Prime Minister Robert Abela said that sometimes he feels as though he is losing his patience with the banking sector.

He was speaking during an event organised by the Chamber of SMEs, where he and Opposition Leader Bernard Grech responded to questions posed by a number of business people.

Abela was reacting to statements that were made by representatives of the Chamber of SMEs, who said that the bureaucracy businesses are facing with banks are causing issues.

Referring to the banking sector, Abela said: “Sometimes I feel like I am losing my patience with this sector. While I understand the importance of the regulatory aspect and understand that banks increased due diligence and their scrutiny processes, which is good and is needed, there is extra bureaucracy which I frankly struggle to understand. We recognise that this difficulty exists,” he said.

Here, the Prime Minister mentioned the recent FATF update; that Malta has satisfied its action plan and “now we are looking ahead to an onsite visit in the coming weeks, for the FATF to reconfirm that what we had to do has been done.”

In December 2018, the government implemented legislation so that private account holders would have a right to a bank account, Abela said. “This measure has existed for three years. There is an EU directive that we implemented on this. But now we are speaking about the business sector, so that this same measure we introduced for personal accounts will be implemented for businesses. This way, unless there is a valid and justified reason for a bank to refuse, everyone in business will have the right to a bank account.”

He also pledged to open a credit review office that will arbitrate between commercial banks and their clients regarding loan applications, and will also ensure that the loan system works effectively.

Finance Minister Clyde Caruana on Monday also expressed concern with banks when asked about the situation separately, saying that banks are taking too long to open accounts for businesses. The Prime Minister’s comments have to be taken within the context that banks at times are taking a bit too long to open accounts and “at times they do not open them at all for certain businesses,” Caruana said. He added that this is something that the government cannot accept ‘hands down’, for the simple reason that the economy needs to grow. In order to achieve this, the government needs to find a compromise with the banking sector to enable anyone to open an account if there is proof of legitimacy, Caruana had said.

Opposition Leader Bernard Grech, at the Chamber of SMEs conference, said that these banking effects are due to Malta’s greylisting. “It is a reality we face, and we were not placed on the list by coincidence, but due to the way the government operates.”

“In order reinstate our country’s reputation, you need to have a clear plan and must have the needed credibility to do so. The weight that you have had to carry is unjust. While banks have responsibilities, we must ensure that excess bureaucracy is reduced.”

“Over past two years, bureaucracy increased and that is this government’s track record. We will be doing a lot in this sector, as we believe there are excess expenses on businesses. Last week a friend told me they had to employ someone for a €40,000 wage to ensure that the company is compliant with all the regulations being introduced. Tell me if this helps you or is a weight you need to carry. Tell me if, while we are passing through a pandemic, you found support to carry these weights that had to be introduced due to Malta’s greylisting and due to the government’s operations over the past ten years.”

“Our reputation is the key that will again give you the opportunity to keep growing.”

Bernard Grech also spoke about the need for the country to have a level playing field.

He pledged that a PN government will create a climate of fairness, where businesses can operate without having an obligation to anyone, “without someone calling you to Castille to give you a permit the PA would have issued a week before an election.”

“We learned from our past mistakes. We are not perfect, no one is perfect. But we are proposing a package of proposals that promote businesses who operate as they are meant to and continue to invest.”

Grech spoke of other proposals his party has, such as reducing the tax rate in profit made by businesses that are Environmental, Social, and Governance (ESG) compliant to 15% on the first €500,000.

On 26 March, he said, the country will have a choice, either to continue walking down the road of fear, “where people are afraid of responding to surveys, where businessmen fear speaking to the government’s political opponents, or if they want to reopen the door to liberty.”

Both party leaders presented a number of their proposals to the Chamber.

One of the business people present brought up the employment issues businesses are facing, not finding enough people to employ, and the length of time it takes for applications to hire Third-Country Nationals (TCNs) to be processed.

Prime Minister Robert Abela took aim at the PN over this issue. “The Opposition was against TCNs, calling us an economy of cheap labour. They ran a whole campaign on this issue and I was not surprised with that move coming from a party synonymous with rising unemployment.”

He spoke about simplifying processes and also mentioned some proposals in the PL’s manifesto with regards to employees.

Bernard Grech took aim at the government and its hiring practices. He said that a PN government will not compete with the private sector by “stealing workers and giving them a pretend job where they work for an hour or two only.”

“You cannot compete with a government job, ever, not even if you offer more money. A PN government will not offer phantom jobs.”

He said that the processes causing delays in TCNs being brought to the country should be handled online and the process should be digitalised.

Responding a question as to how businesses will have peace of mind on 27 March given all the international issues impacting Malta – such as importation issues, rising prices, Grech spoke about the importance of bringing in new economic sectors.

“We are the only party saying clearly from where we will get the funds to implement our proposals by creating 10 new economic sectors while strengthening the existing sectors. The PL can only bring about more debt. Sometimes you need loans, and yes every now and again can also substantiate certain investment, but you must create the new economic sectors.”

Abela took aim at Grech. “When you speak of debt, may I remind you that half of the amount you will invest in these new sectors, €500 million, will come from loans. All of you know what the job market was like pre-2013, what the economy was like. We had unemployment. We had paralysed investment. You killed the appetite for investment,” he told Grech. “Over the past 9 years, the country’s opportunities and business growth was unprecedented.”

He responded to Grech’s accusation regarding government giving phantom jobs. “From where in the civil sector will you reduce the number of workers – teachers, doctors, nurses, those are the employees we have in civil service.”

Abela said that the costings of the PL manifesto have been made. “Have you ever heard about how much the opposition’s pledges will cost?” He said that the PL’s manifesto will cost €3.3bn.

 

Grech said that the PN’s costings were made and that they will be published in a document in the coming days.