“Labour seems not to understand the market, and its reaction to the Brazil company is a clear indication of this”
A reader sent me the email which I reproduce below. “Labour seems not to understand the market”, he writes. Quite frankly, should we be surprised?
Labour’s business forum chief is Marlene Mizzi, the owner of two small shops which sell toys and an even smaller one, in Rabat, which sells cat suits and similar apparel for unsuitably dressed 60-year-olds. Her toys are delivered by the chauffeur-driven limousine which the state provides to her husband the magistrate, while she spends most of her time talking misspelt bollocks on Facebook and posting pictures of dolled-up kittens.
Labour – always a thoroughly professional outfit.
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Dear Daphne,
I was disgusted to see a video mocking the Brazilian company that has relocated to Malta on none other than the Leader of the Opposition’s Facebook page.
It is appalling that Labour, just a couple of months away from becoming the new government, is seeking to create a political controversy out of a business that has brought its administration arm to Malta.
This small country is facing increasing pressure from competitors who want to attract the financial services business that we have got. The last thing we need, with the polls all showing that a Labour victory is a dead cert, is an incoming government which doesn’t know whether it is coming or coming on financial services, and which makes it clear that it hasn’t got a clue, despite all those economists it appears to have on board.
Malta has become an attractive place for investors to set up shop. We’ve got good fiscal benefits, a healthy economy, strong banks, membership of the European Union and the Eurozone (and Labour’s scepticism on that is another problem), good infrastructure, and sound regulation.
The Brazilian company being bandied about is not my client, but the structure is fairly easy to understand if you are not a member or politician of the Labour Party. These companies registered in Malta are subsidiaries of large international operations. The Malta base has a small structure of support staff, rents offices or uses a professional office for its purposes.
Yet these companies, despite being ‘small’ in terms of staff numbers, use extensive ancillary services of lawyers, accountants, tax consultants, hotels, restaurants, real estate rental, car rental, and above all, they leave a significant amount of tax revenue in Malta because they pay their taxes here.
That is, in fact, the point of them.
Is the PL unaware of this structure and the great benefits to Malta? Has Labour not yet realised that today’s economy is not that of 20 years ago, still less that of what our next finance minister, Karmenu Vella, calls the Golden Years of Dom Mintoff?
Most of Malta’s money now comes from service industries. The work is good, the jobs are plentiful, and above all, it’s high-value-added, so there are no huge factories or massive cargoes of raw materials that need to be shipped in for manufacturing.
We are no longer going have companies that employ 500 people making jeans. Instead, we have companies which employ four to 20 people directly and hundreds of others indirectly, while leaving significant tax revenues in our coffers.
This is the new economy we have achieved and which we are trying to develop further: a knowledge-based economy. I and my colleagues are thankful that this government and previous Nationalist governments had the foresight to invest in education, providing the industry with highly qualified accountants, accounts technicians through MCAST, and IT professionals, and yet still we do not have enough of these to service all our clients.
I’ve actually heard people say, repeatedly that the Nationalist Party and the Labour Party have a common agenda on financial services, and so it doesn’t matter that Labour are getting into government now. I don’t believe this to be true.
The PL votes in favour of financial services legislation put forward by the government, but there is a significant difference in the way the parties look at the industry.
The PN understands the market, works hard to provide the industry with a sound legal framework in which to work and grow. The PL seems not to understand the market, and this reaction to the Brazil company is a clear indication of this.
We are receiving queries from foreign investors asking us what is happening and what the Labour Party’s position is. They want to know because reports of all the polls and surveys tell them that Labour is going to win the election.
Yet Labour doesn’t understand how quickly these companies can pack up and head off to our competitors. Maybe then they will realise the positive effect that these companies have on our economy, when it is too late and they have gone elsewhere. Perhaps then they will stop asking that most banal of questions, “Imma kemm qed timpjega nies?”
Thank you.
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So bad were the Mintoff years that it is only now that Borg Olivier’s plans for Malta are bearing fruit. God bless his soul.
Hear hear. Gorg Borg Olivier was the real architect of modern Malta, something which even most Nationalists forget.
[Daphne – Will you please stop referring to him as ‘Gorg’. He was either George or Giorgio, never ‘Gorg’, except to his buddies on a bench at Fond Ghadir. Gorg, indeed.]
How right you are. GIORGIO was the founder of Malta as we know it today.
