The Malta Council for Economic and Social Development (MCESD) has an important role in advising the government on economic and social policy. More than a forum for consultation, it should provide a platform where government, employers, workers and civil society can engage in meaningful dialogue on the challenges facing the country.
No government, regardless of its political mandate or economic performance, can be expected to have all the answers. Every society has vulnerable groups who risk being left behind, even during periods of economic growth. The real test of progress is whether prosperity reaches those most in need.
Recent comments by Fr Marcellino during an interview on RTK 103 highlighted the reality that some people are still living in cars or garages and relying on soup kitchens for daily meals. Such circumstances raise serious questions, particularly when Malta's economy is performing relatively well compared with other EU member states.
In a country as small as Malta, the number of people living at or near the poverty line should be a particular concern. Economic growth alone cannot measure a nation's wellbeing. A society's success must also be judged by whether its citizens can live with dignity, security and access to opportunities.
Over the years, the MCESD has brought together different interests and perspectives to help address national challenges. However, governments have sometimes chosen to disregard its advice. When consultation becomes a formality rather than an essential part of policymaking, valuable expertise and the experiences of those directly affected risk being overlooked.
The consequences can include policies that lack public support, create unnecessary tensions and ultimately cost society more than meaningful consultation would have done.
Effective social dialogue requires preparation, transparency, reliable information and a genuine willingness to listen. The government, in particular, must ensure consistency between the positions it presents publicly and those it advances when engaging with social partners. Employers, trade unions, businesses and non-governmental organisations are accountable to the people they represent and have a responsibility to question policies that affect them.
Malta's economic, social and environmental challenges demand a clear, coherent strategy. This must combine immediate action to address pressing problems with long-term planning developed through consultation with all relevant stakeholders. Short-term interventions should form part of a wider vision, rather than being isolated responses to circumstances as they arise.
The need for such planning becomes even more apparent when considering Malta's exposure to international developments. As a small, open economy, the country is vulnerable to external shocks, including conflicts and instability that can affect trade, energy prices, investment and economic activity.
This raises important questions about the resources available to protect households and businesses during difficult periods. Political debate has frequently referred to a so-called "war chest" intended to provide such protection. Its effectiveness will ultimately depend on whether sufficient resources are available and whether the government has a clear, sustainable plan for using them.
Energy policy will be central to this discussion.
Government subsidies have helped shield households and businesses from rising energy costs. However, while offering important short-term protection, blanket subsidies also carry a financial burden and can weaken incentives to reduce consumption or invest in efficiency.
Significant investment in renewable energy is therefore essential if Malta is to reduce its dependence on conventional energy sources and gradually reconsider universal subsidies.
Social assistance must remain a priority, particularly for vulnerable households struggling with the cost of living. However, there is scope to examine whether support could be better targeted according to consumption and ability to pay.
For example, households exceeding established energy-consumption thresholds could receive lower levels of subsidy, while those most in need retain adequate protection. Properly designed, such a system could encourage energy efficiency without abandoning the principle of social solidarity.
A similar approach could apply to businesses. Companies investing in renewable energy and taking concrete steps to reduce their energy dependence could benefit from targeted financial incentives. Such measures would help businesses manage costs, encourage wider investment in clean energy and reduce the long-term pressure on public finances.
The principle is straightforward: support should protect those who need it while encouraging more sustainable choices.
As the saying goes, there is no such thing as a free lunch. Despite repeated government assurances over the past 13 years about the sustainability of energy subsidies, subsidies inevitably have a cost. Whether borne through taxation, public finances or adjustments elsewhere in the energy system, that cost cannot simply disappear.
The challenge is not whether government should support households and businesses, but how that support can be structured to protect the vulnerable, maintain competitiveness, encourage responsible consumption and remain financially sustainable.
This is precisely where the MCESD can make a meaningful contribution. It should not be viewed as an obstacle to government policy, nor should consultation be treated as a procedural requirement. Instead, it should serve as a mechanism for testing proposals against the realities experienced by workers, employers, families and communities.
Effective dialogue does not guarantee consensus. It does, however, help ensure that decisions are better informed, their consequences properly assessed and affected stakeholders given a genuine opportunity to contribute.
For Malta, the choice should not be between economic growth and social protection, or between immediate relief and long-term sustainability. The real challenge is to develop policies that deliver all three.
Achieving that balance requires consistency, transparency, sound planning and, above all, genuine social dialogue. Ultimately, a strong economy matters most when its benefits are shared and no one is left behind.
Gejtu Vella
People & Industrial Relations Consultant