National reform programme 2008-2010 Malta - European Commission

Contents 

List of Acronyms..............................................................................................................................................................i 

List of Tables and Figures............................................................................................................................................. iii 

PART A - Malta’s National Reform Programme 2005-2008 Closure Report 

Sustainability of Public Finances............................................................................................................................... - 2 - 

Competitiveness........................................................................................................................................................ - 7 - 

Employment ............................................................................................................................................................ - 15 - 

Education and Training ........................................................................................................................................... - 19 - 

Environment............................................................................................................................................................ - 23 - 

PART B - Addressing Malta’s Specific Recommendations 

Political Summary ................................................................................................................................................... - 28 - 

Strategic Direction 2008 - 2010............................................................................................................................... - 30 - 

Addressing Malta Country Specific Recommendations .......................................................................................... - 30 - 

Reinforcing the competition authority to strengthen competition ............................................................................- 30 - 

To strengthen competition, notably in professional services...................................................................................- 31 - 

Reduce state aids and redirect them towards horizontal objectives, especially R&D.............................................- 32 - 

Step up efforts to attract more people into the labour market, particularly women and older workers ...................- 35 - 

Addressing Malta’s Points to Watch........................................................................................................................ - 39 - 

Implementing and reinforcing delayed measures on health care reform ................................................................- 39 - 

Further improving the regulatory environment by continuing simplifying legislation by introducing systematic impact 

assessments and effective one stop shops for business start-ups.........................................................................- 41 - 

Diversifying energy sources, including enhancing energy efficiency and renewable energy and connecting Malta to 

Europe’s energy networks....................................................................................................................................... - 42 - 

Raising educational attainment and reducing early school leavers ........................................................................ - 44 - 

Part C - Malta's National Reform Programme 2008-2010 

Macroeconomic Policies ...................................................................................................................................... - 48 - 

Recent Economic Developments ................................................................................................................ - 48 - 

Macroeconomic Policy ................................................................................................................................ - 50 - 

Issues and Opportunities ............................................................................................................................ - 50 - 

Vision and Objectives.................................................................................................................................. - 52 - 

Stable macro economic framework............................................................................................................. - 52 - 

Competition policy....................................................................................................................................... - 52 - 

Wage developments ................................................................................................................................... - 53 - 

Diversification of the economy .................................................................................................................... - 53 - 

Human Resource Development .................................................................................................................. - 54 - 

Development of infrastructure ..................................................................................................................... - 54 - 

Encouraging investment.............................................................................................................................. - 54 - 

Malta National Reform Programme 2008-2010 

Contents

Flexibility of the economy............................................................................................................................ - 55 - 

Fiscal Policy ................................................................................................................................................ - 56 - 

Issues and Opportunities ............................................................................................................................ - 56 - 

Vision and Objectives.................................................................................................................................. - 57 - 

Microeconomic Pillar............................................................................................................................................ - 58 - 

Unlocking Business Potential.............................................................................................................................. - 58 - 

Better Regulation – From ‘Red Tape’ to ‘Red Carpet Treatment ................................................................ - 58 - 

The Small Business Act .............................................................................................................................. - 60 - 

Tourism ....................................................................................................................................................... - 61 - 

Public Land Transport Reform .................................................................................................................... - 61 - 

Services Directive ....................................................................................................................................... - 61 - 

Intellectual Property Rights ......................................................................................................................... - 62 - 

Investing in knowledge and innovation ....................................................................................................... - 62 - 

R&D............................................................................................................................................................. - 62 - 

ICT .............................................................................................................................................................. - 63 - 

Energy and Climate Change ....................................................................................................................... - 65 - 

Energy......................................................................................................................................................... - 65 - 

Climate Change .......................................................................................................................................... - 66 - 

Employment........................................................................................................................................................... - 68 - 

Health and Safety........................................................................................................................................ - 68 - 

An Overview of Recent Labour Market Trends ........................................................................................... - 68 - 

Malta’s Flexicurity Pathway......................................................................................................................... - 70 - 

Education and Training ........................................................................................................................................ - 73 - 

Curriculum Review ...................................................................................................................................... - 73 - 

Core Competencies Policy and Strategy .................................................................................................... - 73 - 

Review of the Transition from Primary to Secondary Education................................................................. - 73 - 

Promoting literacy skills in young people .................................................................................................... - 74 - 

Increasing the number of graduates in Science and Technology ............................................................... - 74 - 

Developments in further education ............................................................................................................. - 74 - 

Expansion of the Junior College ................................................................................................................. - 75 - 

Ongoing developments within the Institute for Tourism Studies ................................................................. - 75 - 

Malta College for Arts, Science and Technology Master Plan 2008-2013.................................................. - 75 - 

The University of Malta ............................................................................................................................... - 76 - 

Skills shortages and new occupational needs ............................................................................................ - 78 - 

Lifelong Learning......................................................................................................................................... - 79 - 

Paradigm shift to a Developmental Model of Education ............................................................................. - 79 - 

eLearning Strategy – training the education workforce............................................................................... - 79 - 


Contents

Conclusion............................................................................................................................................................. - 81 - 

