Dad, political sociologist, local councillor, drummer from Malta

Monday, December 23, 2013

The revamped Citizenship scheme - First impressions

My first impression on the revamped citizenship scheme is that Malta will still commodify citizenship in a discriminatory manner, through 'bonus' revenue which is required to make up for populist and unsustainable income tax cuts.

Yet, once again, this can open a pandora's box of unintended consequences. First: Malta might be giving the impression that its economy is hovering towards fiscal crisis. Second: Malta might raise eyebrows for exploiting a loophole in EU legislation with possible political repercussions. Third: Malta is merely postponing vital decisions regarding sustainable sources of revenue required to finance public services.

As regards the latter, the capping of a maximum of 1,800 persons to benefit from the scheme shows that public discontent has had an effect, but also raises questions. I will not resort to conspiracy theories, but I merely ask whether this decision will result in an economic 'curse' through which Malta avoids taking important fiscal decisions required for a sustainable welfare state - as is the case with countries characterised by the 'curse' of exploiting finite resources such as oil and postponing major fiscal decisions.

In the final instance all this is very much related to the populist electoral decision to reduce income tax. Universal public services require a sustainable flow of revenue.

Related links:

Malta Today

The Times of Malta

The Malta Independent

1 comment:

Antoine Vella said...

First of all, it is misleading for Government to claim that citizenship will now cost €1.15 million. In actual fact it may be as low as €875,000.

Besides the original €650,000 a prospective citizen has to buy a small number of shares for €150,000 and rent a place for €75,00 spread over 5 years. they don't even have to buy any property.

This means that the cost has gone up by a mere €225,000.

Moreover the price for dependents' citizenship has not been touched. A family of five will now pay €975,000 instead of €750,000.

And what about the bulk-buying discount for those who buy a larger number of passports? Will that remain?

The Government has no idea what bonding means if they think that these relatively small amounts of money constitute a "bond".