EXCLUSIVE: Joseph Muscat has been paid Eur7,000 a year by the government for using his own car for the last SIX YEARS already
The fact that the prime minister is being paid by the government to use his own car as his official car, at Eur7,000 a year for five years = Eur35,000, has made the news. Repeatedly.
But even I had forgotten something I reported on this website five years ago: that he has been doing this since he became Opposition leader.
The Opposition leader is entitled to a car paid by the public purse. In 2008, when he became Opposition leader, instead of taking up the offer of a new official car, Muscat tried to sell his family car (the very same Alfa he’s got now, as it happens) to the government while retaining it for his use as his official car.
The request was refused outright, so he asked to be paid to carry on using his own car instead.
The rules which regulate the perquisites of government/state officials allow them in certain circumstances to obtain an allowance for using their own car. Muscat’s request was acceded to.
He was given Eur7,000 a year to carry on using his own car and had a hefty petrol allowance as well.
When he made the transition from Opposition leader to prime minister, he carried on doing the same thing, even though his status as prime minister is completely different and puts this choice in a totally different perspective in the public eye.
He is not ‘leasing’ his car to the government, but being paid by the government to use it as his official limo.
Over the past six years, Muscat has already taken Eur42,000 from the public purse for the use of his own car. Over the next four years, he will take another Eur28,000.
When his 10 years (2008 to 2018) of being paid by the government to use that same Alfa are finally up, he will have been paid a total of Eur70,000 from the public purse for using it, not only covering the depreciation down to zero, but also making a good profit on the original cost.
And while, as Opposition leader, he was being paid by the government to use his own car, he was suing that same government to get back his VAT on its registration tax.
In the court documents which listed the thousands of plaintiffs in alphabetical order in the Labour Party’s class-action suit, Joseph and Michelle Muscat are not there among the Ms. Their names were tucked away at the back, among some random names that are not Maltese.
So the question reporters should be asking now is: “Prime minister, have you and Mrs Muscat each received your cheque for Eur110 for VAT back on your cars’ registration tax?”
The answer to that question, I would say, is obviously ‘yes’ – but when that supporter during his Marascala meeting waved his cheque for the cameras, Muscat didn’t bring his out, wave it back and say, “Isn’t it exciting? I’ve got one too.”
38 Comments Comment
Leave a Comment
http://daphnecaruanagalizia.com/2009/05/muscat-wanted-the-state-to-buy-his-car-and-give-it-back-to-him/
Imma l-aqwa l-500 Euro zieda ta’ GonziPN. X’misthija ta’ ragel qarrieqi.
This is not really a refund of VAT but en ex-gratia payment.
Dr. Muscat is not keeping the promise he made in so far as the refund of incorrectly paid VAT is concerned, but he is merely paying lip service.
Or rather, Dr, Muscat has given some of us Euro110 to ‘buy’ our votes one week prior to the upcoming MEP election.
The VAT refund is being financed by the sharp increase in car licence fees. Why is nobody mentioning this?
Muscat deceives people when he claims that he wants to leave more money in people’s pockets. The increase in car licences is an added cost for families and businesses.
U lil poplu jnaqaslu l-petrol b’2 cents u jtieh ic-childcare b’xejn halli l-mara tmur tahdem halli tlahhaq mal hajja! Viva Joseph taghna! Ghax jien nafdah!
Hu go fik poplu
By the time his term is up, he will become a big, fat rich Mintoffian. Once he declared that he was inspired by Mintoff; well now he is putting it into practice.
He already is a rich fat Mintoffian.
In today’s Times of Malta (pg 6) he was quoted as saying that he used his car to save people taxes. I don’t know whether to laugh or cry. B’mid irid jitnejjek dal-bniedem?
Bil-mazzun kollettiv li jikkostittwixxi l-poplu Malti.
Tnejjek b’ 36,000 switchers
Despite all the funds injected in the island’s education system by successive PN governments, Malta remains simply a case of ‘where ignorance is bliss ’tis folly to be wise’.
So he is practically selling (not leasing) his car to the state, gets more than double its price in 10 years and gets to keep it? Sorry, my business dictionary doesn’t come up with an explanation of such schemes.
But this man has no sense of future, he forgot that one can fool the people for some time, but NOT all the time.
Ara vera wiċċu u sormu l-istess!
Who knows how many hidden deals maybe never uncovered?
Daphne, well done for revealing this probably small tip of the iceberg of Muscat’s insufferable hypocrisy.
If Daphne has managed to reveal Muscat’s hypocrisy on this, I would now expect the Nationalist Party to keep up the pressure and remind the electorate for the next 4 years if need be.
So the refund of Euro110 is another “ex gratia” payment, yes, another handout to blind us to the present economic downturn and blow-out in government spending and rife nepotism.