Appendix 1 – List of Measures………………………………………………………………………………………………-82- 

Appendix 2 – Flexicurity Measures………………………………………………….………………………………………-90- 


Contents

List of Acronyms 

ALMP Active Labour Market Policies MEU Management Efficiency Unit 

APR Annual Progress Report MFEI 

Ministry of Finance, Economy and 

Investment 

APS Action Plan For Simplification MFSA Malta Financial Service Authority 

AYS Active Youth Scheme MGSS Malta Government Scholarship 

Scheme 

BEP Basic Employment Passport MIP Malta Industrial Parks Ltd 

BPA Business Promotion Act MQC Malta Qualifications Council 

BRU Better Regulation Unit MRF Material Recovery Facility 

CHP 

Combined Heat and Power 

Plant 

MSW 

Municipal Solid Waste 

CITAC Core ICT Advisory Committee MSOC Ministry for Social Policy 

EIF European Investment Fund MTA Malta Tourism Authority 

ERA European Research Area MTP Material Treatment Plant 

ERDF 

European Regional 

Development Fund 

NBSAP 

ESF European Social Fund NCHE 

ETAP 

ETC 

Environmental Technologies 

Action Plan 

Employment & Training 

Corporation 

NIFTE 

NQF 

National Biodiversity Strategy & 

Action Plan 

National Commission for Higher 

Education 

Night Institute for Further 

Technical Education 

National Qualifications Framework 

EU European Union NRP National Reform Programme 

EUPA 

FDI 

European Union Programmes 

Agency 

Foreign Direct Investment 

NSO 

NSRF 

National Statistics Office 

National Strategic Reference 

Framework 

FFM Family Friendly Measures OFC Office of Fair Competition 

FHRD 

FMMU 

Foundation for Human 

Resources Development 

Financial Management and 

Monitoring Unit 

PES 

PV 

Public Employment Service 

Photo Voltaic 

FOI Federation of Industry PVC Programme Validation Committee 

GDP Gross Domestic Product R&D Research & Development 

GHG Green House Gas R&I Research & Innovation 

GSU Government Services Unit RIA Regulatory Impact Assessment 

ICT 

Information & Communication 

Technology 

RTO 

Regenerative Thermal Oxidiser 

IO Information obligation SAC Special Area of Conservation 

IPSL 

Industrial Projects and 

Services LTD 

SAP 

Systems Applications & Products 

Malta National Reform Programme 2008-2010 - i -

IT Information Technology SCM Standard Cost Model 

ITS 

Institute of Tourism Studies 

SEA 

Strategic Environmental 

Assessment 

LN Legal Notice SMEs Small & Medium Enterprises 

MAP 

MCAST 

MCESD 

MCST 

Multi Annual Programme 

Malta College for Arts, Science 

& Technology 

Malta Council for Economic & 

Social Development 

Malta Council for Science & 

Technology 

SMPPMA Special Marketing Policy 

Programme for Maltese 

Agriculture 

TEES 

VAT 

VTMIS 

Training & Employment Exposure 

Scheme 

Value added tax 

Vessel Traffic Management 

Information Systems 

ME Malta Enterprise WSC Water Services Corporation 

MEPA 

Malta Environment & Planning 

Authority 

Malta National Reform Programme 2008-2010 - ii -

List of Tables and Figures 

Table 1 - Use of road transport fuels in Malta during 2007 and the share of Biofuels ........................- 26 - 

Table 2 - Key State Aid Indicators 2006 .............................................................................................- 34 - 

Table 3- Total Day and Evening Student Population in Further and Higher Education Institutions in 

Malta (2004-2007)...............................................................................................................................- 45 - 

Table 4 - Main Economic Indicators....................................................................................................- 49 - 

Table 5 - Achievements registered in the ICT sector within the past 3 years .....................................- 64 - 

Table 6 - Employment Rates, 2007……………………………………………………………………...….- 67 - 

Table 7 - Estimated number of students attending evening courses at MCAST.................................- 76 - 

Figure 1 - Total Day and Evening Student Population in Further and Higher Education in Malta (1994- 

2007)...................................................................................................................................................- 44 - 

Malta National Reform Programme 2008-2010 - iii -

Introduction 

The renewed Lisbon Strategy aims ‘to make Europe the most dynamic and competitive 

knowledge–based economy in the world’. Malta’s first NRP 2005-2008 proposed 54 concrete 

measures designed to improve Malta’s economic growth rate and employment opportunities 

under 5 strategic thrusts, namely: 

• Sustainability of public finances; 

• Competitiveness; 

• Employment; 

• Education and training; and 

• Environment. 

During the first cycle of the NRP, Malta has managed to achieve a number of positive results 

in a number of sectors. Such achievements include: improved fiscal position, Euro adoption, 

reduction in unemployment, the introduction of incremental measures in pensions reform, 

taxation measures, ICT, tourism and FDI. 

In the second cycle of the NRP, the Maltese Government will focus on the priorities 

highlighted by the European Commission in its country specific and general recommendations 

as well as on addressing the national issues which contribute towards Malta’s 

competitiveness. 

The main thrusts which will be addressed within the next three year cycle include: 

• Unlocking business potential; 

• Investing in knowledge and innovation; 

• Energy and climate change; and 

• Investing in people and modernising labour markets. 

Addressing these thrusts will contribute towards improving Malta’s competitiveness. 

Competitiveness is a key driver for a better quality of life as it fosters increased employment, 

better levels of earnings. Malta’s NRP is not a document which belongs solely to Government 

– it is a document which is important to many stakeholders and even to each and every 

citizen. In fact, the Maltese Government has carried out a public consultation exercise with a 

view to seek the views and opinions of the widest audience possible with a view to 

encompassing all positive ideas whilst steering Malta towards more competitive levels. This 

methodology is in line with Government’s commitment towards intensive public dialogue on all 

its programmes and initiatives. 

The NRP will guide Malta’s strategic development for growth and jobs for the period 2008- 

2010. All the measures put forward within the NRP will be undertaken whilst ensuring that the 

sustainability of public finances. It is intended to build on what Malta has already achieved 

and to move further and farther. 

This document is made up of three main sections, namely: 

• Part A - Malta’s National Reform Programme 2005-2008 Closure Report; 

• Part B - Addressing Malta’s Specific Recommendations; and 

• Part C - Malta’s National Reform Programme 2008-2010. 

Malta National Reform Programme 2008-2010 - 1 -

Part A - Malta’s National Reform Programme 2005-2008 

Closure Report

Malta’s NRP 2005-2008 Closure Report 

In its National Reform Programme for the period 2005-2008 Malta had submitted 54 

measures on which progress had to be reported for the same period. A status of these 

measures is being highlighted in this section. The measures follow the pre-established five 

pillars on which Malta’s NRP 2005-2008 hinged namely; Sustainability of Public Finances, 

Competitiveness, Employment, Education and Training and Environment. 

