2.1.3. Attacking abuse
A Financial Management Monitoring Unit was set up to ensure that all entities necessarily administer
public funds within stricter financial control, discipline and cost effectiveness and to aid the Government
in reducing public spending.
In addition, a case in point where efficiency of the use of public funds is being addressed is the area of
social benefits. The fight against the abuse of social benefits has been intensified and a Benefit Fraud and
Investigations Directorate was set up within the Ministry for the Family and Social Solidarity on 1
November 2005 to carry out investigations in fraud of social benefits as well as in other areas of social
policy. Consequently, social benefits are more effective as they target better the most needy.
In order to strengthen the investigative powers of both the Tax Compliance Unit and the Benefit Fraud
and Investigations Directorate, amendments to the Income Tax Act (Cap. 123) have enabled the sharing
of tax and social benefits information.
In parallel with these measures, the Law Compliance Unit within the Employment and Training
Corporation (ETC) plays an important role in identifying any abusers of the social system by taking
action, amongst others, against job seekers who register for employment and simultaneously hold an
occupation.
2.1.4. Privatisation
As a result of a policy that dates back to the late 1980s in favour of privatisation, the role of the
Government in the economy has been significantly reduced. Conscious of the benefits arising from a
more structured and planned approach, Government’s efforts in divesting public assets have been recast
in terms of a privatisation programme within a White Paper published in 2000. The programme involves
the sale of high quality assets and aims to attract strategic partners which satisfy the criteria of price,
quality of business plan and employment safeguards.
Along the years, Government’s holdings in the direct productive sector have been largely privatised. In
the services sector too, a number of enterprises have been divested through sales of shares either to the
public or to strategic partners.
In 1999, Mid-Med Bank was taken over by HSBC Bank Malta plc. such that the Maltese Government is
no longer a shareholder in the bank. In 2002, the sale of 60 per cent of Government’s shareholding in
Malta International Airport plc and 35 per cent equity stake in Maltapost took place. The privatisation
process continued to progress in 2004, when the National License Lottery and Malta Freeport Terminals
Ltd. were also privatised. In 2005, Government sold a further 20 per cent of the shares in Malta
International Airport plc, privatised Sterling Travel and Tourism Ltd, and also Air Supplies and Catering
Co. Ltd. Subsequently, in 2006, the privatisation of a major telecommunications operator was completed.
In 2007, Government sold 74 per cent of its shareholding in an operating company licensed to carry out
towing activities within and between the harbours of Malta and divested 25 per cent of its shareholding
in the local postal services company. The latter was fully privatised in January 2008.
2.1.5. Growth enhancing measures
Within Government’s fiscal consolidation process, public expenditure is being redirected towards growth
enhancing investment in an effort to boost the economic growth potential of the local economy. Growth
enhancing measures mainly focus on industry and the labour market, tourism, and education in an effort
to increase Malta’s competitiveness.
Growth enhancing measures for industry are directed towards the development and upgrading of
industrial zones, as well as towards programmes to enhance the competitiveness of industry, particularly
through investment in IT, life-long learning and further specialisation of employees. Furthermore, tax