It’s like a pyramid scheme being played out on the basis that the more money being flashed about the sounder the economy must be.
http://www.timesofmalta.com/articles/view/20140520/ep-elections/fknk-endorses-joseph-cuschieri.519808
Could this save Cuschieri next Saturday ?
I’ve always held that the most alarming thing about Muscat is his extraordinary love of money; he never has enough.
This makes him admire, befriend and adopt as role-models people who are very wealthy, rather than those who have principles.
It is worrying because his position makes him a prime target for persons, companies and even states who would think nothing of corrupting a politician to obtain what they want.
Money is his weakness.
Some more EXCLUSIVE analysis.
Last March, while Malta was distracted with same-sex couples adoption, the LNG tanker in Marsaxlokk, and Joseph Muscat’s imminent cabinet reshuffle, Muscat was engaged in another exercise of incompetent governance, the scale of which is not yet fully clear, but of which there are very strong signs. It is time to revisit the act.
Please bear with me.
On 11th March the government announced the signing of an “agreement on Chinese equity investment in Enemalta.”
http://www.timesofmalta.com/articles/view/20140311/local/agreement.510236
Perhaps it escaped everyone’s attention that this event occurred one year – almost to the day – since Muscat came to power. A pre-electoral deal with a very well defined time-frame, perhaps?
For the solemn occasion, the government called a press conference in the presence of several high profile witnesses, including the Chinese Ambassador and the prime minister. There was also another ‘rare’ public appearance by Louis Grech, the Minister in charge of the ‘Implementation of the Electoral Program,’ even if the involvement of China in Enemalta was not in Labour’s electoral program.
In the press conference, ‘Positive’ Energy Minister Konrad Mizzi said that the deal with China will be concluded by September 2014 and that it will be taken to Parliament before then.
Quite rightly, the opposition has reserved its comment until the Minister makes a statement in Parliament.
But there are a number of matters which deserve the attention of the media (and the opposition), now that things are focusing back on electricity.
Some background first.
See the next comments in sequence.
1. A deal shrouded in secrecy
The Muscat-China deal on Enemalta has been shrouded in secrecy since it was first publicly announced in September 2013. And the secrecy about it may even have started before.
In April 2010, during a visit to China, Muscat, then still Leader of the Opposition, signed a secret memorandum of understanding with the Chinese Communist party on cooperation between the two countries. The deal was first published in a Chinese newspaper, and then it was reported on this website before Muscat had even returned from China. Later Muscat wrote about it in ‘l-orizzont,’ where he said that the deal involved co-operation on energy and other issues. At the time, the deal raised some eyebrows only on this website, but nobody had adequately assessed the political significance of the deal.
A few months after becoming prime minister, in September 2013, Muscat travelled again to China “for a Davos meeting.” But while away from the scrutiny of the independent Maltese media, he signed another memorandum of understanding with China which was reported in Malta as follows:
“Chinese company to inject ‘tens of millions’ in Enemalta and become minority shareholder” – The Times
http://www.timesofmalta.com/articles/view/20130911/local/china.485621
“Chinese company to become minority shareholder in Enemalta” – The Malta Independent
http://www.independent.com.mt/articles/2013-09-11/news/chinese-company-to-become-minority-shareholder-in-enemalta-2555805696/
“Malta secures China cash injection deal for Enemalta” – Malta Today
http://www.maltatoday.com.mt/news/national/29798/new-chinese-agreement-to-see-direct-cash-injection-in-enemalta-20130910
Muscat said it was a “strategic partnership,” suggesting a long term process under which China would come to the rescue of Enemalta through restructuring and management changes that would turn the corporation around.
The deal was highly questionable because the government did not issue an international expression of interest for the sale. In failing to do so, it had not appointed experts to set out the government’s own strategy for Enemalta which would have defined the nature of the call for expression of interest. The government was also criticised for privatising Enemalta to another sovereign state. The choice of China came also under fire.
At the time, the understanding given to everyone was that China was investing in the equity of debt-laden Enemalta – which prime minister Muscat even described as a bankrupt company – and that this would provide Enemalta with the cash it needed to pay off the bank loans and put Enemalta on a strong capitalisation basis.
It was understood that China would take on itself a share of the burdens of Enemalta – the good and the bad.
No information was released about the precise amount of the investment or the extent of Chinese shareholding in Enemalta in September.
