon resigned following a damning report by the Auditor General into the expropriation of property owned by Marco Gaffarena concluded that the deal was in clear breach of the fundamental principles of good governance, transparency and fairness. |
| Unemployment • Malta's unemployment rate, standing at 5.1%, is the third lowest in the EU | MEPA• The government's decision to separate MEPA's planning and environment protection functions and create two new separate and distinct authorities is seen by the green lobby and legal experts as a step backwards in terms of environmental protection and autonomy of the authorities. | Café Premier bailout • The Café Premier scandal saw the government pay Cities Entertainment €4.2 million to buy back a 65-year lease on the outlet in January 2014. The Auditor General found poor governance and lack of documentation to justify the Office of the Prime Minister's decision to buy back the lease. |
| Energy Tariffs • Despite the delay in the construction of a new power plant, the government reduced energy tariffs for households and businesses. This was possible through the Sicily interconnector, the Chinese investment in the flailing Enemalta and the agreement with ElectroGas to build a gas plant in Delimara | Australia Hall• The former colonial building was granted to the Labour Party as compensation for the transfer of land the party owned on the site of the Malta Shipbuilding Corporation. In 2014, the property was sold to A.H. Developments Ltd. Labour declared the value of the property to be just €582,343, but an architect commissioned by the Commissioner of Inland Revenue had originally valued it at €5.5 million. | Sheehan shooting • Muscat was left with no option but to sack one of his star candidates, Manuel Mallia as home affairs minister following the shooting incident involving the minister's driver Paul Sheehan. |
| Civil Rights• The introduction of civil unions for same sex couples and the ground breaking trans and intersex law placed Malta at the top of the International Lesbian-Gay Association's 'Rainbow Europe' league for LGBTIQ rights | Public transport • The government once again missed the bus when the service did not improve and still is one of the people's major concerns after a Spanish company, Autobuses de Leon, took over the service. | Cyrus Engerer • The appointment of Cyrus Engerer as a special representative of the Maltese government to the European Union and his anointment as a "soldier of steel", despite his criminal conviction over revenge porn was another nail in the coffin of Labour's 'meritocracy' pledge. |
| Whistleblower Act• One of the government's first acts saw the enactment of the long awaited Whistleblower's Act but the law offers little protection for whistleblowers, while providing full immunity for the guilty | Privatisation of health • Despite successfully reducing the number of different medicines which used to be out of stock and cutting the waiting lists in a number of services, the decision to partly privatise the Gozo hospital and St Luke's Hospital has raised fears that the State could abdicate its responsibilities in providing free healthcare. The deals are shrouded in secrecy as the contracts have not yet been published. | Panamagate• The revelations that both the energy and health minister Konrad Mizzi and Muscat's chief of staff Keith Schembri have a company registered in a tax haven have opened Muscat's closest allies to suspicions of corruption but the Prime Minister has unfalteringly remained loyal to both |
| Prescription on political corruption• The law abrogates the right of ministers, parliamentary secretaries, MPs, mayors and councillors to plead prescription when charged with corruption and allows the State to file civil action to recoup assets acquired from corruption | Police force• Already under the fourth Commissioner in three years, the force has seen its reputation tarnished, especially following the Paul Sheehan shooting and revelations of former Police Commissioner Ray Zammit's family business links with the Gaffarenas and his son's short-lived employment at Enemalta after being controversially boarded out from the force. | |
| Party financing • Although the Electoral Commission - entirely composed of representatives of the two major parties - will act as regulator, for the first time ever the party financing law introduces basic checks and balances | Sai Mizzi• Despite a barrage of criticism over nepotism, the government decided to engage energy and health minister Konrad Mizzi's wife's Sai as Malta Enterprise's envoy in China. Her contract, worth €13,000 a month, will not be renewed when it comes to an end in August this year. | |
| Free child care • The government is spending some €5 million a year to provide free childcare services for families where parents are either studying or working, in line with an electoral pledge, that came into force in April 2014 | Judicial appointments • The botched nomination of Ingrid Zammit Young as magistrate and the controversial decision to appoint Speaker of the House Anglu Farrugia's daughter Caroline Farrugia Frendo to the bench left the government with egg on its face. | |
| Tourism • Although Air Malta's future is still uncertain, the Labour government has continued building upon the good work of successive governments, breaking records year upon year in terms of tourist arrivals and expenditure | Visa racket• The government made significant changes to the administrative organisation of Identity Malta but the agency was subject to a police investigation into allegations that thousands of visas and residence permits were issued fraudulently before and after the 2013 election. | |
| Vilification • Updating Malta's criminal code to reflect contemporary realities, the proposed changes also serve to clarify a number of outstanding legal grey areas, especially where pornography is concerned | Maltese Citizenship Act • The contentious scheme allows non-EU citizens to buy Maltese citizenship by paying €650,000 together with mandatory investment requirements of €350,000 in property and €150,000 in financial instruments. So far the programme has raked in some €120 million but has come under intense criticism for turning citizenship into a commodity, its secrecy and for creating a two-tier system in the naturalisation of foreigners. | |
| Cohabitation Bill• Labour plans on introducing new rights for families and similar set-ups in which the two breadwinners are not married couple | Marlene Farrugia• Outspoken MP Marlene Farrugia resigned from the Labour Party in the wake of the Zonqor saga and the MEPA demerger. Despite staying on as an Independent MP, Farrugia lost any kind of influence she could have had on the government. | |
| First-time buyers don't pay property tax• Disposable income served as one of the key factors driving domestic demand with first-time buyers saving thousands on property | ||
| In-work benefits for claimants returning to work• In line with Labour's 'make work pay' budget, re-entrants to the labour market did not have their social benefits removed but tapered out | ||
| Enforcement for 2% workforce threshold for disabled people• SMEs will have to employ disabled workers as per the minimum quota laid down in a law first enacted in 1959 |
Jurgen Balzan was a MaltaToday reported from 2011 to 2017.
