Anticipating certain market dynamics

This week, I intended to focus specifically on the housing market and its affordability, as well as the strain on our infrastructure derived from the expansion of sectors requiring additional labour and higher volumes of people to host as a small island state. In my current post-election campaigning, even though the next general election is five years away, it is evident that markets are constantly evolving and that people feel the changes in how these dynamics play out in daily life. Economists, upon observing market patterns, are guided by the principle of intervening and regulating when necessary. When market failures arise and adversely affect society, prompt regulation is required. Nevertheless, markets should ideally operate within the framework of government policies designed to ensure optimal performance when left to function independently.

Before implementing government policy and regulation, it is essential to assess market failures and ensure that regulations across sectors, beyond EU directives and legislation, are effective and timely in stabilising markets. My recent interactions with the public highlighted that affordable housing and infrastructure strain are the most pressing concerns. Although I am no longer engaged in research and lack the resources, not least time, to construct detailed econometric modelling, my current focus on climate and environmental risks underscores the need to examine how markets are failing some segments of society. Economic intuition is guided by a strong background in economic theory and by what people feel on the ground.

The housing market, prices, and rent subsidies

Let’s start with affordable housing. Certainly, rent subsidies and market affordability do not reflect what is happening on the ground, and clearly there is a gap between statistics and reality. Surely, we need to address such a gap as quickly as possible. While I was writing this article, some followers coincidentally texted me to say they cannot afford the rent. I am not suggesting we encourage dependency. Rather, we should help those who have faced difficulties in life to improve their situation. For example, single persons, divorced or separated individuals, and those working in retail are struggling to keep up with rent and housing prices. I understand that some policymakers tell you that the key to success is education. However, we still need to be aware of people who cannot make it, for reasons such as social backgrounds and vulnerabilities.

We need a system that promotes social justice. It is fine to own 10 apartments if you can afford them and to live off the market. However, policy must be adjusted to promote social justice. I am glad to see people earning money, but there must be a limit on speculation to give others a chance; otherwise, inequality will grow. Current Minister Owen Bonnici is doing a great job in social housing, and the ministry’s personnel are efficient in responding to queries. Certainly, the government’s policy aims to promote the development of additional affordable housing units to support these groups. However, we need not just purchases but also units providing affordable rent.

The introduction of tapered subsidies represents progress. However, it remains unclear why eligibility for rent subsidies is assessed based on gross rather than net income. While banks use gross income to assess mortgage credit risk and maintain financial stability with respect to the debt-to-income ratio, this approach is not suitable for government rent subsidies. Net income should be considered to reflect individuals’ financial realities better. Many individuals struggle to afford basic expenses after paying rent, even with subsidies, while also fulfilling separation income obligations and paying taxes on gross income. After all deductions from gross income, some are left in relative poverty with net income. The rental market has also undergone significant changes since reaching a tipping point some years ago.

The tapering of the rent subsidy benefit and the supply of apartments

The government is attempting to address these market dynamics by also implementing a tapering system for individuals whose incomes increase and who no longer qualify for the full rent subsidy. However, if an individual’s income rises slightly above the threshold, the system begins tapering the rent subsidy. In a context of labour shortages, this can discourage individuals from working additional hours, including overtime, as the extra income results in the loss of benefits. Fewer hours of work would result in more people being imported to fill the gap, unless automation gradually fills part of the gap. Perhaps an alternative approach is to introduce a percentage buffer rather than a fixed income threshold. For instance, if an individual earns an additional €500 per year and exceeds the entitlement threshold, the subsidy will taper gradually. Establishing a 10% or 15% buffer on annual income before disentitlement, and then tapering it, would enhance transparency and incentivise greater participation in work. People could easily plan the hours of work, and so will employers. Ultimately, perceptions of taxes and benefits are shaped by considerations of fairness.

Moreover, it is becoming increasingly difficult for Maltese people to rent out apartments. I even saw messages exchanged by property owners and agents stating that the property is to be rented to foreigners, meaning that, in addition to the price, the supply is also excluding locals. Hence, there are two problems here: rent prices and supply. There are two options available to authorities. Either taxing more in areas where locals are excluded or providing additional units. I mean, providing additional units means the government must supply them. We do have a situation that requires urgent attention to revise regulations and policy to manage and support such cohorts. And we need to accelerate the affordability process, building on the work already underway.

The marginal benefits and costs of additional economic growth

Surely, beyond rent subsidies, I have advocated for a comprehensive assessment of current GDP growth, particularly from sectors that place additional strain on infrastructure. For example, if certain sectors contribute an extra two percentage points of growth but require the importation of labour and increased activity, this must be balanced by investments in infrastructure upgrades, the allocation of agricultural land for sewage treatment facilities as well as road upgrades, and measures to address noise pollution, emissions, and rising rents and property prices. It is essential to consider the multiplier effects of economic growth, but we must also measure the costs to our infrastructure. When natural capital is depleted, the resulting pressure on limited resources can lead to economic overheating and destabilisation of our social fabric. This necessitates a revaluation of policy priorities and our collective responsibilities. And the Opposition must express which sectors they refer to when they speak of planning, as hitherto, they did not mention any.

Ultimately, we must reconsider what we, as human beings, owe to nature, and certainly what we all owe to each other, if we are to live in peace, sharing progress and prosperity.

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The country has experienced robust economic growth, and the current fiscal position allows broad redistribution of income and subsidies. However, the adoption of laissez-faire economics in some sectors, at times, exerted considerable pressure on infrastructure and affected the quality of life and social behaviour within local communities.