Sustainability of Public Finances 

In the first phase of its NRP, Malta has given a lot of importance to its macroeconomic 

situation. One of the main reasons for such importance is the run up to the adoption of the 

Euro on the 1 st January 2008. Prior to adopting the Euro, Malta had to comply with the 

Convergence Criteria and its admission to the Euro Area is an independent certification of this 

achievement. 

Another important issue that has been addressed is the sustainability of pensions by initiating 

the reform of the pension system as outlined in the White Paper “Pensions, Adequate and 

Sustainable”. Since this reform is a long term measure no clear indicators are as yet 

available that can provide a more accurate picture of the effectiveness of this measure 

The general Government debt 1 has decreased from 70.4% in 2005 to 62% in 2007. As 

mentioned above this was particularly important in the light of Malta’s adoption of the Euro in 

1 st January 2008. Moreover, the reduction of public expenditure allows the savings gained to 

be channelled in other areas that would be more beneficial to the country as a whole. Below 

is the state of play of the measures that fall under the pillar of Sustainability of Public 

Finances. 

Measure 1.1 

Review the existing taxation framework in order for taxation policy to encourage work and 

productivity (within the framework of sustainable public finances) 

This measure has been implemented through the Budget Measures announced in the Budget 

Speech 2006 and 2007 and includes: 

• A reform of the income tax bands in order to provide a greater incentive to those who 

want to work harder. It is estimated that this measure will cost the Government 

approximately m12 million (€28 million) in revenue; 

• A stipulated timeframe in which to pay tax refunds owed by the Inland Revenue 

Department; 

• A tax credit for women returning to employment, where women will benefit from a tax 

credit of Lm700 (€1,631) subject to certain conditions; 

• An amendment to the Part time work rules to enable women and their husbands to 

benefit from married rates in the case of women in part time employment. 

• Recognition of both spouses working in family businesses thus being eligible for social 

benefits and pensions; 

• A change in the computation of part time employment where the social security 

contribution has been adjusted to a percentage of income earned as opposed to the 

previous system where a minimum had to be paid irrespective of the hours worked. 

1 General government consolidated gross debt as a percentage of GDP 


Measure 1.2 

Enhance price flexibility through the liberalisation of monopolies and actively considering 

liberalising entry into certain service sectors particularly in the distribution, transport and 

construction sectors, commencing with the liberalisation of the importation and distribution of 

fuel and the ports sector 

Government is firmly in favour of liberalisation, and has liberalised a number of sectors in 

which the government was the major provider of services. Among the liberalisation initiatives 

in the past three years one finds the port sector, fuel distribution as well as 

telecommunications; both cellular and fixed line. Moreover, the provision of postal services 

has also been passed on to the private sector, with the whole sector to be liberalised in due 

course following Malta’s choice to allow for the maximum term under the EU directive to 

elapse before fully liberalising the sector , by the 31st December 2012. 

Measure 1.3 

Review spending aiming at setting agreed departmental targets for achieving efficiencies in 

the use of public resources. Efficiencies include savings in terms of public expenditure as 

well as the redeployment of human resources 

The Financial Management and Monitoring Unit (FMMU) has been set up as a permanent unit 

within MFEI. FMMU is to ensure that all entities necessarily administer Public Funds within 

stricter financial control, discipline and cost effectiveness and to aid the Government in 

reducing public spending and managing the country’s deficit, which aims are central to 

sustainable economic growth, convergence targets and Malta’s International Credit Rating 

The Benefit Fraud and Investigations Directorate within MSOC was set up in late 2005 to 

combat reports on alleged social benefit fraud. During the period 2006-2007 the Benefit 

Fraud and Investigation Directorate concluded investigations on 2,372 cases of alleged social 

benefit fraud and it is estimated that the combined operations of the Directorate resulted in an 

estimated Lm3,000,601 (€6,991,400) in savings. 

Malta reduced its expenditure particularly in the run up to the adoption of the Euro prior to 

January 2008 to be in conformity with the Maastricht criteria. In fact, Malta reduced its deficit 

from 3% in 2005 to 1.8% of GDP in 2007. 2 For the same period General Government debt 

was reduced from 70.4% to 62.6% of GDP. 

Measure 1.4 

Further review of the public sector workforce, identifying the core competencies and staff 

requirements in Government entities and the attachment of the surplus staff to a Surplus 

Employment Pool 

In November 2003, 902 employees were transferred to Industrial Projects and Services Ltd 

(IPSL). Out of these 418 opted to apply for one of the four voluntary resignation / early 

retirement schemes. The remaining 484 preferred to remain on the books of IPSL on the 

grounds that Government would guarantee their employment within various public entities 

and departments. 

Today only 433 employees remained from the original number transferred from Malta 

Shipyards Ltd due to retirement age. However, these were increased to 479 with the transfer 

of surplus employees from other entities/corporations. 

Recently, the company organised a skills assessment exercise; all employees were 

interviewed so as to enable the company to asses the skills and abilities of every employee. 

This exercise resulted in the transferring of 124 employees from one entity or department to 

another so as to be better utilised according to their trade or profession. In some cases IPSL 

staff had to be re-trained to be able to cater for office environment or in enforcement as was 

the case of the environment field inspectors at MEPA. 

Concurrently, the Management Efficiency Unit has also prepared a skills profiling manual in 

order to serve as a guideline in profiling skills across the Public Service. 

