Issue link: https://maltatoday.uberflip.com/i/1541988
AT €10 billion, Malta's annu- al budgetary spend has an im- mensely social dimension that reflects an era of industrial peace and consensus between unions and employers' associ- ations. Over the past decade and a half, unions like the General Workers Union have partic- ipated and led the debate on economic modernisation and improved workers' rights, at a time of historic economic growth for the Maltese islands. It would be facile to simply take everything Malta has achieved in 2025 for granted, especially when considering the head- aches and turmoil faced else- where across the European continent, where democratic politics is being squeezed by the venomous far-right. Maltese citizens' lives today are sustained by a vast so- cial spend, financed directly by our taxes. Annual budgets over the past decade have de- livered improved quality of life, job security and mobility, and a dignified life. Consider Budget 2026's Financial Es- timates as proof of this state- ment—apart from free pub- lic schooling, Church school teaching salaries are paid by the State (€165 million) and private schooling's growing expenses are subsidised to the tune of €25 million; €48 mil- lion is paid directly to our pub- lic university's undergraduates in annual stipends; perhaps of a minor note, but €2.5 million in MATSEC examination fees are no longer payable to the State; school transport is fur- thermore subsidised for a total of €60 million; added to that is free public transport for all cit- izens, another €60 million; and an annual €56 million paid for free childcare. These are just a few of the Maltese government's cost-centres, but at least half of these redistributive pledg- es were developments from the last decade alone. Add to that the continued tax cuts for working families, higher pen- sions, and around €200 million in energy and fuel subsidies that keep supporting families and businesses. Malta's overall poverty levels remain below the EU average. In 2024, after three years of slow decline, the at-risk-of- poverty and social exclusion rate (AROPE) was 19.7%, con- sistently below the EU aver- age of 21%. Strong economic performance has guaranteed high levels of gross disposable household income (a GDHI of 152.78 versus 111.02 in the EU), which, coupled with high employment, has kept overall poverty levels low. What is concerning is that income inequality is also on the rise. Although not unlike the rest of the EU, the richest quintile in Malta earns almost five times more than the poor- est one (4.87 vs the EU aver- age of 4.66). This confirms the need for the government to ensure its social transfers are effective in reducing income inequality, and to never forget the need for a more progres- sive tax system, specifically on acquired and historic wealth. The GWU is fully conscious that many non-EU nation- als in Malta, including our fast-growing Asian workforce that contributes significant- ly to our economy, continue to face lower wages, higher housing costs, and greater job insecurity. If we truly want to strengthen social cohesion, we must ensure fairer income distribution and guarantee a dignified standard of living for these workers, too. Overall, Malta's model of great social spending is the high-water mark of our re- publican identity. To live in Malta today is to salute the opening line of our Constitu- tion: "Malta is a democratic republic founded on work and on respect for the fundamental rights and freedoms of the in- dividual." I implore all well-meaning citizens to weigh up the collec- tive goodwill of all stakehold- ers and political parties—how far do they promote a democ- racy through the foundation of work and individual freedoms? There you will find the answer to a lot of what has made the last 15 years of economic gains possible. 6 maltatoday | SUNDAY • 14 DECEMBER 2025 OPINION Josef Bugeja GWU secretary general The Maltese economic model at work What is concerning is that income inequality is also on the rise. Although not unlike the rest of the EU, the richest quintile in Malta earns almost five times more than the poorest one