Editorial: Bloated public sector? Depends who you ask

Malta’s public sector is once again under scrutiny. The long-standing claim by employer bodies that it is bloated and undermining the private sector has been revived by the newly elected president of the Malta Chamber of Commerce, William Spiteri Bailey, and the newly-elected president of the Malta Employers Association, Ivan Refalo.

Yet, trade unions like the General Workers Union (GWU) firmly reject the accusation, insisting that the public sector is simply evolving to meet demographic and social needs.

Spiteri Bailey, speaking shortly after assuming his role as chamber president, reiterated a position held by his predecessors: the public sector is “enormous” and has absorbed a large share of the national workforce, making it harder for private industry to find staff. While acknowledging the government’s recent labour migration policy as a step forward, he stressed that reducing the public sector’s size must be part of the solution. Downsizing, paired with upskilling, he argues, would not only relieve pressure on the labour market but also allow workers to earn more and adapt to modern demands.

His point resonates with the Malta Employers’ Association, whose new president Ivan Refalo echoed concerns over what he called “unhealthy competition” between the public and private sectors. While recognising that population growth necessitates hiring more public servants in critical areas like healthcare and education, the association maintains that the overall scale of public employment has become problematic, especially where it diverts talent away from the productive economy.

These arguments have not gone unchallenged. The government, through Principal Permanent Secretary Tony Sultana, has previously dismissed the “bloated” label as an “incorrect sweeping statement”. And now the General Workers Union has weighed in, with secretary general Josef Bugeja flatly rejecting the notion that the public sector is overstaffed. According to Bugeja, Malta’s ageing and growing population justifies a strong public workforce, particularly in care, health, and education sectors. Downsizing, he warns, would be counterproductive.

What both sides agree on, however, is the need for upskilling. This shared recognition of the need for skill development could be a critical point of convergence. While employer groups see a leaner public sector as vital for economic competitiveness, and unions view a robust public service as essential to social cohesion, both acknowledge that the quality of employment must improve.

The debate also touches on deeper issues about Malta’s economic model. As Spiteri Bailey noted, certain jobs — such as waste collection or bus driving — are no longer attractive to locals, partly due to rising living standards. This has created an increased reliance on foreign labour, even as the country grapples with housing pressures and integration challenges. At the same time, the presence of a relatively secure and often better-paying public sector draws Maltese workers away from more precarious private sector roles.

Ultimately, the question is not simply whether Malta’s public sector is too large, but whether it is structured and equipped to meet the country’s current and future needs. Calls for downsizing must be weighed against demographic realities and service demands. Meanwhile, maintaining an oversized public sector without strategic workforce planning could stifle private sector innovation and productivity.