The political and economic context

The PL in government prioritised liberal and progressive policies, both politically and economically. Between 2013 and 2019, Malta experienced significant economic growth, with increased earnings and a general sense of optimism regarding wealth creation, particularly in contrast to the stagnation of previous administrations. Such an approach allowed the PL in government to swiftly implement civil liberties until a Black Swan event occurred. In 2020, the global pandemic fundamentally altered public perceptions of daily life and even the way people think and behave. Extended periods of lockdown led to a renewed appreciation for time and outdoor spaces, and perhaps boats, too. Increased income contributed to higher demand for boats and mooring buoys. Ironically, mooring buoys was one of the issues encountered when campaigning on the ground.

Certainly, the pragmatic approach adopted by Dr Robert Abela during the pandemic was instrumental in mitigating the negative impacts on livelihoods and well-being. During the pandemic, road traffic evaporated, economic activity declined, and many third-country nationals returned to their home countries due to a lack of employment opportunities. Despite these challenges, individuals continued to receive salaries, including those in the private sector. The retail sector benefited from government funding to maintain operations, fostering a degree of dependence on state support and increasing fiscal strain during a period of economic contraction. The PL in government implemented unique measures to safeguard lives and livelihoods.

The consequences of a laissez-faire approach in certain sectors

To facilitate rapid recovery, the government invested in healthcare, financed vaccine procurement, administered vaccinations, and prioritised economic revitalisation, particularly in the wholesale and retail sectors. Subsequently, the Maltese government adopted a laissez-faire market approach, characterised by retailer reinvestment, the importation of workers through temping agencies with limited or no regulation, and an assertive tourism promotion campaign. This strategy yielded positive economic outcomes, with tourism rebounding and Malta recovering more rapidly than many other countries. However, the accelerated pace of economic activity and the substantial influx of foreign workers made it challenging for the population to assimilate, especially compared with the relative calm of the pandemic period.

Surely, the continued emphasis on retail-related sectors, including accommodation, led to positive market responses, with increased investment in properties for short-term rental. Digital platforms and low-cost airlines further enabled this business model. However, this approach introduced some disturbances. Laissez-faire tendencies and inadequate regulation permitted certain operators to disrupt residents’ quality of life. It is essential to differentiate between facilitating market operations and addressing market failures. When evidence indicates that economic operators are negatively impacting the broader community, regulatory intervention must be robust. And by regulatory robustness, I do not mean sounding the alarm in a panic clampdown.

Well, profit generation should not come at the expense of collective well-being. Sustainable growth requires policy tools that support expansion in sectors such as food and accommodation without adversely affecting residents or distorting the market. It is inappropriate to disturb residential areas with commercial activities, and property ownership does not confer the right to disrupt others. Consistent application of these principles across Malta is necessary to prevent unfair competition, where powerful entities exploit the system while smaller operators are disadvantaged.

Accelerating growth in higher-productivity sectors

The next phase should prioritise quality growth, as the marginal benefits of increased activity in low-productivity sectors are increasingly counterbalanced by social and infrastructure pressures. Public support for growth has diminished due to the associated strain and the declining marginal utility derived from these sectors. The core issue lies not in economic growth itself, but in where growth is derived. When asked about policy design, I advised prioritising sectors such as finance, insurance, gaming, information and communications technology (ICT), family offices, regulated crypto funds, payment institutions, and advanced automated manufacturing. Emphasis should be placed on professional and knowledge-intensive services, supported by a robust promotional campaign for these sectors, particularly finance, with ambition comparable to that of the Malta Tourism Authority.

Certainly, rapid growth should be pursued in high-value sectors. In contrast, expansion in lower-productivity sectors should proceed at a more measured pace, thereby increasing the share of gross value added generated by high-value activities. Upon reviewing the Fiscal Council’s statements, I found the narrative surrounding productivity to be unclear, not in terms of technical details, but in the broader approach to productivity enhancement. Although productivity is quantifiable, its calculation and interpretation remain subject to debate. While supporting wage fairness also in view of the pay-transparency directive, it is reasonable to contend that the economic structure must be adjusted so that productivity gains are not achieved solely by increasing employment in low-productivity sectors. The transition period I am referring to must be a strategic shift toward more productive sectors and a reduced reliance on importing labour into Malta.

 A sustainable economic way forward

An economy comprises both human and capital resources, and there is a current need to strengthen technological and natural capital. In the local context, there is limited scope to expand natural capital. What we need to do is preserve what we have, unless land reclamation for natural reserves is pursued while mitigating acute physical climate risks. The gap between economic growth and productivity has been partially bridged by increased employment, though this occurred before the widespread adoption of artificial intelligence. This is what the Fiscal Council failed to mention. The ICT sector is expanding rapidly and requires further acceleration to sustain momentum. While public discourse has centred on public-sector borrowing and yield curves, the primary focus should now be on output and employment metrics. Addressing productivity requires examining the relative costs of labour and capital, as well as the impact of artificial intelligence. The objective should be to maximise technological efficiency.

Labour costs can sometimes be offset by increasing employment, but it is essential to balance wage growth with investment in and effective utilisation of technology. Continued reliance on imported labour is unsustainable, as it places mounting pressure on infrastructure. The solution lies in prioritising high-productivity sectors, curbing the expansion of low-productivity activities, and initiating a gradual transition. This twin-effect approach may yield dual benefits. Artificial intelligence could enhance output and efficiency in certain sectors, while employment gradually shifts toward higher-value activities. The impact of artificial intelligence is indirectly highlighted in the PwC report on sectoral productivity, which identifies ICT as an outlier demonstrating rapid growth, higher gross value added (GVA), and improved productivity relative to other high-productivity sectors. Efforts should be directed toward increasing GVA in these sectors and their growth.

