Four-fifths of income from Malta’s cash-for-passports scheme is going into the government’s account to cushion the economic blow of the COVID-19 pandemic.  

This was a temporary measure, Finance Minister Edward Scicluna said on Wednesday.

Under normal circumstances, just 30% of income from the Individual Investor Programme scheme goes into the government’s account (Consolidated Fund). The bulk of income, 70%, is held and invested by the National Development and Social Fund.

The controversial IIP programme has generated more than €800 million for the government between its launch in 2014 and last July. 

In mid-March, when the government rolled out measures to help businesses and the self-employed, Economy Minister Silvio Schembri had said the passport scheme fund could not be used to cushion the impact of the first sign of trouble.

However, Malta has told the EU that it needs income from the scheme now more than ever before. On Sunday the Prime Minister drove that point home and said the scheme was key to the country’s handling of the crisis. 

If Malta did not have the funds raised through the citizenship program, Robert Abela said, then it would not have had the comfortable financial ‘war chest’ which was helping to finance aid for families and businesses.

Asked how much money from the fund had been used to support families and businesses, Scicluna said he did not have the data readily available, however, for the time being, up to 80% of the income was going into the government’s account.

'Government can only provide a safety net'

The minister was also asked for his reaction to news that more than one in three businesses surveyed by the Malta Employers Association believe that the government financial aid in the wake of the pandemic has been “extremely ineffective”.

Scicluna said this was not surprising, because no government aid could substitute a company’s regular income, especially if this depended on sectors impacted by COVID-19, such as tourism or online gambling. 

“The government is expected to temporarily provide a safety net that allows companies to survive and provide a decent wage, he said. 

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