2 NSO News release dated 18th April 2008 available online at 

http://www.nso.gov.mt/statdoc/document_file.aspx?id=2220 (last accessed on 29 th September 2008) 


Measure 1.5 

Redeploy Government employees with other public sector organisations and Government 

departments through the Recruitment and Re-Deployment Advisory Group 

The Recruitment and Redeployment Advisory Group is supported by the Resourcing 

Department within MPO. Recruitment in non-essential categories in Government 

Departments and public sector entities is being restricted, whilst other human resources 

requirements are subject to validation and justification procedures. 

An amendment to the Employment and Training Services Act (Cap. 343) (Art 15A) was 

adopted to allow for redeployment of employees between public sector entities. 

As a result of these polices the people in employment with the Public Service decreased by 

687 employees to 29,061 for the period December 2005 to August 2008. In the case of 

Independent Statutory Bodies there was a decrease of 377 persons for the period April 2005 

to April 2008. In the case of Companies with Public Majority Shareholding the decrease was 

more evident with a decrease of 2,598 employees for the same period 3 . 

Measure 1.6 

Consolidation of Government entities to ensure that back office capacity is not fragmented 

and replicated. A Task Force is to be appointed in 2006 to produce regular reviews 

The Public Service has introduced a back office function operations in Gozo and is gradually 

migrating the Malta based base functions such as data inputting and salaries processing to 

Gozo under Service Level Agreements. Malta based resources are being retrained / 

redeployed as necessary to other functions or services. To date some 60 persons have been 

transferred thereby reducing social fragmentation in Gozo, and developing more knowledge 

based work on the island. 

It is positive to note that the private sector is following such an opportunity by following 

Government’s model. This can be clearly seen in the setting up of a call centre by a 

prominent bank in Gozo. 

Measure 1.7 

Develop a more aggressive plan against benefit fraud supported by the necessary legislative 

framework, especially with regards to invalidity benefits and unemployment assistance 

This measure is ongoing since it also includes recent measures such as the reform in the 

invalidity pension criteria which is still to be assessed. 

The Benefit Fraud and Investigation Directorate is committed to investigate all reports of 

alleged abuse in social benefits and recommend actions to be enforced against defaulters. 

The total number of inspections carried out by all the relevant authorities including the Benefit 

Fraud and Investigations Directorate, ETC officials and other units, from October 2004 to 

January 2008 totalled 13,563. Out of these, 7,131 infringements have been observed. As a 

result 6,234 persons have been removed from the unemployment register during the same 

time period. The ETC has won 82% of the cases referred to the courts as a result of the 

appeals by the defaulters. 

Measure 1.8 

Asses the role of means-testing instruments that determines eligibility for means-tested 

benefits 

A Working group under the chairmanship of the Permanent Secretary of MSOC was set up, to 

implement this measure. A sub group of technical experts was established in order to (a) 

extensively discuss means-tested benefits and services across Government; (b) identified 

and discussed the tool to be adopted with a view to introduce a single means-testing 

instrument. 

The Working Group is now working to define the capital / income bands to be tied to each 

bracket of the new means-testing instrument. 

3 Data obtained from the Management and Personnel Office, Office of the Prime Minister. 


The sub group has forwarded its recommendations to the working group and the latter is to 

approve the final version in order to secure Ministerial approval. 

Measure 1.9 

Commencement of incremental measures in pension’s reform 

The Social Security (Amendment) (No. 2) Act, 2006(Act XIX of 2006) was adopted on 7 

December 2006. 

These amendments include: 

• Raising of the pension age depending on the year of birth with the pension age 

increasing gradually to 65;; 

• People reaching the age of 65 will still benefit from a pension if they remain in 

employment; 

• A reworking of the rates of the maximum pensionable income; 

• A guaranteed national minimum pension of 60% of the National Median Income as 

opposed to the current regime of four fifths of Minimum wage for a married couple and 

two thirds for any other person; 

• Credits of contribution for parents for child rearing where social security contributions 

will be awarded, under specific conditions, for the purpose of pensionable income; 

• A legal provision that places the responsibility on the Minister responsible for Social 

Security to report to Parliament on a regular periodic review of the Pension System. 

Measure 1.10 

Introduce a new Health Services Act to separate the regulatory from the operational and 

service-delivery functions of the Health Division 

The draft Healthcare Act was at a very advanced stage of completion and a draft was being 

vetted by the Attorney General in early 2008. However, due to the general elections in Malta 

in March 2008, and the resulting change of Minister, this draft Act has been put on hold for to 

undergo revisions by the newly appointed Minister. 

However, the administrative structures envisaged in the Act for the Health Sector have been 

reformed despite the delay in the publishing of the Health Services Act; namely the separation 

of the regulator from the provider, that should improve the sustainability as well as the 

provision of Health Services in Malta. 

Measure 1.11 

Help ensure a flexible and dynamic labour market 

The ETC is currently providing a number of training services that include basic skills, trade 

and non trade programs, ICT, Business and Management Development and other Labour 

Market oriented programs. In addition it also administers a number of training and 

employment schemes that include apprenticeship and traineeship. 

Selected schemes and initiatives include the Business Promotion Act (Cap. 325) schemes; 

Training Subsidy Scheme; Traineeships; Apprenticeships; Night Institute for Further Technical 

Education; Mainstream courses; Basic Employment Training; Trade Testing; ESF 18 – 

Literacy for those seeking employment; ESF 31 - Employment and Training Scheme; ESF 47 

- Promoting the Woman – Entrepreneur Culture; ESF 52 - Training Programmes for Youths in 

Institutional Care; Employability Programme; ESF 73 - Addressing the demand and supply of 

e-skills through traineeships in ICT; ESF 24 - Increasing female participation; ESF 50 - 

National Campaign promoting the benefits of quality childcare. 


Measure 1.12 

Promote public service change to encourage the: 

• Improvement of quality of public service delivery; 

• Development of greater focus on end results in public sector management; 

• Development of family-friendly measures. 

Government has been continuously seeking mechanisms to encourage public service change 

to improve its services. Quality service charters are in effect in a number of public service 

entities and the government is exploring the possibility of adopting the Common Assessment 

Framework methodology which has been adopted by a number of Member States. 