Crucially, reducing employment should not be viewed as the primary objective. Instead, the focus should be on increasing output and value added per worker through enhanced skills, technological advancement, and targeted investment. Artificial intelligence is only one component of this strategy, and its deployment can be challenging outside of automated systems and robotics in the wholesale and retail sectors. Advancements in high-quality manufacturing also have the potential to improve productivity significantly.

Economic management should be approached from this perspective rather than framing economic growth itself as problematic.

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Additionally, based on reader feedback, I will begin using subtitles to improve article clarity.

Age-restricted short lets and residential quality of life

Tourism is a relevant example. It is positive that tourists enjoy Malta’s attractions and that locals benefit from short-term rentals. However, our priority should be quality growth in tourism, rather than simply increasing visitor numbers. Excessive short-term rentals in residential areas are diminishing residents’ quality of life. While I support individuals earning income from short-term lets, property owners must ensure they do not disturb their neighbours. It is unacceptable to profit by permitting disruptive groups, such as rowdy teenagers, to compromise the peace of residents who have invested in their homes.

To address issues in busy areas, one solution is to restrict short-term rentals based on age. For instance, regular bookings could be prohibited for groups with an average age below 23 or 25. Authorities and rental platforms are aware of which age groups tend to cause disturbances. Private short-term rentals in these hotspots should be restricted for groups under 23 or 25, with exceptions for verified families, business travellers, licensed hotels or hostels, and longer stays. Long-term students under the age threshold would be considered separately. Platforms should require identity verification at booking and check-in, block non-compliant bookings, and display license numbers. Young tourists would still have access to hotels, which provide their own security away from residential blocks.

Furthermore, trained civilian teams are needed to address noise complaints, antisocial behaviour, and waste issues in busy neighbourhoods, and to issue prompt penalties when necessary. These teams should collaborate with the police, local councils, and rental platforms, and be funded through special levies in affected areas. Public reporting and robust oversight are essential. The Malta Tourism Authority has established occupancy rules, including lower limits in residential zones. We should also consider mandatory quiet hours and update existing regulations. While some residents have suggested military involvement out of frustration, it is important to maintain a clear distinction between military and civilian responsibilities.

Polluter Pays Principle for noise pollution

Pollution extends beyond the environment; noise pollution is a significant concern. The Polluter Pays Principle should be applied to noise in residential areas, recognising it as a genuine social harm and making it a priority. Excessive noise in densely-populated neighbourhoods with many short-term rentals should be treated as an environmental issue with tangible social costs. Efforts should begin in high-tourism areas such as Swieqi and surrounding zones. Other countries use sound sensors on streets and buildings to monitor noise during nights and weekends. Although these are not airport zones, a minimum decibel standard should be established to ensure residents’ peace. We should pilot sensor based thresholds and adopt a provisional residential night time decibel standard, to be refined after pilot results. While the government has previously increased revenue through economic growth rather than new taxes, it is now necessary to consider the polluter-pays principle. High-risk areas should impose additional noise charges on frequent short-term rentals and the platforms that facilitate them. Funds collected should support soundproofing grants, improved sanitation, and enforcement teams.

Tax policy can influence outcomes. Establishing special zones and implementing higher short stay surcharges in high-risk areas, particularly in the ninth and tenth districts, would support these neighbourhoods. Revenue should be allocated to neighbourhood improvements, soundproofing, community services, waste management, and security. Oversight should occur at the EU level, as platforms often disregard local data requests. Platforms must be required to remit payments, report transparently, and face penalties for non-compliance. A transition period until 2029 is recommended: the first year for mapping and registration, the next two years for sensor testing and age rule enforcement, and by the third year, full implementation of hotspot taxes and removal of non-compliant listings if necessary. Exemptions should apply to long-term stays, workers, families, and students, with additional support for residents such as soundproofing grants and accessible complaint processes.

Quality growth and sectoral priorities

When discussing growth, it is important to understand the key measures and principles of economic development and their broad application. Our current focus should be on quality growth, which involves evaluating each sector individually. Malta, for example, can prioritise its top 60 main sectors, ranging from services to manufacturing. Authorities must determine which sectors to prioritise for future support. I am not suggesting we close any industries but rather pause expansion in sectors that do not deliver high-quality growth and concentrate on those that achieve better outcomes with fewer resources. As reiterated last week, when discussing growth, it is important to understand the main measures and principles of economic development and their global application. Credit rating agencies and the European Commission primarily use debt-to-GDP and deficit-to-GDP ratios.

Lastly, if we want to be serious, noise pollution in crowded residential streets must be addressed as both an environmental and social issue. People are not against such measures. Certainly, people want us to measure, charge for, and enforce noise regulations, as well as implement age-based booking limits, apply hotspot taxes, and ensure dedicated enforcement. Residents in these areas are requesting these changes to protect their communities and promote higher-quality tourism.

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When one considers that the article is in English and that I am reaching these numbers during a period when most people are supposedly in holiday mode, it signifies something. This is the same pattern I observed before the general election when writing about current issues and humbly offering alternative solutions to deter and solve problems. People were closely following what I was writing. Something different was happening in the run-up to the general election. It is understandable to receive messages of encouragement from Labour supporters to submit my name for the general election with the PL. However, there were also PN supporters asking me to consider submitting my name for the general election with the PL. It is at times unexplainable and perplexing. But I got the gist of why. I did not just receive a few messages. Several persons even gave me their mobile numbers to keep in touch.

You might ask why I am writing this article, which might not have anything to do with the title. I will arrive at that point later. Besides the messages I receive on social media, I also engage with people in person – at village festas, community events, and even during home visits. The same pattern is emerging when people talk to me. Many tell me that they follow what I write, be it on social media or in the local newspapers, because I have kept consistent arguments over the past four years. One of them even told me that I am not a facsimile of others, and my brand is distinctive from the rest. The reason is that when I write about something, I criticise constructively in a way that does not harm anyone, and I humbly try to provide solutions. Perhaps this is why I was elected. People voted for me because they wanted consistency, as well as someone who doesn’t bend under pressure.