What he got from his colleagues, apart from five, was a betrayal that should put to shame all those who participated.
Those were the days when Nationalists were true Nationalists not opportunists like the present ones.
He died in debt and abandoned, but for the few who still loved him, and still do.
It had to be Mintoff and a Labour government to give him a state funeral.
Malta should have a square, in all it’s towns and villages, named for him.
[Daphne – Of course it had to be Mintoff and Labour to give him a state funeral, Silvio. They were the ones in power in 1980, when Borg Olivier died.]
They were not obliged to give an ex prime minister a state funeral.
They did it because he deserved it.
[Daphne – No, Silvio, he wasn’t given a state funeral because he was an ex prime minister or because he personally deserved it, but because he was the prime minister who successfully negotiated for independence from Britain. This government then made the mistake of thinking that it should reciprocate by giving a state funeral to Mintoff, but reciprocation should not enter the equation with these matters. Mintoff did nothing to merit a state funeral, rather the reverse, and should never have been given one. Individuals should not be given state funerals because they are or were popular. That is Banana Land thinking, which is why Eva Peron got one.]
The person who sent the email to Daphne (no name provided ) seems unaware that this Brazilian company has called it a day, and TODAY, 9 November is the last working day of the last employee of 4 employees who had been employed for a few months, the last one was employed in August 2012 !
But Dr. Gonzi had tried to fool televiewers into believing that this company has been employing many workers for at least 1 year, when he already knew that it had already decided to leave ! No wonder Dr. Gonzi’s “Brazilian Bubble” blew up in his face within hours of the Xarabank debate !
Ghoxrin Punt: Intelligent people will surely have realized that Lawrence Gonzi had tried to dupe them on Xarabank, after they got to know more details about this Brazilian company which Lawrence Gonzi still lacks the courage to mention its name !
“We will let you work. This is the basis on which economic growth should be built”, said Opposition Leader Joseph Muscat to entrepreneurs …
.www.di-ve.com/…/we-will-let-you-work-joseph-muscat-entrepreneur…
Joseph Muscat and his empty words which will mean nothing in practice.
Little Joey hasn’t ‘worked’ a day in his pampered life.
Ever seen his sleeves rolled up? No, his shirts don’t have sleeves. His arms are too short.
You think Dalli has embarrassed Malta? Wait till this naive little boy represents us on the international stage.
Harry Purdie: Why don’t you write your stupid comments on The Times-on-line ? Or are you scared of the backlash ?
Good old command economy Labour. Plus ca change, plus c’est la meme chose.
And come 1st quarter next year, it looks like we’ll all be merrily going to hell in a handcart.
Yaaay.
I have to agree with this person’s view as I am living through the exact same thing right now with my current and prospective clients.
This industry can be a very fickle one as countries like Ireland have seen, and the mere indication of something amiss is enough to make them move away.
Joseph Muscat keeps talking about better jobs for the Maltese and that a minimum wage freeze is acceptable because he wants people to earn more than the minimum wage, in jobs that pay more than the minimum wage.
The tragic thing is that with the actions of the people around him, he is going to scare away those companies that will pay significantly more than the minimum wage.
These companies are not the factories employing 500 or 1000 people; those factories move to China and India in order to pay pittances.
The high-paying companies are those that employ 4 to 20 people and are in Malta only because we are part of Europe and because our Regulator the MFSA is a business-minded regulator which understands what the industry needs to create the jobs and wealth.
If only Labour were to pay attention to what the market is doing, and listen to the industry representatives, they would not be casting any doubt on an individual operator whose only misfortune was to be at the back end of Joseph Muscat’s ignorance and lack of preparedness.
Eddy? …. Are you out thre, Eddy?
He is at S Rita.
Monte bello and Giovann DeMartino: I’m here enjoying the spectacle of GonziPN fanatics consoling each other. And fleeing from other comment boards where they may face a barrage !
Labour ridicules the government because this particular company employs just four people.
There are actually loads of small foreign companies doing administrative work here and they are very good clients for various service providers.
When counted together these companies are giving a huge contribution to our country.
This is the secret of little Malta’s economic success and resiliency during these times. As usual the PL has no clue.
It’s the same in other sectors, Piano’s designs have provided the opportunity to work on some real juicy stuff, using seriously advanced technology, networking with global players in the field and here they are calling it a waste of money.