In order to facilitate employment opportunities for its staff, Government has extended family 

friendly measures to the wider public sector. A teleworking policy has been launched across 

the entire public sector in February 2008. 

The Public Administration Bill is currently undergoing its approval process in Parliament. This 

Bill aims to improve the service delivery of the Public Service, promote an appropriate and 

accountable governance model, instil a sound work ethic culture and mainly focus on 

efficiency, results and meritocracy. 


Competitiveness 

Improving the national competitiveness is a priority for Malta given the specific needs of the 

country and its dependence on attracting foreign investment. In order to increase efficiency, 

government is increasingly changing its role to a regulatory function as opposed to being a 

provider. Liberalisation has featured high on the government’s agenda in the past three years 

with more and more functions such as gas, petroleum, ports and telephony being placed in 

the realm of the private sector. Moreover, Government has acknowledged that the traditional 

sectors in the Maltese economy have been affected by the international scenario and as a 

result of this other sectors have flourished. The increase in knowledge-based and value 

added sectors is readily visible and it is in sectors such as ICT, financial services and 

pharmaceuticals that foreign investment is on the increase. 

In this respect, the competitiveness measures for the 2005 – 2008 NRP were the following: 

Measure 2.1.1 

Set up Working Group to identify competitive advantages of Malta 

An Industry Strategy for Malta 4 was launched during the Budget for 2007. This strategy was 

drawn up following extensive consultation meetings with various stakeholders, more 

prominently with the Federation of Industry. The Strategy clearly defines the need for 

incentives to promote research, development and innovation capacity in Malta. It also 

promotes the need for fiscal incentives to those industries that cluster with SMEs and higher 

education institutions. The strategy proposes the sectors and activities that Malta should 

target in order to increase its competitiveness in its industrial areas. These areas include: 

• Education • Bio-technology 

• Health Care • Bio-informatics 

• Business Process Outsourcing • Pharmaceuticals 

• Financial Management • ICT 

• Professional Consultancy • High-Tech Manufacturing and Services 

• Creative Services • Maritime and Maritime Maintenance 

• Logistics and Warehousing • Aviation and Aviation Maintenance 

Measure 2.1.2 

Revise Business Promotion Act 

This measure was completed with the adoption of the Malta Enterprise Act (Cap. 463) that 

empowers ME to issue incentives to business under specific subsidiary legislation. The Act 

was approved by Parliament and came into force on 23 October 2007 through 

Commencement Notice LN 317/07. Under this new Act it is envisaged that incentives to 

Industry in line with the new EU State Aid Rules will be provided. These initiatives will 

amount to approximately €40 million per annum. 

In the past three years ME has provided approximately €38 million in assistance to SMEs in 

grants and fiscal assistance. Around 1,000 firms have benefited from these schemes. 

4 Industrial Strategy for Malta- Available online from: http://www.doi.gov.mt/EN/archive/Budget2007/engl.pdf . 

[Accessed on 1 st October 2008] 


Measure 2.1.3 

Develop SME loan guarantee scheme 

The EIF Counter guarantee was available till December 2007. To this effect these schemes 

have now come to a close. A total of 17 small and medium-sized enterprises have been 

assisted under this scheme. (One of these has defaulted and 50% of the funds were 

recovered from the EIF). 

Building on the experience gained ME will be applying for a new loan counter guarantee 

under the Competitiveness and Innovation Programme in 2008. 

Measure 2.1.4 

Formulate an action plan for Malta's industrial space 

Through a joint collaboration between MIP, ME and MEPA, an Action Plan for the Ħal Far 

Industrial Estate has been finalised, in view of the fact that this estate is seen as the only site 

where the projected growth of industry could be accommodated, in particular the 

pharmaceutical sector. This report was concluded in the first quarter of 2008 and should 

cover incoming demand for the next 3 to 5 years. 

Furthermore, again in consultation with ME and based on the project growth of industry and 

the change in their basic requirements over the next five years as prepared by the ME, MIP 

completed the development of design criteria for its new factory stock which takes into 

consideration the use of innovative materials (including energy efficiency), better space layout 

and land utilisation and acceptable costs. This was done through a design competition and 

finalised in the third quarter of 2007. 

Measure 2.1.5 

Reengineer FDI procedures for business set ups in Malta 

Towards the end of the second quarter of 2007, Government set up the Government Services 

Unit (GSU) within the MITC. The GSU has been given the remit to provide an administrative 

one stop shop for the provision of services to business entities operating from Smart 

City@Malta. It is intended that the GSU focus its activities on: 

• the provision of a single point of reference from which Government Services may be 

sourced to start-up a new business within Smart City@Malta; 

• the identification, review, and adjustment of those operational structures and activities 

that are necessary for the provision of Government Services in a manner that meets 

client expectations and conforms to legislative and administrative requirements and 

generally leads to the delivery of more efficient and effective Government Services. 

This single point of reference is to be developed by synergising service delivery with client 

needs through a concurrent two dimensional process: 

• Inward - reviewing the needs of service owners; 

• Outward - assessing client needs. 

Currently, 26 main service areas have been identified. Basic information relevant to each 

service has been gathered, and service level agreement template has been developed and 

finalised. Negotiations with ten of the identified service owners have been concluded while 

another 10 have been initiated. 

It is envisaged that the service level agreements process with all identified service owners are 

finalised by the end of 2008. 

Moreover, operational guidelines are to be developed with a view to be finalised by the third 

quarter of 2009. Finally, the process for the development of electronic application 

management system with linkages to main service owners is to commence and should be 

finalised by end 2009. 

Furthermore, it is worth noting that another one stop shop specifically addressing the needs of 

small businesses will be set up over the second cycle of the NRP. 