Now, when I speak about consistency, as you may all recall, I always reiterated that economic growth isn’t the problem. The problem, as it stems, is a planning and implementation problem. And this is not symptomatic of the PL government. It has always been, and it will take courage to change it, including bipartisan principles that should be inalienable, whoever is in government. Let’s take the environment. What we must do is keep more oversight so as not to allow chaotic conditions to thrive. Also, we have situations where we have more people on these islands not just permanently but also seasonally. Indeed, those who write about economic growth can’t understand the underlying positive effects. Alas, many of those writing and expressing their opinions are not economists.

An article written by a lawyer or a medical doctor doesn’t give the reasons why growth is bad. They argue that growth is not yielding the expected results. Firstly, we need to see what results they are talking about. Let me break this down. The starting point must be the understanding that the metrics provided universally, and those used by credit rating agencies as well as the European Commission, are the debt-to-GDP ratio and the deficit-to-GDP ratio. Indeed, there are other indices, but the starting point is economic growth. Because the lower the denominator, the bigger the ratio, and hence why we need economic growth.

Now, if economic growth means that we have additional tourists, additional seating capacities and services at our restaurants and hotels, and additional people living here to service our hospitals and medical care, then we need to manage the country with high precision, without hindering economic growth. And this means that whatever we do must be operationally efficient and implementable. At times, it must harshly punish those who are not complying with the current regulations to use it as a deterrent. We do not afford to relax, and we do not afford to start a political discourse that harms rather than helps facilitate our day-to-day work. Thumbs up to those involved in increasing the on-the-spot fines.

Also, we need to understand that people are indeed generating income. The only problem is that our political discourse has become one in which politicians either sweep issues under the carpet or avoid addressing them altogether for fear of stepping on others’ toes, and in the meantime, the Opposition fuels and foments a narrative that doesn’t paint the reality. We indeed have a situation where some areas need to be badly managed, with strict protocols. And here I must congratulate Minister Glenn Bedingfield for the good work he’s doing in several areas in Malta, including the increased surveillance in the ninth and 10th districts, which badly needed the on-the-spot fines and the suspension of accommodation licenses of those not complying with regulations and disturbing residential areas. Other districts are affected, too.

Certainly, economic growth is good as the country advances. Besides, we economists strive to distribute wealth more justly, and we also think of those who are really in need. What needs to be done is the right distribution of wealth, and this is a separate argument from economic growth, although intrinsically linked. And the problem we currently have is that some economic activities are indeed impinging on the quality of life of some residents, not least overdevelopment. I already stated this in a preceding article. I don’t understand the reason why piles of construction debris must sit next to an office and a residential area. Piles of construction waste are sprouting everywhere. The level of pollution and its consequences, including bad air quality, have reached an obnoxious level. And this is why those who do not understand what growth brings are linking everything to economic growth, rather than the sector itself, lack of implementation, lax policies, and the mischievous young tourists.

We need to step up our control and increase the penalties, as has already been done, and if need be, deploy additional human resources to address these challenges. That would represent truly productive employment and meaningful work.

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This system requires reform to build public confidence and protect low- to middle-income individuals from undue financial burdens. Under the Duty on Documents and Transfers Act, government-appointed architects inspect properties to ensure declared prices match market value. While I support efforts to prevent tax evasion through undervaluation, the process is often inconsistent due to anomalies and subjectivity. For example, if a declared value is less than 85% of the actual market value, authorities assess additional duty and interest, though taxpayers retain the right to appeal. Historically, widespread property undervaluation led to significant government revenue losses. Although the system has existed for years, critics, including myself, argue it is now flawed due to rising property prices, subjective valuations, and the financial strain on honest buyers.

The construction and property markets have expanded significantly under the PL government. The stability and growth of Malta’s property market depend on transparent and fair tax assessment systems. For real estate to continue driving economic and social progress, buyers must trust that duties are predictable and reflect actual market conditions. Arbitrary financial burdens or outdated assessments undermine confidence and place unnecessary pressure on families. Surely, improvements should include using the Promise of Sale (POS) date for all valuations and exempting bank-financed residential purchases from mandatory inspections. Banks already conduct their own valuations to protect their collateral, making price manipulation unlikely, as they also have their own architects. I am a banker myself, so I know how the system works.

The current legal framework gives the Commissioner broad oversight and enforcement powers to ensure duty is collected on the true property market value. The Commissioner or authorised architects have unrestricted access to properties when undervaluation is suspected. Well, I support efforts to prevent under-declaration and promote fairness. However, implementing these powers has introduced operational challenges that impact the system’s efficiency and fairness. Property prices in Malta have grown steadily, averaging 8% to 10% annually. Under the Duty on Documents and Transfers Rules, the valuation date is typically the POS date. However, specific rules state that if improvements are made between the POS and the final contract, the valuation date shifts to the date of transfer. In practice, even without improvements, government-appointed architects often inspect properties up to 12 months, and at times even more, after the contract, basing valuations on the inspection date rather than the POS date. This approach fails to account for rapid price appreciation during the intervening period, particularly affecting first-time buyers facing inflation and market volatility. This surely happened between 2022 and 2025 due to the war in Ukraine and the period of high inflation.

