Issue link: https://maltatoday.uberflip.com/i/1544987
Building a different economy 11 maltatoday | SUNDAY • 17 MAY 2026 OPINION alist Party believes economic policy should recognise and support this reality directly. Importantly, these meas- ures are not designed merely as temporary electoral givea- ways. They are structural re- forms intended to permanently strengthen disposable income and improve long-term finan- cial stability for households. This distinction matters enor- mously. The current government's economic approach has in- creasingly relied on subsidies, bonuses, and direct financial interventions whenever pres- sures emerge. While such measures may provide short- term relief, they also create an economic culture increasingly dependent on continuous state support. The Nationalist Party believes there is a better alternative. Rather than continuously compensating for economic pressures through public ex- penditure, we believe govern- ment should strengthen the earning power and independ- ence of workers themselves. This is why the National- ist Party has also proposed exempting the first €10,000 earned from overtime and part-time work from taxation. This proposal directly rewards productivity and effort. Many workers today take on overtime or additional part- time work simply to cope with rising costs. Yet a part of these additional earnings is immedi- ately lost through taxation. By exempting the first €10,000, workers retain the full benefit of additional effort and pro- ductivity. Again, this reflects a broader philosophy. A sustainable economy should reward work, productivity, and initiative. It should create conditions where individuals strengthen their own financial position through effort and op- portunity, not through depend- ency on periodic government intervention. Tax bands indexed to COLA The Nationalist Party has al- so proposed indexing tax bands annually according to the Cost of Living Adjustment (COLA). This is a particularly important reform that addresses a hidden but significant problem within the current system. At present, when workers re- ceive COLA increases intended to compensate for inflation, part of those increases can ef- fectively be absorbed through taxation as workers move into higher tax bands. In practical terms, this means inflation ad- justments intended to protect purchasing power are partially neutralised. The Nationalist Party believes COLA should genuinely remain in workers' pockets. By auto- matically adjusting tax bands in line with COLA, workers retain the real value of cost-of-living adjustments rather than losing part of them through bracket creep. This proposal reflects a broader economic principle that workers should not be- come poorer through inflation while government revenues quietly increase through fiscal drag. Our proposals also include a guaranteed minimum annual improvement of €1,200 in take- home pay through a targeted rebate mechanism where nec- essary. This means that where tax band revisions alone do not generate sufficient savings, ad- ditional rebates would ensure workers still benefit meaning- fully. Critics may ask whether such reforms are affordable. This is a legitimate question and one that must be addressed seri- ously. But the answer depends largely on what type of econo- my Malta wishes to build over the coming years. The current model increas- ingly depends on continuous expansion, rising population pressures, and growing state in- tervention simply to maintain stability. But it has also created infrastructure strain, housing pressures, labour shortages, and declining quality of life. A higher-quality growth model The Nationalist Party believes Malta now requires a transi- tion towards a higher-quality growth model. This means fo- cusing more heavily on produc- tivity, innovation, technology, education, entrepreneurship, and higher-value industries. Tax reform plays a critical role in this transition. Lower and fairer taxation strengthens incentives for skilled work, professional de- velopment, entrepreneurship, and investment. It helps retain talent within Malta and im- proves competitiveness. Most importantly, it strengthens household purchasing power structurally rather than artifi- cially. This is fundamentally dif- ferent from an economy built primarily around subsidies and redistribution. The Nationalist Party is not arguing against social support. Vulnerable families must al- ways be protected. But there is a difference between tar- geted support during genuine need and building an economic model increasingly dependent on constant government inter- vention. Our vision is based on in- vesting in people. That means empowering workers to re- tain more of what they earn. It means creating stronger incen- tives for productivity and inno- vation. And it means shifting Mal- ta towards a more sustainable economic future where quality matters more than quantity. Our tax proposals matter be- cause they are not merely tax cuts but a broader attempt to build a different kind of econ- omy for Malta—one that re- wards effort, strengthens in- dependence, improves quality of life, and creates long-term sustainability for future gener- ations.