Economics of the Mafia State

Film Commissioner Johann Grech

The Labour Party is currently trying to salvage its personal publicly-funded entertainment scheme by justifying the massive public expenditure on the production of Hollywood movies in Malta. Apparently, the Film Commission’s defense of the tax rebates scheme is that according to a secret report they have drawn up themselves, public expenditure in the film industry creates three times more than the subsidy amount in private expenditure.

Firstly, it is rather telling that the Film Commission had to come up with this figure just now. The Film Commission should have had this information as part of its planned expenditure and schemes. Secondly, of course, public expenditure should induce multiple private expenditure, and that is the main point of public subsidies. The issue at hand is not that the government is issuing public subsidies in principle, but that it is issuing them for Hollywood movie productions, mainly intended as a sort of private entertainment for political leaders (and as of lately, even magistrates). The constant incompetence and the reckless way these people go about things is startling and they never cease to amaze me. It’s as if they never learn and they are always stuck in the same place in their mind.

Lastly, the report should be, of course, made public, and contrary to what the Film Commission is saying, the national auditor has no business or remit whatsoever to analyse such documents – these are mainly policy-related documents. The multiple of 3 that the Film Commission is quoting can also be scrutinised because the content of the expenditure is also relevant as the volume – a lot of this expenditure is paid to foreign teams and workers, for example, and doesn’t actually go into the local economy.

It all reeks of blatant amateurism.

1 Comment

  1. That’s exactly it. The film commissioner is spewing the tale that the expenses is all money spent in Malta. That’s rubbish.

    He is also pitching himself as the guardian of the rebate. No one has, at least at a political level, said that this should be done away with. So again his stance is crooked here.

    The rebate is a good thing. Without it we wouldn’t have an industry and to his credit Johann Grech raised it to 40% which made us competitive. But it’s what the 40% is given on is where he has gone totally overboard making us so “generous” with Hollywood in particular.

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