The Malta Independent 13 December 2018, Thursday

Brake on tourism

Alfred Sant Thursday, 6 December 2018, 07:29 Last update: about 7 days ago

We get told that a brake on tourism growth has become necessary since we’re reaching a stage where the capacity of the island to cope with the demands that this sector makes on the social and economic infrastructure will be destroyed.

One cannot but be surprised at the current uncertainties about whether and how we should apply a reasonable brake on tourism growth. There is a simple and efficient method by which to do so, without giving rise to strategies of occult patronage.

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All new tourism projects as well as all improvements to existing tourism facilities would be planned on a stand-alone basis, as defined by planning and all other relevant laws.

Thus, such investments in new hotels or additions to existing ones must be designed solely for use as a hotel facility, and it would not be possible to package them with the building of apartments or offices. The latter would be considered as a completely different line of business, earmarked for investment elsewhere.

In this way, the return on tourism would be evaluated according to how much investments in the sector pay back in and of themselves, not on the basis of cross subsidization with outlays for construction that will be sold as residences or offices.  

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Revolving doors

An interesting controversy has arisen around the change in public service regulations that specify how an employee can leave a post in which which he/she monitored some economic or professional sector. The rules would prevent that employee from immediately shifting to a job in the sector which he/she used to monitor. Details about this ongoing controversy are still not available but it will be useful to follow how the issue develops.

Most European countries have rules to restrict “revolving doors” in career movements, as they are called. Years ago, when the Maltese Parliament was discussing a law defining the statute of the Communications Authority, I raised the need to introduce a measure that would not allow say, the authority’s chairman to leave and immediately move into a top job at Go or Melita. At first, the relevant minister of the then PN administration resisted the suggestion. After a sitting or two, he changed his mind, agreed to the proposal and included a clause to this effect in the text.

In less than a year after the law came into force, the same minister very much needed to make use of that clause. So long as they are introduced and implemented in a transparent and reasonable manner, measures to control revolving doors are most necessary.

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Taxes and social responsibility

During its first year in office, the French government put in place by President Emmanuel Macron reduced taxes on the income and capital holdings of the richest strata of the population. The government justified this by stating that enterprises controlled by members of this strata would now invest more, create more jobs and stimulate economic growth, to the benefit of all.

Macron was accused of having become the president of the bankers.

This year, the government increased taxes on diesel for cars, a product that is considered vital by lower and middle income people who drive from the suburbs to the city on their way to work. The reason the government gave for this related to the need to reduce the use of polluting fuels, in line with decisions taken at the international conference on the environment held in Paris.

Protests against this measure went on week in, week out, becoming more violent by the week.
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