Regulating Party Finances

The Malta Independent 

 
The Treaties of the EU expressly acknowledge the role of the European political parties as important factors for integration. The Treaty of Nice, which entered into force on 1 February 2003, stipulated that the statute and financing of political parties at European level should be regulated. The Treaty changed the decision-making procedure on this issue from unanimity to qualified majority, and gave co-decision - as well as registration - powers to the European Parliament.

Now that we have decided to adopt EU standards for regulating the most trivial matters of the way we do things, I trust there will be no resistance in adopting EU benchmarks also regarding party finances.

Political parties are the backbone of our democratic system.` Parties spend hundred of thousands liri each year just to keep their operation going. They made, and in the case of the PN continue to make,` substantial capital investment in immovables and equipment.` Each year they have to run expensive elections at local level and once every five years, at least, they have to meet the exorbitant cost of running` general elections.

Political parties source their revenues from three main sources. Membership fees collected annually, fund raising leisure activities, and donations. I could have included a fourth in the form of commercial profits earned by subsidiary commercial enterprises. These are` engaged in exploiting a loyal captive market through provision of services in media and travel. However, I am under the impression that such commercial activities are more a drain rather than a source to central finances at least on a cash flow basis.

Of the three sources identified donations by far constitute the largest source of income for political parties. It here that the issue of democratic governance comes in. Are the interest of democracy prejudiced by allowing political parties, as the principal mechanism for execution of democracy, to raise their finances by private handouts beyond any democratic control? 

 Both main parties try to give the impression that such donations are collected in the form of small donations from their followers on a no strings attached basis. In the absence of any serious regulatory controls doubts remain that this is just a fa`ade to justify a situation which is far less innocent. Stories about donations demanded or given which run into sizeable thousands abound. It is here that democratic governance risk serious offence as the larger the size of the donation the more difficult it becomes to justify its no strings attached status.

For as long as political party finances continue in their unregulated state the feeling will continue to prevail that the capital rich sector of the economy can use its resources to invest in giving political power to the party that best protects its interest. Living in a media dominated society it is a small step to deduce that whoever has the financial resources to dominate influential opinion forming sectors of the media, will gain a substantial electoral advantage over adversaries who do not have access to similar financial resources.

The need for democratic governance through controlling the way political parties finance their activities is loud and clear. The EU has acknowledged and is addressing this need. It is time that we acknowledge it too by setting an autonomous Commission to study the situation and submit recommendations.  

To my mind once citizens pay their taxes it is fair to expect that political parties get the finance they need from the state in whose service they exercise their democratic role. State financing would bring in two disciplines. Control over the way the money is spent to ensure that it is used for the approved purpose and the abolishment of all forms of donations, large or small, to ensure that citizens are not subjected to indirect taxation or are tempted to make donations in the form of an investment to be traded for political favours.   

Ibati z-zghir

L-Orizzont 

It-titli principali ta’ l-Orizzont ta’ jumejn ilu kienu interessanti tassew u ta’ min jirrifletti dwarhom.

L-ewwel titlu kien jghid li l-FOI qed tilmenta li l-paga minina f’Malta hija gholja zzejjed u li din ghandha titbaxxa biex il-pajjiz jerga’ jikseb il-kompettivita’ ma pajjizi barranin specjalment ma pajjizi tal-lvant ta’ l-ewropa li bhalna dehlin membri fl-UE u bhalna ser jikkompetu ghall-investiment barrani. It-tieni kien jghid li l-gvern Malti mhux fi hsiebu jaghmel referendum iehor biex japprova l-kostituzzjoni ‘l gdida ta’ l-UE li qed tigi mohmija mill-konvenzjoni ta’ Giscard d’Estaing li eventwalment tigi approvata mill-membri ezistenti qabel ma jsir it-tkabbir f’Mejju tas-sena 2004.

Nibdew mil-ilment ta’ l-FOI dwar il-paga minima. Huwa fatt li pajjizna jehtieg ikun kompettiv. Huwa fatt li pajjizna mhux jigbed lejh investiment gdid li johloq ix-xoghol. Huwa fatt li l-ekonomija stagnata u hemm bzonn inizjattivi godda biex nibdew niccaqilqu.

Izda minn daqstant affarijiet li nistghu naghmlu il-krejattivita’ ta’ l-FOI twassalha biex tibda billi tghakkes lil ta’ taht net; lil min ga mghakkes; lil min tant huwa mghobbi li anke piz ta’ tibna jaf joghtru?

