In early 1955, the Maltese elected Dom Mintoff and his Labour Party to government based on a six-point electoral programme which included proposals to integrate Malta into the United Kingdom, achieve total parity with other British subjects in social services and direct taxation, and ensure unfettered local autonomy in all matters except for foreign relations and defence.
Integration failed to materialise, under the combined onslaught of a Catholic Church which was terrified of losing its historic privileges and a PN which favoured full independence. In the process of fighting on three fronts ̶ the British Government, the Church, and the PN ̶ Dom Mintoff resigned in 1958 and spent years in the political wilderness.
But that is not the point of my opinion today. Instead, I write about the first of Mintoff's points, being the introduction of social services on a parity with those in the UK. He required, as the PL wrote in its electoral programme, "an immediate guarantee of aid to raise the social status of the (Maltese) people to heights recorded in Great Britain."
Mintoff was, of course, referring to the famous 1942 Beveridge Report with its proposed "cradle-to-the-grave" welfare system to combat the liberal economist Sir William Beveridge called the "five giants" of Want, Disease, Ignorance, Squalor, and Idleness. After six years of deprivation and devastation, the Report offered hope to a British population exhausted by wartime sacrifices.
The Beveridge Report became the blueprint for the introduction of social services in the rest of the world, shifting the responsibility for social welfare from private charity to the state. In the UK, it was implemented by Clement Attlee's Labour government through three pieces of legislation addressing a national health service, family allowances, and a national insurance scheme.
It would be remiss if I did not mention that in Malta it had to be a Labour Prime Minister, who first took a leaf from the Beveridge Report. In 1948 Sir Paul Boffa introduced the Old Age Pensions Act, which provided for the payment of pensions to elderly persons who had never been in employment. A key element of this legislation was that it was not funded through contributions, though the benefits could only be secured after a financial means test.
Even before that, various governments ̶ some of them supported by the Labour Party ̶ had introduced a relief scheme for the needy, a Workers Compensation Scheme, and pensions for widows and orphans of deceased public officers. The pioneers of social welfare in Malta deserve to be remembered for their social conscience.
We must count it as a blessing that, in spite of his short term in office, Mintoff laid the foundations of the social welfare state in Malta. In 1956, the Labour Government secured Parliament's approval for the National Assistance Act, the National Insurance Act, and the creation of the Department of Social Security. Since then, we haven't looked back.
Social welfare programmes have a crucial role in protecting and supporting families, children, the elderly, people with disabilities, and those facing economic hardships. These programmes provide financial assistance, healthcare, counselling, and other essential services to those who are most in need. By doing so, social welfare ensures that the most vulnerable members of society are not left behind, empowering them to lead dignified lives and contribute to their communities.
Another primary goal of social welfare is to reduce inequality and promote social justice. It recognizes that individuals have different starting points and that systemic barriers can hinder their ability to thrive. By implementing redistributive policies, social welfare programmes help bridge the gap between the rich and the poor, providing equal opportunities for success and upward mobility. This reduces social unrest, enhances social cohesion, and fosters a more harmonious society.
The expansion of the social welfare net in Malta, in support of the goals I have mentioned, has proceeded over a 70-year period. The various milestones are being celebrated this year through a series of activities organised by the Ministry for Social Policy and Children. The month-long anniversary programme has included social and public engagement activities, an international seminar attended by delegates from 30 European countries, and a national conference.
Memories are short. Many people find it hard to believe that in the 1900s, poverty in Malta was widespread and severe, characterised by the lingering effects of two world wars, a housing crisis, high unemployment, and poor public health infrastructure. Following the war, the economy struggled, and when the British military started scaling back its military bases, thousands were forced to emigrate to survive.
Statistics previous to EU accession are hard to come by. A friend of mine, the late Prof Joe Bugeja, had written how the British colonial government was forced to mint a special coin exclusively for Malta. While in the rest of the Empire, the lowest denomination coin was the farthing (one fourth of a penny), from 1827 onwards, the London mint issued a large amount of copper 'one third farthing (one twelfth of a penny) to circulate exclusively in Malta. "Many Maltese could afford nothing better," Prof. Bugeja wrote. One third farthings (ħabbiet) were still circulating in Malta in 1913.