Measure 2.2 

Setting up of a Better Regulation Unit 

Following the setting up of a Better Regulation Unit (BRU) within the Management Efficiency 

Unit, Office of the Prime Minister reporting to the Principal Permanent Secretary as per NRP 

and Budget 2006, the current focus is on the implementation of the Action Plan for 

Simplification. The Plan includes recommendations on how existing regulations, procedures 

and structures are to be consolidated, rationalised, amended or removed in order to lighten 

the burdens, in particular the cost of administration, on the public and the business sector. 

Between February 2008 and August 2008 the BRU embarked on a Twinning Light Project 

with the Northern Ireland Public Sector Enterprises Limited (NI-CO, UK) under the heading of 

“Strengthening the Institutional Capacity for the Implementation of a Better Regulation 

Framework”. This project was financed by the EU 2005 Transition Facility Programme for 

Malta. The aim of this project was to build further the institutional capacity of the BRU and in 

fact, provided a platform for the sharing of the better regulation experience in the UK and 

Northern Ireland with Malta. As a result of this project the following were developed: 

• A procedures manual which provides a step by step guide to all users in three different 

areas of better regulation namely – the better regulation principles, the process of 

simplification and the design of new legislation. The procedures manual includes also 

an explanation on the use of the Standard Cost Model (SCM) the model chosen by the 

EU and Malta for the measurement of the reduction in administrative burden. This 

deliverable will promote more consistency and replicability in the implementation of 

better regulation in government. 

• A training manual which focuses on the same areas of the procedures manual and 

seeks to address the training needs of the Maltese public administration. This was 

followed by the actual delivery of the training to Ministry representatives whereby a 3- 

day course on the three areas was provided. Another 3-day course focusing on the 

soft-training skills was also provided, with the aim of equipping the attendees with the 

necessary skills so that they are able to cascade the training within their organisation – 

the concept of train the trainer. This is part of the project’s sustainability objective, apart 

from developing a basic set of skills within the departments and regulatory authorities. 

• A communications plan was also developed to assist the BRU in building better and 

more effective communication channels to engage stakeholders - both internal and 

external - in the better regulation initiatives undertaken by Government, together with 

the benefits, administrative burden reduction and cost savings resultant from such 

policies. This deliverable will continue to bring about cultural change. 

Measure 2.3 

Introduce Quality Assurance Mechanisms across Government through the adoption of quality 

standards 

Malta has introduced various quality improvement mechanisms, mainly through the 

introduction of quality service charters for a number of government entities. These charters 

lay down a set of quality levels of service that an entity is question. In order to obtain this 

certification the entity is assessed by the Charter Support Unit in the OPM which then issues 

the certification. In web link of the Charter Support Unit one can find a list of chartered 

department as well as the charter for each organisation. 5 

Moreover, the proposed Public Administration Act places emphasis on customer focus, public 

service delivery and increased public service efficiency. 

Malta has been expressing interest in adopting the Common Assessment Framework which 

has been adopted by a number of EU member states. Though a decision in principle has 

been taken to embark on such a project, Malta is still evaluating the best way forward to 

commence pilot projects to adopt such a mechanism across Government entities. 

5 Information Available Online from: http://www.servicecharters.gov.mt/depts/index.html [last accessed on 2nd 

October 2008] 


Measure 2.4 

Enhancement of existing tax incentives for R&D investment 

A Scheme was launched in 2005 by ME under the Deductions and Tax Credits (Research 

and Development) Rules (LN.330/05) focussing mainly on SMEs. Take up has been low due 

to the Business Promotion Act being the main source of tax credits for R&D. Following 

changes in the EU R&D state aid regime together with the entry into force of the Malta 

Enterprise Act, new subsidiary legislation incorporating all the principles of the new EU State 

Aid regime has been drafted. ME is awaiting approval from DG Competition to issue this 

subsidiary legislation and respective guidelines in 2008. 

Meanwhile, ME joined the Eureka network and the initiative was launched in June 2006. 

Currently 9 projects are being mentored for EUREKA submission. To date two projects have 

been submitted. This incentive will be part of the above mentioned R&D subsidiary legislation. 

Measure 2.5 

Develop a Regional Innovation Strategy 

This Strategy has been finalised with a number of recommendations in line with research 

carried out throughout the project and best practices in other European Regions. 

This Strategy aims to address gaps in Malta’s Innovation System and recommendations on 

how these gaps should be fulfilled. The results developed from the pilot actions in this project 

will also be implemented as part of this strategy. 

The final reports were completed on 29 April 2008 and sent to the Commission for 

review. ME is awaiting the final approval from the Commission. 

Measure 2.6 

Introduce a loan guarantee scheme to support innovative start-ups 

The EIF Counter guarantee was available till December 2007. To this effect these schemes 

have now come to a close. Five innovative start-ups have made use of this scheme. 

Building on the experience gained, Malta Enterprise will be applying for a new loan counter 

guarantee under the Competitiveness and Innovation Programme in 2008. 

Measure 2.7 

Publish an eWork Framework with guidelines on incentives and awareness raising 

A set of guidelines has been drafted and was presented for approval by the Core ICT 

Advisory Committee (CITAC). Following CITAC approval, the guidelines were integrated with 

a policy document drafted by the MPO. Policy and Guidelines have been presented as one 

document to the Cabinet of Ministers by the MPO and subsequently have been officially 

disseminated for implementation in the Public Service and the wider Public Sector 6 . 

Measure 2.8 

Establish a National ICT Framework 

A National ICT framework is being established in order to encourage further the dissemination 

of ICT in Malta. This measure deals mainly with a framework that will facilitate the attracting 

of multinational ICT companies to set up a base in Malta, and in parallel to ensure that an 

adequate supply of resources, both infrastructural and human resource, is available for these 

companies. 

6 Teleworking Policy in Public Administration, Relations Directorate Management and Personnel Office, Employee, 

Office of the Prime Minister, February 2008. This is available on the Government of Malta Intranet for reference 

purposes for all Government Employees. 