The system faces expertise gaps, relying mainly on government-appointed architects whose market valuations are often subjective. These architects may overlook factors that lower prices, such as urgent sales or legal restrictions. While purchasers can submit private valuations, the authorities have full discretion to accept or reject them, often favouring internal assessments over qualified private reports. The current system places hidden burdens on honest buyers, especially those already financially stretched. Many, particularly first-time buyers, depend on bank financing and have no incentive to under-declare, as banks require accurate valuations for loan security and collateral protection. When the Capital Transfer Duty department issues assessments months or years after the transaction, buyers face significant additional duty and interest, threatening their financial stability and contradicting election promises of support. These systemic issues require fundamental policy reform.

For example, I encountered a case involving a class 4C shop that a buyer intended to convert into a flatlet. The 80-square-metre property was priced at nearly €150,000, with an additional €60,000 needed for essential upgrades. After contesting an initial penalty of over €10,000, the purchaser still paid more than €4,000. The issue arose because the appointed architect valued the property as commercial, despite its approved conversion to residential use, highlighting the system’s subjectivity and errors. Besides, the uncertainty exerted on purchasers leaves them without proper planning, waiting at the discretion of the tax authorities. It is truly unjust.

A modern duty assessment system should prioritise predictability, transparency, and the elimination of arbitrary discretion. The POS date must serve as the consistent valuation benchmark to ensure buyers are taxed on the agreed value. Certainly, to address annual price increases, a mandatory reduction should apply to assessed values if inspections occur more than three months after the POS date. Properties with bank valuations, especially for first-time buyers and primary residences, should be exempt from government inspections. Recognising bank valuations for tax purposes would reduce administrative burdens and protect honest buyers from unexpected financial strain.

Besides, the authorities can explore the Public Duty Database model. A transparent public portal would allow purchasers to enter a property’s address to see the exact duty payable before committing to a purchase. Similar systems are applied in France to check the physical and transition risks of climate. We can use it as part of our collateral valuation systems too. Crucially, under this model, duty would be payable based on the database value irrespective of the price declared in the contract. And it can also consider other specificities that are not subjective. Certainly, it removes administrative discretion, provides absolute certainty for purchasers, clarity, and eliminates the motive for under-declaration.

Surely, for the average citizen, these reforms provide a critical social safety net. They ensure that families and first-time buyers are protected from unexpected additional duties and interest caused by systemic delays or inaccurate valuations. When purchasing a property, it is important to understand that the final decision-making authority lies with other parties rather than the buyer.

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I have already written about this in one of my opinion pieces back in 2025. My point in revisiting it is not to argue against NATO’s work. Au contraire, NATO can do what it feels is best in the interest of transatlantic and European security, which we are part of in any case under the EU-NATO Cooperation, and which we contribute to that forum. However, my central point is Malta’s neutrality clause and the PL’s longstanding commitment, which remain distinct from NATO’s work. These are rooted in the PL’s supporters’ mindset and the Labour Party’s grassroots, passed down through generations by Dom Mintoff, and in a shared view held by the majority of Maltese people.

Malta has been invited to the NATO Parliamentary Assembly since May 2024. This is not NATO membership, nor does it affect Malta’s constitutional neutrality. The NATO PA is a parliamentary forum, not a military structure. Neutral countries, including Austria and Switzerland, participate to understand security developments, contribute their views to democratic oversight, and engage in Euro-Atlantic dialogue without joining NATO. We already had a similar set-up through the Political and Security Committee of the EU and the North Atlantic Council. When I was posted in Brussels, we often met with ambassadors from the Political and Security Committee of the EU, of which I was Malta’s representative under the Lisbon Treaty, and the North Atlantic Council. These meetings took place four times a year, and we were informed about security developments because the Political and Security Committee of the EU works closely with NATO on different programmes of interest to avoid replicating missions and initiatives. This is why the EU and NATO meet almost every two years to negotiate areas of cooperation.

I always said that the Political and Security Committee of the EU is an important committee that must be given due attention. Frankly, in the past, we used our relationship in Brussels to understand what is happening from a security point of view. Well, the reasons why I left my post in Brussels were twofold. Firstly, I wanted to retrain as an economist specialising in ESG risk within the banking and financial industry, and secondly, it is better left unsaid. Certainly, I did not know that I would end up in politics, with a campaign for the MEP elections in 2024, and another for the general election, the last one being successful in both the second and ninth districts with a casual election. Now that I have been sworn in as a Member of Parliament with the PL, we are offered roles on the backbench, including standing committees chairing, membership, or head of delegations.

The government needs to appoint different heads of delegation, including that of NATO. Notwithstanding that I have ample experience in this area, and security was part of my work in the past, I was always on the side of the EU’s Political and Security Committee, distinct from NATO’s structures. Hence, I conveyed my disinterest in the latter. Certainly, I appreciated the nomination to become a member of the Economic and Financial Standing Committee, as well as a member of the Information Technology and Artificial Intelligence Affairs Standing Committee. The reason I appreciated these committees is that I shied away from the topic of security and defence in the past years, as stated in a recent interview. Technically, the topic of security and defence is essentially controversial unless you bow to certain debatable requests.

Indeed, I will focus my expertise as a member of the Economic and Financial Standing Committee and continue writing and sharing my ideas on aspects relating to the economy, sustainability (ESG) and now also Artificial Intelligence and information technology. And if they need my expertise on the Sustainability Standing Committee, I am happy to help, too. To conclude, the clip of Dom Mintoff with Dan Rather gathered over 120,000 views on my social media in less than four days. This shows that Dom Mintoff and the NATO topic remain highly relevant, as many people still agree with Mintoff’s views 50 years later, in 2026. And frankly, hailing from Bormla, Dom Mintoff remains my idol politician!

