Issue link: https://maltatoday.uberflip.com/i/1545608
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 im- proving wellbeing for the people. In this context, the gov- ernment's commitment, an- nounced during the recent meeting with MCESD mem- bers which I attended is wel- come as it focuses on stronger productivity and the develop- ment of a wellbeing index. As MEA has been maintain- ing for years, economic growth and wellbeing are not compet- ing objectives but complemen- tary ones. A successful econo- my should translate into better living standards, stronger com- munities 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, productiv- ity growth remains weak. Re- cent data confirmed that some of the country's fastest-grow- ing sectors are also among its least productive, raising im- portant questions about the sustainability of our economic model. This should concern policymakers, employers, em- ployees and society at large. For years, Malta Employers has argued that economic suc- cess cannot continue to depend primarily on increasing the size of the workforce. Population growth has supported econom- ic 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 in- novation and stronger compet- itiveness. Economic transformation must become a prime national commitment. Businesses must be encouraged and support- ed to invest in automation, artificial intelligence, digital technologies and modern pro- duction processes. Equally im- portant is investment in skills, training and lifelong learning to ensure workers can thrive in a rapidly changing economy. This conversation is particu- larly 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 there- fore be approached cautiously and through meaningful con- sultation with employers and social partners. The introduction of meas- urable targets and key per- formance 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 pro- gress 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 pro- cess. Higher productivity must be shaped by the wider business environment, labour market policies and the efficiency of public administration. If Mal- ta is serious about improving wellbeing through higher-val- ue economic activity, it must also address a number of prac- tical 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 prac- tical, fair and efficient. One year after the implemen- tation of the Labour Migration Policy, several concerns remain unresolved. The methodolo- gy used to calculate minimum termination rates continues to penalise employers for cir- cumstances beyond their con- trol. 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 certain- ly 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 re- sponsible employers. Another urgent issue relates to the postponement of the enforcement of the Pay Trans- parency Directive until January 2027. This is not a frivolous request to delay implementa- tion indefinitely, but a practi- cal recommendation to ensure a smooth transition. Employers need sufficient time, guidance and reporting tools to com- ply effectively with the new requirements. Government agencies also require adequate time to prepare the necessary support structures. We do hope that common sense pre- vails on this issue. The election may be over, but the real work begins now. Mal- ta has an opportunity to rede- fine 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 prosperi- ty will be built not on growing numbers, but on excellence. On creating greater value, bet- ter jobs and a higher quality of life for everyone. 6 maltatoday | SUNDAY • 28 JUNE 2026 OPINION Ivan Refalo Beyond the ballot box: Time to move ahead President Malta Employers Association 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