On Wednesday evening, Parliament continued on its road to lay the legal foundations for what is planned to become “a pillar of the Maltese economy” – the financial services sector.

Contributing some nine per cent to GDP, this sector’s legal foundation needs to be continually updated in order that the success of last year – which saw an increase of 60 companies in the sector, bringing the total to 2,979 – may be repeated, if not improved, said Parliamentary Secretary in the Finance Ministry Tonio Fenech. He spoke of how and why Malta had gone from being an offshore company base to a financial services hub and how accession to the EU had influenced this process, and referred to the way in which the European Commission has agreed to allow Malta to implement a favourable and attractive company taxation system.

Commending the opposition for always supporting bills related to this sector, Mr Fenech expressed annoyance at the way Opposition Leader Alfred Sant had tried to take all the glory for the hard work done in relation to the financial services industry. Giving a long list of work and reforms, legislative bills and negotiations undertaken by Nationalist governments, the parliamentary secretary said: “It is difficult for me to understand that a diametrically opposed politician, one against EU accession, was the basis for all the work this forward-looking financial services sector has done!”

In conclusion, Mr Fenech expressed the government’s sentiments: “We are happy to have reached where we are, but we will never be satisfied. We want to continue to invest in the Maltese, to increase jobs and people’s earning capacity.”

Jose Herrera, MLP spokesman for financial services, congratulated the party in government for the advances that have been achieved, but stressed that Labour’s position of caution with regard to this sector should be respected. He said that EU membership had not been favoured at the time because of fears of the barriers, stipulations and judgments it might have imposed in respect of Malta.

“When it comes to matters of foreign investment, there must be agreement between both sides of the House, or else we will scare away potential investors. It is therefore important to also speak about these things informally,” he said. Praising Joe Fenech, former parliamentary secretary for financial and maritime services, Dr Herrera voiced optimism about the sector’s future, expressing the near certainty that it will be a 20 per cent contributor to annual GDP in the years to come. Having said this, however, Dr Herrera referred to the need for more qualified personnel in the sector, and encouraged the university to make more investment in it.

MLP main spokesman for financial affairs Charles Mangion reiterated this concern for students to be training for this industry, “even if we have legislation in place, what we want will not be accomplished unless we do this.” He encouraged a dialogue between the university, the Ministry and the Malta Financial Services Authority, vis-à-vis vocational guidance. “We should do the same for the financial services sector as we are doing for ICT and technology,” he said. Dr Mangion also asked for clarification of some technical points in the amendment bill.

Winding up the debate, Mr Fenech dispelled fears regarding education and training and gave assurances that something is being done and more is in the pipeline.

He agreed with Dr Herrera’s concern over pressures resulting from EU accession, but said it had been felt that this sector could grow much bigger if Malta became a member. “If countries like Luxembourg and Belgium could do it, so could we,” he said.

The second reading of the bill was passed unanimously. It will now move onto its hearing in the Permanent Committee.