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At times, here in Malta, discussions about equality become entangled in political narratives or selective references to religion or sexual orientation. Yet the principle at stake is far more fundamental. As Auxiliary Bishop Joseph Galea Curmi reminded us in his homily during the appointment of the new Members of Parliament, public service requires us to treat every person with the dignity and respect they deserve as human beings, and that when we speak, we do so out of conviction rather than convenience. Every person in this country wakes up with the same hopes. We all want to live with dignity, to be treated with respect, and to have fair opportunities. And every person deserves to know that if they ever face injustice, they will not be left alone, and that the State will be there to protect them, whoever they are and whatever their background may be.

Some people confuse minority rights with other concepts, and too often they are reduced to a narrow frame, usually centred on sexual orientation. But equality is far wider than that. It includes inter alia race, religion, skin colour, disability, and every characteristic that has historically been used to exclude or diminish people. A modern European democracy must ensure that everyone feels protected, not only because it is morally right, but because Malta is a member of the European Union, a Union built from the ashes of the Second World War, and the atrocities that preceded it. The European Charter of Fundamental Human Rights is meant to be the foundation of the Union, yet today Europe is struggling to uphold that legacy. The European Commission has gone AWOL.

Sadly, extreme‑right populist narratives have gained traction across the continent, turning minorities into political scapegoats. The European Commission has not always responded with the firmness required. They are actually absent. While Malta has advanced significantly in equality legislation, progress does not mean completion. Discrimination persists, and many families – including those with children of mixed heritage or different races – still face prejudice. This week’s parliamentary debate will see a new law to amend the Constitution and reduce discrimination against minorities.

Consultation on these reforms began in 2014, more than 12 years ago, under then-Minister Helena Dalli. Stakeholders ranging from the Malta Employers’ Association to unions, the Church, and civil society were engaged extensively. The process was deliberate, inclusive, and thorough, spanning five years, and the first reading was presented in 2019. The result is legislation designed to ensure that dignity, freedom, and equality are not merely constitutional ideals, but lived realities.

Every generation leaves behind institutions that outlast governments, parliamentary majorities, and political cycles. Institutions are the living memory of democracy. They guarantee that rights do not depend on who holds power. They ensure that the State itself is held accountable. This is why the new Commission matters. It is a structural investment in Malta’s democratic architecture. It strengthens legal protections, enhances independence, and ensures that no person is left vulnerable to discrimination.

Critics have raised concerns about the Anti‑Deadlock Mechanism of the appointment of a commissioner, arguing it may affect independence. Yet the same voices praise the former National Commission for the Promotion of Equality – an institution that operated directly under a ministry and had no structural independence. Consistency matters. Well, independence cannot be defended selectively. The Opposition must decide what it wants. As the smallest nation in the European Union, Malta has often risen to the occasion. When other countries hesitated on civil rights, we moved forward. I still remember the 2014 legislation when the Opposition was against the introduction of the civil union for same sex couples.

Indeed, the establishment of the Equality Protection Commission sends a strong message. Certainly, Malta is committed to strengthening legal structures so that no one faces discrimination. This does not diminish anyone’s rights; it protects them. And it sets a standard that the European Union should emulate. Surely, Europe must work harder with its member governments to ensure that discrimination is not tolerated anywhere in the Union. Malta’s example shows that even small States can lead.

No one chooses where they are born, what they look like, or who they are. Yet these characteristics still shape how some people are treated. Parents worry about the narratives that could disadvantage their children simply because they are mixed‑race or come from different cultural backgrounds. This is why the new Commission is essential. It will serve every person without distinction, preference, or fear. It will protect the vulnerable. If implemented wisely, it may inspire other countries to follow Malta’s lead.

In a turbulent world, where geopolitics is shaping our lives, Malta has chosen not to be a spectator. It has chosen to be a leader of change – strengthening democracy, reinforcing trust in institutions, and ensuring that dignity remains at the heart of our national identity. Thank you to those who contributed to this legislation.

The post The National Commission for Human Rights and Equality first appeared on The Malta Business Weekly.

At times, we drive past different areas and do not realise changes in the area’s topography. However, I publicly asked why several parking spaces might now be missing due to this boundary wall. What I did not notice was a massive pile of construction rubble sitting behind it. The rubble, or construction waste, has been covered with green mesh all along, the same kind we used to cover our ceilings in summer to protect them from excessive heat. Someone brought this to my attention. Driving towards the Santa Venera tunnels, it is clearly visible. It is worth mentioning because people are asking why this area is changing and why we, who work in the area, including the residents, have to endure this debris pollution. These examples show how small changes can accumulate and why proportionality must guide our assessment of development across different localities.

Surely, I welcome the introduction of protection for Wied iż-Żrinġ and other areas, inter alia, the protection of open spaces that were turned into green spaces and are within the development zone. However, we cannot use these examples as a false equivalence to set aside other narratives for decisions related to excessive development. We need to pay attention to how we frame our narratives. This is not 2015 or 2020 anymore; we are now in 2026, with people demanding different priorities, including protecting the environment and revisiting how we plan and do things. I understand that decisions based on the 2006 rationalisation need to be made, and that we cannot discriminate against those whose land is included in the development zone. However, we need to distinguish between the planning phase and the within-development scheme. The world changed, and so did the way we must do things. The year 2006 is two decades ago. Frankly, the new voters and the electorate hardly remember those years. Those who voted for the first time in this election were not even born when the decision was taken.

