NEWS | Wednesday, 18 July 2007

Poor response to hoarded cash scheme as deadline approaches

Gerald Fenech

As the deadline for the scheme on hoarded cash approaches, sources from within the financial community told Business Today that the actual response by the public has been extremely lukewarm so far.
The scheme was announced by Parliamentary Secretary Tonio Fenech a couple of months ago and was intended to bring out the large amounts of undeclared cash before the changeover to the Euro currency and to avoid inflationary pressures.
However retailers and shop owners have also reported a surge in cash payments especially in money that dates back some years and which has evidently been kept from circulation.
One particular retailer said that he experienced a number of customers who came to pay for goods with LM 2 notes that were rather flaky and old indicating that they had been kept aside for a number of years and were only resurfacing as the changeover to the Euro draws near.
Banks and financial intermediaries have also reported an increasing number of querying customers who came with relatively large amounts of cash but those who have just a few hundreds or a couple of thousands are being advised to open an account and not register for the scheme as the cash quite evidently came from legitimate sources.
Asked to comment on the scheme’s success, Parliamentary Secretary Tonio Fenech said that he did not have anything further to add to a recent press conference on the subject, a clear indication that the scheme has not been a success or met government’s expectations.
In the meantime, no news has yet been heard over the applicability of the scheme to shareholders loans, a proposal that was being pushed by the Chamber for Small and Medium Enterprises.
Speaking to Business Today GRTU Director General Vince Farrugia said that a meeting with the Prime Minister and Parliamentary Secretary Tonio Fenech had been held on the issue but so far no news has been forthcoming.
Other sources who wished to remain confidential said that the lukewarm response to the scheme could have to do with the fact that shareholders loans are not considered to be part of the ‘amnesty’. Unofficial figures of the total undeclared amount in shareholders loans that have been bandied about total around Lm 120 million, a substantial sum by any means.