Poverty statistics started becoming available in the 2000s. Recent figures show that since 2005 the at risk of poverty (monetary) rate unfortunately increased by 2.6 p.p. to 16.9% of the population, reflecting the presence in the labour force of thousands of low-paid third country nationals. However, the broader risk of poverty or social exclusion in Malta has declined since 2015 (when figures became available) by 2.8 p.p. to 19.4%. of the population.
Meanwhile, the risk of material and social deprivation, which one might call absolute poverty, has dropped by 3.8 p.p. to 6.2% of the population, whereas the rate of severe and material deprivation has declined by 2.9 p.p. to 4.9% of the population. Analysis of the figures shows that, had it not been for the social welfare net, these figures would be consistently higher or much higher.
A basic tenet of European social welfare nets is that they aim to ease the strain for the most vulnerable sections of society during times of crises. We haven't had a war in Europe for 75 years, but we have had our fair share of economic and financial crises. In more recent times, the member states of the EU, including Malta, have had to cope with a number of recessions, two financial crises, and the Covid pandemic and its aftermath.
Hadn't it been for the social safety net, millions of people in Europe would have suffered excessively under the burdens of high public debt, inflation, budget cuts, and declining household incomes. In most of the EU, deep-rooted policy vulnerabilities and economic imbalances reduced living standards because of austerity policies.
This wasn't the case in Malta. Household disposable income in Purchasing Power Standard increased from €15,933 per capita in 2014 to €28,625 per capita in 2024 - that's a 79.6 percent rise versus a 50.6 percent increase in the EU. This pushed disposable income per capita from 80.7 percent of the average to 96.4 percent. Part of this increase was due to the effect of social benefits. All this was achieved in spite of inflation in Malta being half a percentage point higher than in the eurozone. However, we had no budget cuts because both the fiscal deficit and the debt-to-GDP ratio continued to fall.
In 2025, the government spent €1.62bn on social security benefits - an increase of €142.6m on the previous year resulting in such benefits absorbing 31,5 percent of the government's total expenditure. In 2024, benefits paid represented 13.4 percent of GDP versus 27.3% in the EU. Social benefits per inhabitant in PPS increased by almost 50 percent between 2005 and 2023.
Having said that, social protection benefits expenditure has tended to fall short as a percentage of GDP in recent years. It could be argued that this is because GDP in Malta has increased at an above-average rate, but on the other hand one could equally argue that such high economic growth has given the State higher financial wherewithal to improve benefits. I would augur that the new government installed next month will make a greater effort to lift the percentage of GDP spent on social protection to a much higher figure. Non-contributory benefits need to be jacked up considerably.
Research commissioned by the Ministry for Social Policy and Children's Rights and conducted by Prof. Vincent Marmara found that the majority of respondents approve of social services, though many see room for improvement. Over one-third of the population (218,140 persons) had received some form of social security benefit in 2024, reports the NSO.
The future of social protection in Malta has to focus on adapting the welfare state to demographic changes, the crucial role of women in the labour market, the transition to a green economy, and the digital transition. The Marmara research found that respondents identify the work-life balance and family support as key areas of importance, while two-thirds of them support the introduction of a private pension scheme to complement the state pension. Concerns expressed by respondents included the fear that some benefits may not be sufficient to ensure a decent quality of life.
The OECD highlights that 72% of people in its member countries want governments to do more to ensure economic and social security. I would venture to say that the percentage of Maltese who think so as well would not be that different. The long-term focus, as I see it, involves transitioning from purely passive benefits to "bounded universalism" ̶ a system that offers universal coverage with specific, tailored support.
All in all, however, there is no doubt that the celebrations of the 70th anniversary of the birth of the social welfare net in Malta are fitting. The solid foundations on which this net has been built augur well for the future.
Frans Camilleri is an economist. He studied at Oxford and University of East Anglia, is a former corporate head at Air Malta, and has served on various public and private boards.