My point is simple: proportionality must guide the upcoming applications. By proportionality, I mean practical planning considerations such as height limitations, buffer zones, adequate green lungs, and density thresholds that respect the surrounding communities. In the Swatar development up for a decision next week, proportionality must be applied. I am not saying the development should not be carried out, because that land belongs to private operators and it was the Nationalist Party’s mistake to include it in the development scheme in 2006. Yes, it was a serious mistake, and regardless of what they say or how they try to reshape the narrative, the mistake was theirs. What the Planning Authority can do is apply proportionality to the proposed development. We have spoken a lot about the quality of the local environment as part of the Well-Being Index presented by the party in government, of which I am a member. The quality of the local environment must consider excessive development and the need for adequate green space to provide breathing room in an already highly urbanised area, with densely-populated Msida across the Swatar valley. Therefore, I urge the Planning Authority to apply proportionality when deciding on this application.

Indeed, I registered to attend the hearing and to join the Executive Council web meeting scheduled for 14 July. My point in being present is to honour the promise I made to residents to oversee the planning application and to see what the decision will be. Also, we cannot afford to have only MPs from the other side of the bench articulating a different narrative and shifting blame to the current government, as if it were not their fault that the valley will be developed. What the Planning Authority can do, and we, as MPs, can signal, is that proportionality must guide development and allow for the stipulated buffer between the building spaces and the already highly urbanised area. We, as MPs, are bringing our constituents’ concerns to the public and the authorities.

As a country, we have not only an environmental responsibility but also a social one, because this is not just about altering the environment once and for all, but also about affecting communities and their surroundings. Personally, I could have stayed mum. However, staying mum will not aid the reorganisation of our country’s planning malaise. And it is not faithful towards my constituents and my ESG values. This is not about criticising the project or the developers, or, for all it matters, the Planning Authority, as by now you know that I try to offer Pareto-optimal solutions and find a trade-off that works for everyone when I write about a topic. As I said in my first statement to the media when I was elected MP, my work is related to Environment, Social and Governance. These themes were easily integrated into the current PL’s manifesto. Certainly, I am writing about this because I have been on the ground in Swatar, – otherwise I would not have received 562 first-count votes in just 21 days – heard residents’ concerns and realised how highly urbanised the area has become. And I heard the silent ones, not those that make the most sound. The valley is the only green lung, providing a bit of sanity. Building it all would be a pity and a mistake.

And as I said in my maiden speech, we borrow the environment from future generations. Hence, we have a responsibility as parents, as policymakers, and as politicians of this country.

The post Proportionality must be the guiding principle of Malta’s planning decisions first appeared on The Malta Business Weekly.

What is happening in Europe, especially in Spain, France and Germany, is abnormal. The record breaking temperatures registered in June – with France experiencing consecutive days above 40°C, Spain registering unprecedented night time heat, and Germany facing severe heat stress alerts – offered a different perspective, especially for those working in this sector. These events are not isolated. They are part of a pattern that climate scientists have been warning about for years. In my work on the prudential side of banking and ESG, I integrate climate change and environmental risks into banks’ Risk Management Frameworks and calculate the Probability of Default and Loss Given Default for every client and sector, accounting for physical and transition risks, using various climate stress testing models and scenarios.

When I started working in this area about five years ago, the political push at EU level was visible and tangible. Locally, we were still seen as aliens. However, the Green Deal was sealed a few years earlier, while the other side of the Atlantic was helpful in transitioning to greener practices, and we had solid engagement with other continents to raise awareness about climate change. Back then, the EU was legislating on reporting requirements, encompassing the CSRD, the SFDR, the Taxonomy Regulation and the CSDDD. After the Draghi Report, the new European Commission, and the re election of President Trump, the EU began revising the reporting requirements for companies and reducing political pressure in this sphere. The results are visible and speak for themselves.

The EU was not prepared to handle many reporting requirements, especially for companies within the EU. The idea was brilliant. However, after the pandemic, the ongoing war in Ukraine and other energy and geopolitical shocks have reduced the political importance of such climate reporting amid increased pressure on private-sector finances. If it were not for the European Central Bank, which pushed for the prudential side of banking, we wouldn’t be discussing such an important topic at EU level. The impact of climate change and the way we need to transition is not simple. We cannot deal with multiple shocks while simultaneously transitioning to green practices. If the current MFF does not provide for this, it will not be possible. If we do not ring fence money in this area, it will be quite difficult. True, we need to build our own defence systems, and upgrade as necessary. However, money allocated to climate defence and company subsidies is crucial to this transition.

We can keep on discussing how to decarbonise Europe. But Europe cannot have two competing topics, considered outliers, leaving economic operators and families on their own. Becoming greener and upgrading our defence and infrastructure to military-grade practices are two competing topics. We need to prioritise climate defence infrastructure and ring-fence funds for it, perhaps alongside military-grade infrastructure when allocating funds. The allocation of funds must be proportionate and assigned in an integrated approach.

When we talk about climate defence, I mean that, beyond the defence priorities on the current EU list, our infrastructure must be climate resilient, not just military proof. What do I mean by this? We need to provide highly urbanised areas with proper water defence systems to protect against flash floods and other climate events. We also need to make our surrounding blocks greener, which I tie as an integrated approach to mental health mitigation. The concept of living in a city without adequate green spaces between blocks exerts excessive pressure not only on our ecosystems but also on our mental well being. We need to mitigate the risk to banks’ collateral by upgrading our infrastructure to climate defence structures. Technology plays an important role in aiding us to achieve such systems, and funding should support that work.

I know many of you might say it’s because I work in the banking industry. However, I am now in politics. Perhaps writing about this topic once again might increase its visibility. Mitigating risks reduces insurance risk premia and enables a better assessment of our collateral against climate-related physical risks. We are all in it. We all need to pull the same rope together to achieve a better Malta, a better Europe and a better world. This concerns not just politicians, but everyone involved in growing our economy, from services to manufacturing to all those who make a profit. We all have a role to play in making this happen.

