Issue link: https://maltatoday.uberflip.com/i/1546283
The following has been edited for brevity and clarity. The full interview can be found on maltatoday.com.mt as well as our Facebook and Spotify pages. PHOTOS: JAMES BIANCHI / MALTA TODAY 5 maltatoday | SUNDAY • 23 AUGUST 2026 INTERVIEW A lot of people and or- ganisations are feeling that the type of econom- ic growth the country experienced over the past years, generated wealth and left more money in people' pockets, but is now causing problems to public infrastructure and com- munities. Have we lost the balance between economic growth and people's quali- ty of life? In 2013, the incoming Labour government provided the stimulus to kick off economic growth so that the cake could grow and as a result reduce the debt and deficit burden. There was a time when the country even registered a surplus. It did so by zooming in on sectors, which today may have reached their maximum point, such as wholesale and retail, accommodation and food services. These sectors are now placing pressure on the country's infrastructure. […] The PL has pledged in its manifesto, 4% growth annually until 2030. The question is from which sectors should that growth come from. [The focus should be] finance, gaming, professional services and others such as family offices, crypto regulation that do not create pressure on the infrastructure but rather generate value added… People want to maintain their lifestyles and ensure that pensions can increase, free child care remains available, which can be sustained because we have economic growth… but the country has to decide what sectors to focus on and adopt a transition period while targeting higher-quality growth… Do you believe there is the political will to go for this shift? Before the election the government released new rules for short-let properties that were praised by most people. However, we later discov- ered these new rules were only applicable to new li- cences, leaving thousands of short-let apartments already on the market un- regulated. This is why we need a transition period. You cannot leave the free market function at will—it has happened in other areas such as temping agencies—and suddenly shock it through regulation. This is why you need to plan for a transition period… There is no indication of a transition period since these new short-let rules simply do not apply to ex- isting properties, neither when they come to renew their licence. A person who has invested thousands in an apartment needs to pay it back. One cannot cause a shock in the credit market. You can argue that instead of renting out the apartment to unruly youngsters, you can put it on long-let and benefit from policies introduced for this sector. I suggested a system with an age cut-off… The authorities can set rules by which group bookings and people below a certain age, say under-23, cannot be accepted in short-let accommodation. The policy will start diverting the market—these youngsters can either choose not to come or be redirected to different accommodation. I used to work in hotels back in time and you always had these types of unruly groups… But a hotel has its security and receptionist who can go knocking on the door. In the case of short-let apartments this control does not exist. Exactly. Policy should direct these groups to such accommodation, where the security can pull the strings and they will not be disturbing neighbourhoods. Let's face it, if I spent some €450,000 to buy a two-bedroomed apartment in Swieqi to live there and at night I cannot rest because of the noise… it's unfair... But is there the will to do something because I feel the Labour government is allergic to the enforce- ment of rules? The market was left to work to its own devices… This is why I suggest using policy to divert this tourism elsewhere. We can keep what we have but use policy to start introducing limits over a three-year period. The government through its authorities is the one to impose limitations in terms of how many licences are issued, what can be built; it gives a signal to the market and in turn this responds accordingly. If you want to leave Adam Smith working with the invisible hand adjusting things, it will take time but, in the meantime, people are not comfortable in their own homes. You need to zoom in on these sectors and start a transition period because when you allow the market to function on its own and suddenly introduce regulation it will shock the system… Government has given its commitment to continue subsidising electricity and fuel to ensure price stability. However, with an unstable international geopolitical environment, can the country sustain this policy with absolutely no capping on subsidies? As an economist, doesn't this worry you? The policy to subsidise electricity and fuel can only be sustained if economic growth is maintained… the bigger the economy grows, the country can continue borrowing during bad times to sustain that subsidy. As long as we have economic growth, the subsidy can stay. The moment growth dips, it will become a problem to sustain it. […] What the country should be doing, which is not easy because you have to find investors willing to go for it, is invest in renewable energy while keeping the subsidies intact. […] In Malta, whenever the price of fuel and electricity increased, the country suffered economically. It happened in the 1970s, the 1980s, during the Nationalist administration between 2008 and 2013; people got hurt… The country can start transitioning to renewable energy and reduce the subsidy accordingly but stopping it outright could create problems… It's a blanket subsidy. There is no difference between a middle-class family living in a modest apartment and someone living in a villa with swim- ming pool… As long as economic growth is maintained the subsidy can continue… it should be kept not to create economic instability. But government can also collect money in a different way through taxes on those who can afford more. The lower and middle classes should not be put under pressure but there are those from whom the government can collect more. But this has become blas- phemy under a Labour government. It has become a sin to even suggest in- creasing taxes on the rich. Even if you do not increase taxes but introduce a contribution that is paid by those who do afford it; it does not bother me. We were speaking of holiday flats; introducing a higher charge on them because their activity is disturbing people does not bother me at all. Otherwise, we do not have social justice… If you do not afford it, divert your operation to something else or reduce your activity… after all, the police [and soldiers] patrolling the streets and the increased outlay on public cleanliness are paid out of our taxes. But the policy has to come from government. Do you see a way of mak- ing affordable housing available? I am not impressed by statistics showing people are buying property… those working in retail do not afford to buy a house with the wages they are paid… Income has increased but during that same period the rate of growth of property prices was higher… the government, like it has done with the church, should identify sites where property can be built and sold at a cheaper price and in this way, it will be correcting part of the market speculation… If these apartments are put on the market and made accessible to young people, even against a means test, they will be able to afford it. As time passes and these home owners want to take the next step in their life, they can exit the [affordable] market and sell with the same conditions they would have bought at to ensure others coming after them would also have access to the housing market. It creates a parallel market without distorting the property market. But affordable housing should also be for those who rent...