Subsequently, Edward Zammit Lewis, now Minister for Tourism, let the cat out of the bag when he said that China would control “around 35%” of Enemalta.
http://www.maltatoday.com.mt/news/national/29961/chinese-company-to-control-around-35-of-enemalta-zammit-lewis-20130916
The percentage, which means “one third” in ordinary parlance, was dismissed immediately as “a hypothetical figure” by Konrad Mizzi.
http://www.maltatoday.com.mt/news/national/30240/workers-looking-forward-to-a-new-enemalta-energy-minister-20130927
But when the details of the deal signed on 11th March emerged, it was confirmed that China will acquire a 33% stake in Enemalta, and that Zammit Lewis’s percentage was more than just “hypothetical.”
http://www.maltatoday.com.mt/news/national/36735/malta_and_china_to_sign_energy_deal_today__
2. Details of the deal
On 11th March, it was revealed that the deal consists of a Chinese investment of Eur 320 million, but that this was not all going into the capital of Enemalta. Instead, it was to be broken down as follows:
(i) China will acquire 33% equity in Enemalta for Eur 100 million.
(ii) China will buy “a majority stake” in the the BWSC plant which “will be hived off to a separate company” (The Times), for Eur 150 million. In the absence of other information or a contradiction, it can be safely assumed that this will be a 100% investment in the BWSC plant.
(iii) China will spend Eur 70 million to convert the BWSC plant to run on gas. Once again, in the absence of a contradiction, it can be safely assumed that this investment will take place in the hived-off separate company which will own the BWSC plant and which will be 100% owned by China.
The government has said that the petroleum division, which is a profitable business, is not included in the deal signed with China.
3. Can you see the “fraud”?
1. China has bought one-third (33%) of Enemalta for only Eur 100 million, not for Eur 320 million. CHINA HAS INVESTED ONLY EUR 100 MILLION IN ENEMALTA (excuse my caps). China has acquired an important position on the board of Enemalta for only one third of its investment sum.
2. China has acquired a majority (most probably 100%) – but definitely not 33% – in the brand new BWSC plant, Enemalta’s only new power station, and the only one which will survive the current changeover to gas. China will be investing Eur 220 million – two thirds of its announced investment – in a company which will be under its majority (possibly total) control. None of that Eur 220 million is going in Enemalta.
3. In the electricity business, Enemalta is now left with two old power stations – Marsa and Delimara 1 – both of which are scheduled to be closed down when the gas plants come into operation according to the government’s plans. Enemalta is also left with the Delimara chimney, which Muscat said he will have demolished.
4. It can be concluded that 100% of Enemalta (excluding the Petroleum division) is now worth Eur 300 million (33% acquired by China is valued Eur 100 million, so you can work out the 100% yourself). But, if instead, the Eur 320 million was fully invested to acquire the 33%, the 100% worth of Enemalta would be close to Eur 1 billion.
5. Muscat says that Enemalta’s debt has been reduced by half, which should be Eur 400 million based on earlier government declarations. What he does not say is that Enemalta will now have no sustainable long-term electricity generation capability because the BWSC plant has been sold.
6. After reducing Enemalta’s debt as he claims, Muscat sold one-third of Enemalta for only Eur 100 million. Back in October 2013, when Enemalta still had around Eur 800 million of debt, we were all made to believe that China would be investing at least Eur 200 million in Enemalta with that level of debt. So based on the information which was circulating in September 2013, it can be concluded that, now, with half the debt, Enemalta has half of its value (had China obtained 35% of Enemalta for Eur 200 million, Enemalta’s value would be Eur 600 million). How is that possible, when it should be the other way round?
7. China has effectively invested only Eur 100 million for one-third (33%) of a corporation that now has only Eur 400 million of debt. So China has not assumed one third of debt of Eur 800 million, as we were made to believe in September 2013.
4. China the asset predator and Muscat the asset stripper
A deal like this is not a strategic partnership. This is an exercise in “asset stripping” – a “negative energy” term used in business to mean the selection of profitable strategic assets which are sold, leaving the company with its problematic assets and debts. China has strategically chosen which assets to acquire for the price it paid, leaving a small residue of Eur 100 million into the corporation for which China obtained one third of the corporation, giving China enough ability to exercise some control over it, including over the inter-connector. China has risked only Eur 100 million in the debt-laden Enemalta, and this only after Enemalta’s debt was reduced to Eur 400 million.
China’s other Eur 220 million will be invested in a company which will own the brand new BWSC plant and which will presumably have no debt.
Bottom line: China has invested in securing the BWSC plant in a separate entity which it will own, probably 100% – and not in securing Enemalta’s future.
5. China taking over Malta’s electricity generation capacity
The deal as clarified in March 2014 is very different from that suggested in October 2013, but the unsophisticated public will not have noticed this .
Answering questions by The Times, Joseph Muscat denied that the sale to China was a privatisation because the government was retaining the majority of shares in Enemalta and China was only taking 33%.
http://www.timesofmalta.com/articles/view/20140313/local/enemaltas-deal-with-china-is-not-privatisation-prime-minister.510483
In practice, this is not true.
This is a privatisation of Enemalta’s only viable power station plant – the BWSC plant. In substance, Enemalta’s electricity generation division has been privatised (hived-off) by stripping Enemalta of its main asset and leaving the division burdened with the old Marsa and Delimara 1 plants which will be closed down soon anyway.