The same with manufacturing and hi-tech engineering, few are aware that a formula one car has its components tested and analysed in Malta, before being sent via courier to the team.
*cat siuts, please, Daphne.
Big foreign companies who may be planning to relocate to Malta in the near future will now think twice if Labour is elected thanks to all those unseemly theatricals re the Brazilian company made on the Labour media.
The mood in the country will change overnight if the PL is elected to government.
Within two days, until the outcome of the elections is known nothing would have changed financially, no economic revolutions but FEAR of the unknown would take over.
By unknown I mean the no policy strategy which the PL would put into effect. They only have empty words as a vision for our future.
Aunt Hetty: The theatricals were seen on Xarabank , being made by Lawrence Gonzi on the Brazilian Bubble, which blew up in his face after a couple of hours !
Seeing some of the comments on The Times, I’m not surprised at the utter ignorance of the paradigm shift gaining momentum.
Pamela Hansen took it upon herself to criticise the media regarding the lack of detail to Odebrecht. She said it was the media’s role to give government a run for its money.
If she won’t understand what’s going on, how can her readers? Four years of waiting for Joseph and his amazing solutions, bluff and drama, and the action was elsewhere.
No doubt where the snide scepticism to statistics arises. Pathetic.
After reading this email I got more confused.
How exactly does a company which employs just 4 persons leave a considerable amount of revenue?
How much ancillary, lawyers, consultants, hotels, restaurants, car rentals etc can this kind of company use? All this in the view (according to the Times) that this company is packing up, since the crisis in Libya is slowly being drained.
[Daphne – Because every little makes more, Joseph. If you spend any time at all in Sliema and St Julian’s, you will see exactly how.]
It is exactly the fact that you do not understand that companies like this, when aggravated together, leave a very significant economic impact that is the problem here and the point of Daphne’s article. You just don’t get it.
The contribution from service companies over these last 3 years is what has been a major part of Malta not feeling the recession in the same way as most other countries. Every drop helps, apart from other factors.
In Italy they say “Molti pocho fanno assai” .
By way of example, a software development company employing just a few specialists in Malta can still pay millions in taxes in Malta – which will not be claimed back – simply because the development work done in the company’s head office (overseas) is declared in Malta instead (when the VAT rate in Malta is lower than elsewhere).
According to Labour, these companies (which fill Malta’s tax coffers without requiring factory land, without polluting, without subsidies, etc.) are less desirable than the textile sweat shops employing dozens or hundreds of slave-labourers.
You would be amazed how they manage to. You might want to ask this question of one of Labour’s new young hopefuls who happens to work in this sector.
It’s where he is earning his considerable bread and butter
Daphne: But this is not what Dr. Gonzi wanted people to believe, namely, that this was just a small , back-up office operation, as Tonio Fenech has now said. He wanted to dupe televiewers that this was a very big company which had brought its HQ to Malta and has been employing lots of workers for 1 year ! When, he knew it was just a back-up office operation which was closing down in a few more days !!!!
Anki hanut tal-pastizzi ihaddem 4 min-nies !
Labour talks abut priorities. Its priority now is to denigrate the reputation of Lawrence Gonzi at all costs.
Labour does even if it causes harm to the economy. Is it a shortsighted tactic? We will know that soon.
I agree with you that the PL tactic might harm the economy but it was Gonzi who mentioned it in the first place… Ezagera to win Xarabank Challenge! We need responsible ppl up there, we need a third party!
[Daphne – And gosh, we need lots and lots of grown-ups who save their precious time and energy by writing about ppl.]
This email is just spot on and could not have painted a better picture of the current situation.
Unfortunately, just under 50% of the population are morons and another 10% are egoistic, spoilt brats. The problem with democracy is that it favours the lowest common denominator.
Se nkunu ‘Safe ghall-business’.
Yeah, whatever. I can vouch for every word written by the person who wrote this. If Labour is in government I will want to listen to the chants of ‘Viva l-labour, viva l-labour hey hey’ of those losing their jobs.
You never know what you’ve got until it’s gone.
I sincerely hope that our “floating” voters will realize what their “float” will mean in the forthcoming elections.
I am more than convinced that if Labour wins the general election, Malta will come to a standstill in a matter of weeks.
Giov. DeMartino: I am looking forward to see you post your above comment on The Times -on-line. Wear a steel helmet when you do !
Age is playing tricks on you Giovann. Suggest you give up watching Net TV and reading In-Nazzjon. You’ll feel much better.