The main achievements under this measure is the commencement of the Smart City project 7 , 

that is envisaged to generate 5600 new employment opportunities in the coming years, 3600 

of which are directly ICT related. In order to ensure that these figures are achieved, 

Government has embarked on a number of different initiatives to entice further training in ICT 

related subjects. These include various sponsorship schemes such as the myPotential 8 are 

producing the intended results with more than 1100 people 9 currently undergoing various 

forms of training in ICT. Moreover, the job placement schemes have enabled 280 students 10 

to gain valuable work experience in the ICT related organisations. Furthermore, to increase 

the possibility of more facilities for further training, Government has facilitated the setting up 

Multinational academies like Microsoft, Cisco, Oracle and SAP in Malta. 

In addition a new ICT strategy for the period 2008 -2010 has been launched with the aim to 

provide for Malta a world-class external lCT environment which meets international bestpractice 

standards. This strategy outlines Malta’s ambition to become one of the top 10 

Information societies in the world by 2010. It sets to achieve this by using ICT to right social 

inequality, disadvantages and disabilities, while improving the quality of life of those who 

reside or visit Malta. 

According to the latest i2010 report rates public services online availability for citizens at 92% 

compared with the European average of 51%. 11 It is on such a positive standing that the 

Government of Malta intends to continue developing the levels of ICT in Malta. 

Measure 2.9 

Review Malta's broadband connectivity 

Government has embarked on a project with the aim to decrease the cost of broadband 

connectivity and hence increase accessibility. A study on the current state of internet 

connectivity conditions is due to be commissioned to establish the current market conditions 

following which Government will analyse the options with the aim to find the best and most 

cost effective manner on how to decrease the price of internet connectivity. 

In this respect Government has launched the Blueskies initiative to increase broadband 

penetration in the short term. This initiative was taken up by 5,600 households. 12 

Malta’s Broadband penetration rates have grown from 3.5% in 2004 to 13.9% in 2007. 13 

Furthermore the level of internet access in 2007 stood at 54% which is at par with the levels 

of the EU-27. 

Measure 2.10 

As part of the restructuring of the MTA present / implement strategy for mainstream / niche 

tourism 

The Malta Tourism Authority has been restructured in order to better respond to the approved 

strategy that promotes niche markets in addition to the mainstream tourism potential. This 

strategy seems to be producing satisfactory results since the income from tourism has 

increased in the past years. In this respect, Malta experienced an increase of 11.9% of 

inbound tourists between January to July 2008 when compared to the same period in 2007. 

7 The Official website of the project is available online from:http://www.smartcity.ae/malta/. [Accessed on 1 October 

2008] 

8 My Potential. Available online from :https://secure2.gov.mt/SmartIsland/Pages/Initiatives/Initiative.aspx?id=5 

[Accessed on 1 st October 2008] 

9 Data obtained from the Ministry of Investment, Technology and Communications. 

10 Ibid 

11 

Speech by Minister for IT, DOI Press Release 22 nd September 2008, Available online from: 

http://doi.gov.mt/en/press_releases/2008/09/pr1320.asp [Accessed on 2 October 2008] 

12 “5,600 DAR BIL-BROADBAND GĦALL-EWWEL DARBA BL-ISKEMA BLUESKIES” DOI Press Release, 24 th April 

2008. Available online from: http://doi.gov.mt/en/press_releases/2008/04/pr0584.asp [Accessed on 1 st October 2008] 

13 Eurostat Structural Indicators. 


In July 2008 Malta experienced a 1.2% increase of tourist arrivals when compared to July 

2007 14 . 

Measure 2.11 

Improve accessibility, conservation and promotion of key heritage sites 

Work is currently in progress in the World heritage of Ħagar Qim and Mnajdra, Tarxien 

Temples and the Museum of Archaeology. The main thrusts of these works are to improve 

the accessibility of these sites by means of visitor centres that provide for a better experience 

of these sites. In the case of the Ħagar Qim and Mnajdra temples, the erection of protection 

structures is due to commence imminently in order to improve the conservation of these sites. 

The Visitor centre at these temples is due to be completed by end 2008. This project is 

estimated to cost around €4.2 million excluding taxes. 

Work on the other two sites (Tarxien Temples and Museum of Archaeology) has been slightly 

delayed due to permit approvals and other resourcing issues. 

Measure 2.12 

Introduce tourism zone management tools to raise quality standards 

The monitoring and upgrading of standards in tourism zones and improvement of beaches is 

currently underway and is envisaged to be finalised by end 2008. Once this completed it is 

envisaged that a better overall product will be made available to tourists through better 

services and improved facilities in the main tourism zones. The introduction of Zone 

management enables the micro management of these areas instead of a national system of 

management and, it is, therefore, envisaged that a better response to localised and sectoral 

issues and problems will be achieved. 

Measure 2.13 

Implement a branding exercise for tourism 

Branding Malta has been the focus of MTA in Malta in the past years. This exercise was 

undertaken to shift the marketing approach from a geographical market basis to a segment 

market basis. Various campaigns in overseas potential markets have been undertaken to 

portray Malta as a destination in the various segments identified in the new tourism strategy. 

In the local scenario, a nationwide campaign to entice every Maltese citizen to respond to the 

tourism industry by becoming more tourism friendly as well as more customer service 

orientated has been undertaken. The increase in tourism arrivals shown in measure 2.10 are 

a statement to the work involved in promoting Malta in the overseas market. 

Measure 2.14.1 

Operate the Vessel Traffic Management System 

The Ports and Coastal Vessel Traffic Management Information Systems (VTMIS) commenced 

operation in Dec 2006 on a one-year trial basis. Following this trial period, the Malta Ports 

and Coastal Vessel Traffic Service became mandatory as of 1 December 2007 with Notice to 

Mariners No 80/2007. This system was officially launched on 5 March 2008 and is primarily 

aimed to monitor shipping and to provide vessel traffic management to shipping within the 

national waters and ports. The cost for this system is € 3.5 million. 