To close, sincere condolences to the families in France, Spain and Germany. It was truly disturbing to watch and read what happened.

The post Rethinking our global policies to mitigate climate risk events first appeared on The Malta Business Weekly.

Mr President, thank you. Since this is my first time addressing the House, I wish to join my colleagues in congratulating you on your appointment. Certainly, I extend my best wishes and take this opportunity to thank the electorate and personally thank the people of the second and ninth districts, where I contested and was also elected in a casual election.

Mr President, although I once viewed the highest institution of our country from the outside, today I have the privilege of serving the people from within. For this reason, I wish to speak briefly about some topics touched on last Saturday by H. E. the President of Malta, including the economy. When we speak about the economy, we must understand not only the mathematical principles behind it but also the philosophical foundations that shape it. The economy is complex, but we cannot ignore the basics. It is dynamic, not static. We cannot wake up, imagine something, and state it in a context that makes no sense. When I hear colleagues speak about a better quality of life, we must provide context. A better quality of life depends on generating wealth, and wealth comes from economic growth. It is an illusion to claim otherwise. This is simple to understand. If a family works harder year after year to increase its wealth, it does so to improve its economic situation and that of its children. Why? Because if their children ask for help, they can give it. The same applies to the economy. You cannot help your children if you do not generate wealth. The same applies when giving back to the people.

Mr President, let me give some context. When the Labour Party took the helm in 2013, the economic trajectory was very different. The economy stood at €7 billion; today, it is valued at more than €23 billion, having tripled. At that time, we discussed different priorities because the economic context was different. In 2013, we could not speak about the priorities we discuss today. Several families and businesses did not have enough liquidity to cover their electricity and water bills. That is in the past now, and the people want to look forward. Yet it is our duty to present the full picture, not half of it, if we truly want to improve on what has been done. Referring to what H. E. the President said, we all agree the environment must be given priority. The environment is an integral part of social justice. You cannot achieve social justice if you do not respect the environment around us. My work today as an economist is to integrate climate, environmental, social, and governance risks into the banking and financial industry. When I look at the Labour Party’s Int Malta manifesto, I see that the priorities we discuss – those that matter to the people – are written there in consolidated proposals.

In 2013, we needed to accelerate economic growth to exit the excessive deficit procedure and sustain our economic sovereignty. The European Commission could revoke all our economic and fiscal freedoms by rejecting our national budget if the fiscal situation were weak. The context was different then because the economic situation did not allow what we do today. It is good that today we speak about what we want, sometimes with a full list, even an à la carte menu. But back then, we discussed how people would cope with energy price instability being passed onto them. As politicians, we must be responsible. What we say must respect people and provide a proper context.

Let me speak briefly about the environment. The environment is borrowed from future generations. We cannot continue treating it in isolation. I accepted the invitation to contest the election with the Labour Party because the Int Malta manifesto addresses the environment, social policy, and governance in a holistic, integrated, and balanced way. The ambitious Well-Being Index will give a different dimension of measurement, not to diminish the importance of economic growth, but to complement it. This index, for the first time, binds a governing party to greater scrutiny. One of the ten dimensions – the second – is the quality of the local environment. We must protect what shapes our culture, natural capital, and identity. Moreover, as politicians, we must be empathetic to people’s needs and protect the sense of community that complements our well-being. The Labour Party in government has delivered much on the social front in recent years. Social policy is close to my heart, and we must treat it in an integrated way alongside the environment, not in isolation. We can do this because we have generated wealth over the years.

I welcome H. E. the President’s remarks on affordable housing. It is a theme I have campaigned on for the past four years. I am pleased this important theme now features prominently in the Int Malta manifesto as a support measure, complemented by the Well-Being Index under Dimension 5. We must never stop addressing this theme. We must also ensure any anomalies are corrected and push harder to balance housing market speculation by accelerating the supply of affordable accommodation. Mr President, I come from a generation that had to work hard to go farther in life. We lived without technology and went through a full transition. That transition brought improvements in how we live and greater efficiency. But every efficiency we try to maximise works against us in the sense that the more we want, the more we lose the sense of community we were raised in, not because we want to, but because we accelerate the pace of life.

In economics, we call this the J-Curve Paradox or, in simpler terms, human nature wanting more. We cannot say this happened because the government grew the economy. On the contrary, today we are in a better economic position because, as a nation, we seized every opportunity – whoever created them. Now that we are in a different economic position, we must take the next step and speak about sustainability, including environmental sustainability, which means a better quality of life. We must ensure that what we plan today – even in architecture – respects the country’s character, and this priority must be given. As politicians, we have the moral duty not only to make decisions and speak with conviction but also to understand, explain, and propose solutions. A country’s success does not come from partisanship but from reaching compromises. Compromises for the good of the people must be the norm of this House, not the exception. If we do not protect future generations, we will be remembered as weak. When the electoral campaign opened, there was a national consensus that the economy was strong, securing the Labour Party’s re-election for the good work it had done.

Mr President, maturity dictates we must move away from populist narratives. We must never speak disparagingly about those who help us grow and generate economic wealth – especially workers, whoever they are. The economy is built on capital and labour. In this context, I appeal that when irregularities occur, we address the irregularities – not the person or their nationality. Human dignity must be fully preserved and respected. In a geopolitically turbulent world that has changed how we live as a continent and nation, we must be even more careful with our words. As a nation, we have always been welcoming, and we must avoid turning workers or businesses into scapegoats through narratives unworthy of this Parliament. Being here is a privileged position. Mr President, from here I appeal that whenever we have discussions, we act with maturity, consider what we say, and return to the ideological principles we believe in – not only as political parties but as a nation within the European Union.

Thank you.

The post My maiden speech first appeared on The Malta Business Weekly.