This remindes me of the early Fenech Adami years as Prime Minister.
After each visit he made abroad the grumpy Socialists back then repeated ‘Imma kemm gab flus minn hemm ?’
That’s because his predecessor used to forget that he’s the prime minister and act as a busker and beggar.
And what did he give in return?
“Is the PL unaware of this structure and the great benefits to Malta? ”
In a word, yes. The Labour Party’s idea of investiment barrani is large factories employing hundreds of badly paid, easily replaceable, semi-skilled staff.
Foreign Direct Investment, labour style, is measured in terms of the number of people the investor employs directly. No new employees = no returns for Malta. Gino Cauchi said as much two nights ago on Net TV, accompanied by much-practised hand gestures.
I don’t know which is worse. Labour’s core beliefs and poor understanding of the real world, or their lack of insight and self-awareness.
Nista nimmagina kieku GonziPN gieb f’pajjizna kumpanija bhal ST Microelectronics, li ghadha l-pilastru ewlieni tal-esportazzjoni f’pajjizna !
Such companies are welcome – if they really stay here.
However the ‘political’ issue is, WHY did the PM even cared mention such ‘investment’ – since evidently there were and still are a number of such companies being registered – albeit not Brazilian.
The problem is how the local politicians (limited in objective grey matter rather than in numbers), go about plying their ‘trade’ ooops vocation. Is this Brazilian company the highlight of all the strategic vision communicated following the exchange of ideas between the current PM and probably the next PM?
A Spring cleaning is well overdue, on both sides, and hopefully a third voice in parliament – which however the PNPL duopoly strives to delay, with the unrepresentative inflated electoral threshold.
in the meantime, roll on the childish ‘debates’ and billboards…
RESTEPC for this comment. You put your finger on the government’s problem.
They’re too eager to please with titbits of feel-good info, which are then hyped to high heaven, way beyond reality. Lawrence Gonzi’s communications chief should have been sacked long ago, the moment he handed out a long list of “wettaqna” items to his boss in lieu of a real speech.
Agreed, the tone is condescending.
Then there’s the childish terminology, ‘postijiet tax-xoghol ahjar b’pagi tajbin’, when the company in question does its own design, testing, validation and certification in house, is inadequate.
Last Friday the PM put some emphasis, his words, on the fact that local SME’s have resorted to credit from local banks to invest in their evolution, unprecedented hints of an organic, autonomous system. It’s what we want to hear.
It might make sense to take the Prime Minister’s comment in context in which it was made.
I certainly do not remember there being a big hoo-ha about this company coming to Malta, which possibly meant that the Prime Minister might have referred to it as an example of what and who is coming to Malta.
I do not put it past Joseph, and Labour, to try to find the xaghra fl’ghagina as they say, except this time they just fell flat on their face, at least in the eyes of intelligent people.
Gino Cauchi for FDI minister!!!! Dik il-kumpanija kellha biss ufficju tas-Sliema.
Well, we’ll just have to rely on Gino Cauchi’s patronage of Sliema restaurants, then, won’t we?
Gino Cauchi
Yesterday
The Times dalghodu qed tirraporta li, l-famuza kumpanija kbira braziljana li sa nhar il-gimgha kien qed jaghjjat biha Lawrence Gonzi, u li skond hu kienet ilha sena, fil-fatt kienet ilha hawn sitt xhur biss. taw l-impressjoni li ser timpjega hafna haddiema u sar maghruf li fil-fatt kumpanija impjegat maghha 4 persuni biss. Kellha biss ufficju tas-sliema…dak investiment. u fuq kollox rrapurtaw diga ddecidew li jitilqu.
M’hemmx bzonn aktar kummenti.
Imma Kif qatt ma jitghallmu dawn in-nies?
Jahseb li qieghed jitkellem ma l-abbatini fis-sagristija jew?
It was a foul by Gonzi. Admit it.
You do not call a company which employs 4 people a major investment in the country….
Tal pastizzi jhaddem nies iktar ukoll…
If PN had a new leader they might have a chance to win. With Gonzi it is a guaranteed defeat. Gonzi is labours best asset, just like Sant was the best asset for PN.
[Daphne – Really superior reasoning, Mr Seychell. Tal-pastizzi does not bring money into the economy in the form of tax revenue or create business for others. Remind me, what is it you do for a living?]