Australia's Relations with Malta
Australia and Malta have a strong and co-operative relationship underpinned by past migration and many shared international perspectives. Australia has had an immigration presence in Malta since the 1950s and full diplomatic relations since 1967. HE Mr Richard Palk is the Australian High Commissioner to Malta. Malta has a High Commission in Canberra (established in 1964), headed by its High Commissioner, HE Dr Ivan Fsadni, and has Consulates-General in Sydney and Melbourne, as well as consulates in Brisbane, Adelaide and Perth. There is also a vice-consulate in the Latrobe Valley in Victoria.
Community Links
According to the 2001 Census of Population and Housing in Australia, 136,754 Australians claimed Maltese descent with 46,998 Australian residents having been born in Malta. Taking into account unreported Maltese ancestry, the number of people of Maltese ancestry in Australia has been estimated at 152,282. The Maltese migrant community in Australia represents the largest Maltese community outside of Malta. Since first arriving in Australia in the 1800s, the Maltese have contributed to the cultural enrichment and economic development of Australia. During the early part of the twentieth century 1,900 Maltese emigrated to Australia. In May 1948, Australia and Malta signed an assisted-migrant-passage agreement, which extended the benefit of subsidised travel costs to over 63,000 Maltese. The peak period of migration to Australia occurred in the mid-fifties and sixties and the number of people in Australia who were born in Malta peaked in 1981. Since then the Malta-born population in Australia has been declining. It has also been ageing, such that there are now few Malta-born persons in the 0 to 24 age bracket. Most of the Malta-born population have lived in Australia for more than 15 years and over 70 per cent have taken up Australian citizenship. Victoria and New South Wales have attracted, by far, the largest numbers of Malta-born persons.
Trade and Investment
Australia merchandise trade with Malta for 2004-05 totalled $A18 million, decreasing by 44.8 per cent on previous year�s total. Australian exports to Malta were valued at $A7 million for the period 2004-05 with major Australian exports comprising dairy products (cheese and curd), margarine, ships and boats. Australian imports from Malta were valued at $A11 million with major Australian imports being electrical machines and apparatus, and equipment for circuits and computers.
Malta's small population, distance from Australia, high freight rates and competition from other countries, has limited trade links with Australia. Potential market opportunities for Australian exporters include areas such as telecommunications equipment, electronic parking meters, solar powered boats and other solar energy equipment and Australian environmental and water resources expertise and related equipment for water and energy supply, energy reticulation and waste management. There are also opportunities for Australian companies to develop niche markets in Malta and to collaborate with Maltese based companies in joint ventures to access third country markets in Europe and North Africa. Recent Australian business enterprises that have located in Malta have been in the areas of biotechnology, computer software and pharmaceutical production.
The Commonwealth Bank of Australia has established a prescence in Malta to facilitate investment, lending and business development into Europe.
Although the domestic market is small by world standards, Malta, by becoming part of the European Union (EU) in May 2004, is now in the European single market that comprises 456 million consumers. Access to the EU market is generally very open, except for the agriculture sector where Australia has limited quota access for its products. There are likely to be some new opportunities for Australian companies arising from Malta�s membership of the EU but Australian exports of agricultural products to Malta are expected to be restricted in future.
The Maltese-Australian Chamber of Commerce and Culture in Malta (MACCC) and its Sydney-based counterpart, the Australian-Maltese Chamber of Commerce (AMCC), in collaboration with the Australian High Commission in Malta and the Maltese High Commission in Canberra, help to facilitate and promote greater trade and business partnerships between Australia and Malta. In October 2005, the MACCC sent a trade delegation to Malta.
Foreign Policy Interests
At the international level, Australia and Malta have a number of common interests, particularly relating to their membership of the Commonwealth and there has also been a very good record of mutual support for international candidatures and in key foreign policy areas. Malta has been supportive of many of Australia's United Nations (UN) initiatives and there is a good working relationship on Commonwealth matters.
Defence
The Maltese were involved in the Gallipoli campaign as part of the British armed forces. Some Australian servicemen wounded at Gallipoli were hospitalised in Malta (the "nurse of the Mediterranean"). Australian servicemen were heavily involved in the defence of Malta during World War II, for the most part as members of the British armed forces, although there was also direct participation by Australian units in transit in Malta. There are Australian war graves in Malta, and ANZAC Day is a well-recognised occasion.
Major Bilateral Agreements
Bilateral agreements between Australia and Malta are in place covering immigration (1970), double taxation (1985), health services (1988), social security (1991, revised 2004), working holiday maker scheme (1996) and air services (1996).
High Level Visits
Reflecting the relatively large Maltese community in Australia, there have been regular high level visits to Australia by Maltese leaders. The Prime Minister, Dr Fenech Adami, and the then Foreign Minister, Dr Guido de Marco, visited Australia in 1995. Malta�s then Deputy Prime Minister and Foreign Minister, Dr George Vella, visited Australia in August 1997. Dr Fenech Adami and Malta�s then Foreign Minister, Dr Joe Borg, visited Australia in March 2002 for the Commonwealth Heads of Government meeting in Coolum, Queensland. Dr Fenech Adami again visited Australia in August 2002, accompanied by Deputy Prime Minister (now Prime Minister), Dr Lawrence Gonzi.
