Beyond the ballot box: Time to move ahead

The election is over. The dust has settled, the political debates have run their course, and the country can now focus on what matters most—securing Malta’s long-term prosperity and improving wellbeing for the people.

In this context, the government’s commitment, announced during the recent meeting with MCESD members which I attended is welcome as it focuses on stronger productivity and the development of a wellbeing index.  

As MEA has been maintaining for years, economic growth and wellbeing are not competing objectives but complementary ones. A successful economy should translate into better living standards, stronger communities and a higher quality of life.

Indeed, wellbeing should not be decoupled from a stronger focus on productivity because it must be earned through smart and hard work. While Malta continues to register strong GDP growth, productivity growth remains weak. Recent data confirmed that some of the country’s fastest-growing sectors are also among its least productive, raising important questions about the sustainability of our economic model. This should concern policymakers, employers, employees and society at large.

For years, Malta Employers has argued that economic success cannot continue to depend primarily on increasing the size of the workforce. Population growth has supported economic expansion, but it is not a strategy that can be relied upon indefinitely. The next phase of Malta’s development must be propelled by strong economic transformation which drives higher productivity, greater innovation and stronger competitiveness.

Economic transformation must become a prime national commitment. Businesses must be encouraged and supported to invest in automation, artificial intelligence, digital technologies and modern production processes. Equally important is investment in skills, training and lifelong learning to ensure workers can thrive in a rapidly changing economy.

This conversation is particularly relevant when considering several proposals made during the election campaign. Malta Employers supports workplace flexibility and measures that improve work-life balance. However, reforms must be carefully assessed against their impact on productivity and competitiveness. What may be easily applied to one sector may be difficult to implement in another. Additional leave entitlements and other labour market measures should therefore be approached cautiously and through meaningful consultation with employers and social partners.

The introduction of measurable targets and key performance indicators linked to wellbeing is a positive step. The association has been calling for this way forward at least since its 2021 annual conference, which advocated for a renewed framework for measuring progress that looked beyond GDP.

However, if these indicators are to be meaningful, social partners must play a central role in their development and implementation. Consultation should not be an afterthought but an integral part of the process.

Higher productivity must be shaped by the wider business environment, labour market policies and the efficiency of public administration. If Malta is serious about improving wellbeing through higher-value economic activity, it must also address a number of practical challenges that continue to affect employers and weaken competitiveness.

As we have insisted multiple times, economic policy should not be solely based on the achievement of critical mass and quantifiable targets.  It is positive that there seems a growing national consensus to this end. Nevertheless, Malta’s economy remains dependent on foreign workers, making it essential that policies are practical, fair and efficient.

One year after the implementation of the Labour Migration Policy, several concerns remain unresolved. The methodology used to calculate minimum termination rates continues to penalise employers for circumstances beyond their control.  Formal resignations, disciplinary dismissals and terminations resulting from an employee’s failure to perform agreed duties are simply added to employee turnover, despite being factors that are certainly not desired by employers to the extent that if it were within their control, they would seek to avoid them at all costs. This creates an unfair burden on responsible employers.

Another urgent issue relates to the postponement of the enforcement of the Pay Transparency Directive until January 2027.  This is not a frivolous request to delay implementation indefinitely, but a practical recommendation to ensure a smooth transition. Employers need sufficient time, guidance and reporting tools to comply effectively with the new requirements. Government agencies also require adequate time to prepare the necessary support structures. We do hope that common sense prevails on this issue.

The election may be over, but the real work begins now. Malta has an opportunity to redefine its economic model for the coming decade.  The priority should be to raise productivity, embrace innovation, enhance competitiveness, strengthen wellbeing and improve quality of life.

If we get these foundations right, Malta’s future prosperity will be built not on growing numbers, but on excellence. On creating greater value, better jobs and a higher quality of life for everyone.