Jehtieg li l-FOI tkun aktar imagginattiva u ma nahsbux li l-kompettivita’ l-pajjiz jista’ jiksibha biss billi jghakkes liz-zghir. F’pajjizna ga ghandna problema socjali li qed tikber aktar milli nahsbu. Din il-gimgha stess hareg rapport li juri li 15% qed jghixu taht jew vicin il-faqar. Kull min qed jghix bil-minimum wage zgur li jaqa’ f’din il-kategorija. Il-minimum wage paragonata ma l-gholi tal-hajja u ma l-ezigenza ta’ socjeta’ li trid livell ta’ konsum li jhabbatha mal- medja ta’ l-UE, huwa baxx hafna u min qed bil-minimum wage effitivament qed qed jghix fil-faqar.

Mela x’se nsolvu billi nnaqqsu l-minimum wage? Se nkattru l-problemi socjali li ga qed jikbru. U l-FOI tahseb li l-unions jistghu b’xi mod jaccettaw xi haga bhal din jew forsi l-FOI tahseb li l-unions qeghdin hemm ghalxejn?

Mela ejja nuru aktar krejattivita’ fis-soluzzjonijiet li nipproponu u ma nsibux targets facli f’min, ghax dghajjef, ma jistax jiddefendi ruhu.

Jien nasal biex nifhem li ghandu jkun hemm diskussjoni biex naslu ghal ftehim dwar tibdil fuq il-mod statutorju kif jinghataw iz-zidiet ta’ l-gholi tal-hajja. Nifhem li fejn hemm haddiema f’union nistghu nersqu lejn ftehim fejn dawn iz-ziediet jigu negozjati mill-union fil-pakkett kollu tal-collective agreement halli kemm jista’ jkun iz-zidiet ikunu parti ftehim li jtejjeb il-produttivita’ halli b’hekk tigi mharsa l-kompettivita’ ta’ l-azjenda. Izda min mhux f’union u allura aktarx jigi mhallas bil-minimum wage ma ghandna qatt nitlquh ghal rihu biex jigi mghaffeg mil-forzi tas-suq. Il-minimum wage jehtieg li mhux biss tinzamm izda nizguraw li tibqa’ tigi mharsa fil-valur rejali taghha billi tizdied bl-gholi tal-hajja anke jekk nersqu lejn xi ftehim li zidiet ohra ta’ l-gholi tal-hajja ma jibqghux statutorji.

L-investiment lejn pajjizna ma nigbduhx bil-pagi baxxi. L-investiment nigbduh billi jkollna pajjiz efficjenti fejn nipproduci studenti imharrga li kapaci jaghtu lura fi produttivita’ gholja l-investiment li jsir fit-tahrig taghhom kemm waqt il-hajja skolastika u universitarja kif ukoll f’tahrig iehor li jinghata matul l-impjieg.

Pajjizna jehtieg jinvesti hafna fit-tahrig tal-haddiema anke dawk li ghadhom jahdmu biex b’hekk jitkattar il-kuncett ta’ employability u flexibility. Ghalhekk jekk se niddiskutu xi pjan nazzjonali biex inrendu l-pajjiz mill-gdid kompettiv irridu ma mmorrux ghal soluzzjonijiet simplistici li johoholqu problemi socjali kbar bhal tnaqqis fil-minimum wage. Jehiteg mmorru ghal affarijiet aktar serji u stabbli li filwaqt li jzidu l-flessibilita u jhallu n-negozjati tal-pagi kemm jista’ jkun fil-livell micro, fil-livell azjendali, ta’ l-ekonomija, fl-istess hin jizgura u jistimula li jsir investiment kontinwu fit-tahrig tal-haddiema. Din biss hija c-cavetta tal-progress, hekk biss nistghu nigbdu investiment serju lejn pajjizna. Haddiema mharrga u produttivi hija l-akbar attrazzjoni ghal investiment gdid.

U jekk indur ghal kwistjoni tal-kostituzzjoni ta’ l-UE rajtha stramba din li l-gvern qed isib diffikulta li jaqbel li anke f’Malta din eventwalment tghaddi permezz ta’ referendum. Mela issa referendum ma ghadux espressjoni demokratika tal-poplu fuq materja daqstanat importanti? U galadarba it-trattat ezistenti gie approvat permezz ta’ referendum allura kif kostituzzjoni gdida li tibdel it-trattat ghandna neskludu referendum?

Nahseb li ghadu kmieni biex tinsisti jew teskludi referendum. Ejja ha naraw ‘l ewwel x’se jkun il-ftehim ahhari dwar il-kostituzzjoni l-gdida u naraw kemm hemm divergenzi materjali mit-trattati ta’ bhalissa.