At the same time, China still secured, but for only a fraction (less than one third) of its investment, one third of Enemalta, which has the state monopoly over electricity in Malta.
It is unequivocally clear that when the deal is concluded by September, the bulk of Enemalta’s present electricity division will be gone, and it will be controlled by China as a majority shareholder.
Meanwhile, it is still not clear who is behind Gasol plc, the company which will own 30% of the new gas powerstation (which will, presumably, be acquired from Siemens). It is possible that China is behind the main (majority) shareholder of Gasol. In which case, China would also be controlling 30% of the new gas powerstation and consequently the majority of Malta’s power generation capability.
6. Conclusion
Either Muscat is hiding the naked truth, or he is so much out of his depth not to be aware of what is going on. China has taken over the control over Malta’s existing electricity generation and has positioned itself to control 30% of the main buyer of all future electricity coming into Malta – Enemalta.
Of course, China being a corrupt country, we will never know what deals are negotiated back in Shanghai by the Labour party or its representatives. This makes the need for the media to pressure Muscat to publish the MOU signed in China in 2010 ever more urgent.
We should be worried because of the lack of transparency in the whole process.
And we should be worried because Muscat has privatised a vital utility monopoly to another sovereign state, giving that state a strategic control over Malta’s sovereignty. This is not only worse than Alfred Sant’s deal over a quay in the Cottonera which brought his government down in 1998. Muscat has gone down the path of privatisation without liberalisation. This is diammetrically opposite to what he preached in opposition, in those days of “Ghaqal fit-Tmexxija.”
http://www.maltatoday.com.mt/news/national/7588/much-privatisation-but-little-liberalisation-joseph-muscat-s-new-year-address
“And we should be worried because Muscat has privatised a vital utility monopoly to another sovereign state, giving that state a strategic control over Malta’s sovereignty.”
To add insult to injury, it’s another sovereign state known for the corruption of its officials, blatant disregard for human rights, and which hides behind cultural relativism to ensure it will never become democratic. Not the kind of state you want to have leverage.
And, the public surveys show that Muscat is trusted more than Busutill. I can’t understand the Maltese mind.
The friendly face from SuperOne. Which is why Dalli and Gouder will get elected.
Mintoff – a Labour Party Leader and millionaire.
Joseph Muscat – a Labour Party leader soon to become a millionaire who has the same values, as he himself said, as those of Cyrus Engerer.
I remember him on Bondi+ defending himself for being on the list
https://www.youtube.com/watch?v=Q7KfZ3egKPs
Ciccio has presented a good and analysis of the situation however he left one very imlortant point out, which is that if the PN is returned to power after 5 years PN would not be free to choose electricity supply for the country but PN would be blackmailed by the chinese making their governance very very difficult helping PL back to government.
Or conversely, China would have a direct interest in keeping Labour in power and would thus prop up their stooges in Malta by any means necessary.
And he also gets that residual value of the car once he sells it at the age of 12 (he bought it in 2007).
Ghandek tkun taf, Daphne, li biex ixxejjer bicca karta ta’ cekk li qatt ma kellek trid tkun veru suldat tal-azzar ghax kieku kif ser tkun tiflah ghal dawk is-snin kollha Joseph jghaddi z-zmien bik.
Still much cheaper then our former pm’s bmw!!! :)
http://www.timesofmalta.com/articles/view/20130502/local/Ex-PM-s-car-repairs-cost-more-than-58k.468014
[Daphne – That’s the cost of repairs, Marvin. You are not comparing like with like. Muscat’s car is repaired too (there were photographs of one such repair job on this website), and with a car that’s already seven years old, repairs and parts are not cheap. The trouble is that The Times have not ‘learned’ how much repairs to this PM’s car have cost yet.]
One simple question : Did he declare this income when he became prime minister?
Did he declare the petrol allowance and the €7,000 in his Income Tax form?
People who live in glass houses shouldn’t throw stones….
P.N lost the election due to overwhelming corruption in everyone’s face. Now with a flick of a switch P.N is all righteous and demonizing P.L .
If P.N continue depicting P.L as all black and P.N as all white, means the lesson hasn’t been learnt.
[Daphne – The PN lost the election for the same reason some wars broke out in Europe in times past: ‘the people were restless’. Boredom and the need for excitement are great motivators in general elections, Socrates, which is why middle-aged people – especially those with problems in their lives – always account for a significant shift. Corruption tends not to be a factor in Maltese elections, which is why Labour won in 1976, sort of won in 1981 and almost won in 1987. It’s jealousy that does it, and never make the mistake of confusing jealousy with disapproval of corruption. With a little bit of thought, you will see clearly that when people express anger at corruption, what they are really expressing is their annoyance at the fact that others, and not they themselves, are benefitting from it. Maltese people are not Swedes.]