Prime Minister John Howard will attend the Commonwealth Heads of Government Meeting (CHOGM) in Malta from 25-27 November 2005.
Political Overview
Malta became an independent State in September 1964, having been under British rule since 1800. The Constitution of 1964 established Malta as a liberal parliamentary democracy, guaranteeing separation between the executive, judicial and legislative powers, with regular elections based on universal suffrage. Legislative power is held by the unicameral House of Representatives (65 members excluding the Speaker). Members are directly elected by universal suffrage for five years (subject to dissolution) on the basis of a single transferable vote system of proportional representation. The Cabinet exercises executive power and is responsible to the Parliament.
In 1974 the Constitution was modified to make Malta a Republic. The Head of State was henceforth the President, but his/her duties are largely ceremonial - the change of Malta's status did not create a presidential system of government. The President is elected for a five-year term by the House and appoints the Prime Minister and, on the latter's recommendation, other Ministers. Malta remains a member of the Commonwealth.
Maltese domestic politics are dominated by the two main parties - the Nationalist Party (PN) and the Malta Labour Party (MLP). The PN defeated the opposition MLP in the national election held on 12 April 2003. The next election in Malta is due to be held in 2008.
Former Deputy Prime Minister, Dr Lawrence Gonzi, succeeded Dr Edward Fenech Adami as Prime Minister of Malta on 23 March 2004. Dr Fenech Adami was elected by Parliament as President of Malta on 4 April 2004, following the expiration of President Guido de Marco�s five-year term in office. Dr Michael Frendo was appointed Minister of Foreign Affairs on 3 July 2004.
Malta is to host the next Commonwealth Heads of Government Meeting from 25-27 November 2005.
Foreign Policy
The PN Government's top and overriding foreign policy priority in its 1998 to 2004 terms in office was to achieve Malta�s accession to the EU. With Malta�s accession to the EU on 1 May 2004, this policy goal was successfully attained. The Government's legislative program had been heavily dominated by preparations for EU accession including liberalisation of previously closed sectors, privatisation of such entities as the formerly state owned Malta International Airport, opening up to competition monopolies such as telecommunications and postal services and removal of some import barriers. The political scene in Malta will, for the foreseeable future, be dominated by administrative, economic and legal issues relating to its accession to the EU.
As a small island state in the Mediterranean, Malta�s foreign policy also reflects its central geographical position and it is expected to maintain an active Mediterranean policy and to continue providing support for the Euro-Mediterranean process, in which it will seek to play a facilitating role where it can, and consolidation of relations with North African countries. Malta will also continue its support for institutions promoting multilateral co-operation, notably the UN, the Commonwealth, the Council of Europe and the Organisation for Security and Co-operation in Europe.
Economic Overview
Malta has no significant natural resources (except for some limited fish resources) and a very small internal market. Its economy is dependent on export-oriented industries (especially electronic components and clothing) and tourism. Tourism is the single largest foreign-currency earner and accounts for around 25 per cent of Malta�s Gross Domestic Product (GDP). In recent years, incentives have been introduced to attract foreign investment and to encourage offshore business and financial houses to use Malta as a base for operations in Europe and the Mediterranean. An international free port operates successfully as a central Mediterranean transhipment hub, although competition from other Mediterranean free ports has been increasing in recent years.
The average annual GDP per capita in Malta in 2004 was US$13,472. Malta�s GDP growth grew from minus 1.8 per cent in 2003 to 1.4 per cent in 2004 and is forecast at little more than 1 per cent on average in 2005-06. The annual rate of inflation in Malta was estimated to have been 2.8 per cent in 2004 and is forecast to drop to 2.4 per cent in 2005. In 2004, the unemployment rate in Malta stood at 7.2 per cent (cf. 5.7 per cent in 2003). The current-account deficit widened to over 10.4 per cent of GDP in 2004, from 5.8 per cent in 2003. Export performance remains weak.
The government intends to reduce the budget deficit to below 3 per cent of GDP by 2006, a highly ambitious task given the negative underlying trends in expenditure and poor economic growth prospects. The reduction of the deficit to below three percent of GDP is a key requirement for Malta to be able to adopt the euro currency by 2008. Although there has been some success in increasing revenue collection by cracking down on tax evasion, this still contributes to loss in government revenues. Further economic reforms are needed, especially to reduce the size of the public sector and to address rigidities that continue to reduce competitiveness. Labour costs remain high compared to the general level of productivity. While the Government recognises the need for Malta to improve labour productivity, it has been reluctant to take politically sensitive restructuring decisions. There remain high levels of consumer expectations and social security expenditure that appear unsustainable in the longer term.
Successive governments have made concerted efforts to attract more tourists and to upgrade tourist facilities. A third of all employment in Malta is tourism-related. The main source countries of arrivals are the United Kingdom, Germany, Italy and France.
The EU countries as a group remained Malta's principal trading partner. Singapore and the United States have become the dominant individual country trading partners, being the most important destination for Maltese exports in 2004, with Singapore ranking fifth as a source of imports after Italy, France, the United Kingdom and Germany. Other main export destinations are France, the United Kingdom, and Germany. In 2004-05, Malta was ranked 107th as a trading partner for Australia. Malta joined the World Trade Organisation (WTO) as a founder member in December 1994.