Izda jekk kif jidher, se jkun hemm divergenzi kbar tant li diversi pajjizi fosthom Spanja u l-Irlanda, ga habbru li huma se jfittxu mandat dirett f’referednum minghand il-poplu, hazin li l-gvern Malti jibda minn issa jeskludi lill- poplu minn decizjoni daqstant kbira. Jekk jigri dan zgur u malajr naslu fi stat fejn il-poplu jibda’ jhossu distakkat mill-Ewropa li kull ma tmur ser tibda tikkontrollalu hajtu.

Joining the Euro - and Others

Maltastar

 

Joining the Euro

In other candidate countries the debate on joining the Euro has already started. The main point of debate is not whether but when. The general opinion is that whereas the final destination of joining the monetary union is not in doubt, candidate countries should be cautious from accelerating their entry before their economic development converges better with that of existing euro countries. This cautiousness is also encouraged by the EU Commission itself.

The arguments made in favour of this cautiousness are basically two. As the economy of candidate members receive an efficiency boost through the influx of foreign direct investment, unless this improvement gets reflected in a flexible exchange rate versus their major trading partners it will be reflected through different inflation levels. Secondly the candidate countries are ill-equipped to take on the obligations of the Stability Pact of the monetary union. Their public sector still needs to make substantial infrastructure investment to bring out the country’s economic potential. So the prospect of neutral budget within the foreseeable future is unrealistic and would be a constraint on their economic development.

In Malta we have yet to witness any influx of foreign investment, something other countries have already experienced in the application stage. The prospects for such influx remain unclear. We need to hear the economic arguments of what benefits we will see through fast track entry into the Euro. Would it be the needed discipline to enforce the restructuring that we have long been avoiding in order to meet the rigid criteria for entry or would it lock us into a rigid exchange mechanism which will just add pain to the discipline of re-structuring unless we can really attract new foreign direct investment? These are the questions that need to start being debated.

Unfair Expectations

The point is sometimes made by pro-Labour writers, both from the grassroots through letters of opinion to the editor as well from high raking administration officials within the MLP, that contributors like me should direct their writings to other matters going on in society, in particular to the failure of government to expose the true facts before the elections, rather than to any self-criticism regarding Labour’s performance at last elections.

These are unfair expectations. Certainly I have no intention of letting government off my criticism or to avoid commenting on other aspect of Maltese life. However, it is only fair and reasonable that whoever loves the Labour Party in a selfless manner as I do, having always given and contributed but never taken or expected to take, use our talents to question what the vast majority of labourites whom we meet in the street question us.

In doing so we would be laying the foundations for future successes. If we pretend that nothing has happened and that we need not analyse and question what went wrong and should keep trying to discredit the government until we finally get the majority behind us, than we may have to wait an overly long time until our political adversaries mess up things to a degree that Labour gets elected by default.

This would be a pitiful strategy. We must aim to get elected on our own merits not by default of others. So we need to analyse and question. It is our duty. We owe it to the grassroots who were always ready with their hard-earned money to sustain the party whenever called upon to do so.

So somebody must explain to these grassroots why we have now accepted the people’s will about the EU but were not willing to do so before we had to go through a damascene conversion by spending another five years in opposition extending the PN’s almost uninterrupted tenure in government to 21 years.

Somebody must explain how a strategy, to merge the EU issue with the general election domestic issues, was chosen, when it was clear that the party’s interest (that of executing our policies through government) clearly demanded that these issues be separated as much as possible.

If anybody is uncomfortable with giving such answers they should at least not complain that such questions are made. Otherwise selfless activists like Gigi Gauci whose funeral was held on Monday morning, will continue to be deprived of their great ambition to see Labour in Government before they pass away.

 

Portfolio Performance

Strategy 1 No Risk Lm1000.571
Strategy 2 Medium Risk 990.030 (after Lm40 charges)
Strategy 3 High Risk Lm 980.00 (after Lm20 charges)
Strategy 4 High Risk For Curr. 1006.04 (after Lm40charges)

All quotes are net of withholding tax on profit or interest where applicable, and use latest available price quotes and rates on Saturday.

Strategies 2 and 4 gain from the strength of the equity prices last week. The greatest gain was made by Strategy 4 which is all equity based with a great bias versus technology and biotech shares.

Strategy 3 remained static as Maltacom shares stayed firm at 90c0. Strategy 1 accumulated interest at 3.5%.

No changes were made to the portfolio.