Complete economic, financial, feasibility and environmental impact study for expanding the 

Grand Harbour and Freeport infrastructures 

This measure involves two main projects, a feasibility study and impact assessment for port 

development projects in the Grand Harbour and Mgarr Harbour (Gozo); and surveys and 

geotechnical investigations of existing port structures in Malta. All reports including 

Geotechnical, Feasibility Studies and Environmental Impact Assessments have been 

completed. All reports including Geotechnical, Feasibility Studies and Environmental Impact 

Assessments have been completed. 

14 Data provided by the Office of the Prime Minister – Parliamentary Secretariat for Tourism. 


All reports including Geotechnical, Feasibility Studies and Environmental Impact 

Assessments have been completed. Areas covered by the geotechnical reports inter alia 

cover Valletta, Marsaxlokk, Msida Marina, Sliema/Gzira Strand, Salina Bay, Anchor Bay Jetty, 

Marsascala and Gozo. 

Government has published its Vision for the Grand Harbour. 15 This vision entails various 

initiatives for the Grand Harbour which include: 

• A new Cruise line terminal in Isla 

• Extension of the Valletta Cruise Liner Terminal 

• A promenade from Ricasoli to Isla 

• A new Yacht Marina in Kalkara 

• An Excellent Hotel for the Grand Harbour 

• A new Tourism and Cultural Sector 

• A centre for the Audio-Visual Industry 

• The Restoration of Villa Bighi 

• Super yachts along the Isla Waterfront 

• Ceasing of the cleaning of Tanks 

• A commercial maritime park 

• Maritime Institute 

• Maritime Services 

• Closing down of the Marsa Power Station 

• Afforestaion of the Rinella Valley 

• Rinella Creek 

• New Maritime infrastructure in Kalkara 

• The Reorganisation of Xatt il Mollijiet 

• Extension of Quay Infrastructure 

• A Base for Towing Services 

A complication in the tendering process resulted in the second project being slightly delayed. 


Privatisation of all yacht marinas and identification of new marina sites to be developed by 

private sector 

Government has announced that all government run yacht marinas are to be privatised by the 

end of 2008. This move is envisaged to create a more competitive yacht marina sector with 

the participation of various market players and to upgrade the service level that boat owners 

receive through investment and modernisation of such yacht marina facilities. 

In addition, studies are being carried out to identify potential new sites for new marinas and 

destination ports. 

Currently, studies are being focused on the development of marinas in St Paul’s Bay and 

Marsascala. From the preliminary findings, it is clear that each location should be protected 

by a breakwater which makes the possibility of private intervention more difficult, thus, there is 

the possibility of Government funding this public infrastructure. This should then make private 

investment more feasible. 

15 “A vision for Malta’s Grand Harbour”. Available Online from: 

https://secure2.gov.mt/mitc/MediaCenter/PDFs/1_16392-%20Grand%20Harbour%20insert%20ENG%20Small.pdf 

[lAccessed on 2 October 2008] 


Moreover, Government has set its vision for building breakwaters at the mouth of Marsamxett 

Harbour. According to studies already commissioned, such a construction would allow the 

creation of about 2,000 additional berths. 

Measure 2.15 

Initiate divestiture of the entire gas function & supply chain from importation of fuel to 

distribution in petrol stations from Enemalta Corporation 

The Enemalta Corporation will be transferring the management and operations of its LPG 

activities to a private company following approval by Parliament. This bidder was chosen 

following a competitive tendering process. As part of the conditions the bidder will be building 

and operating a new state of the art and fully certified LPG bottling and storage facility at 

Bengħajsa with an investment of over €25 million. The new storage and bottling plant will 

fully respect the EU stringent criteria as established in the Seveso II Directives, recently 

adopted by Malta. 

With regard to the fuel storage installation, this measure has been changed somewhat since 

the corporation is in the process of commercialisation. Thus, the relocation is to be executed 

by the preferred bidder after the signing of the concession. Hence, this measure is no longer 

in the hands of the Maltese Government but will now be the remit of the private sector. 


Employment 

Increasing employment is one of the key thrusts of the Lisbon Agenda and also one of the top 

priorities in the current Maltese administration. Through the main thrusts in this area, Malta’s 

unemployment rate by gender has decreased in the past year to 6.4% which is below the EU 

27 and 25, at 7.1% and 7.2% respectively. 16 

Nevertheless, Malta has some challenges to face particularly in the areas of older workers 

and women. In this respect, one has also to keep in mind the socio-cultural characteristics of 

the Maltese scenario. The Maltese society places a great deal of emphasis on the concept 

of the family, thus it is a known fact that attracting females back to the labour market is 

particularly challenging. This is particularly the case with older women who due to the 

traditional and cultural forces around them, may have never been in actual formal 

employment. This situation is particularly evident when one notices that with younger people, 

the employment rates are particularly promising with 44.3% of the 15-24 age bracket and 

68.2% of the 25-54 age bracket in employment as opposed to 28% for the 55-64 bracket. 17 

Nevertheless, Government is committed to continue working to increase the employment 

opportunities, as well as facilitating the return to employment of these segments of society by 

providing a framework that facilitates the work life balance and family friendly measures. 

The state of play of the NRP 2005-2008 measures relating to employment are outlined below: 

Measure 3.1 

Revise the Employment and Training corporation (ETC) youth strategy to address the needs 

of the youth group and to generate personalised employment paths for unemployed youths 

The first draft of the Youth Strategy 2008/2009 was approved and a consultation forum was 

organised in February 2008. Following this consultation process the strategy was officially 

launched on the 20th May 2008. 18 Its main aim is to encourage more youth to pursue 

continuous education and integrate in the world of work, with the necessary skills needed by 

the economy. 

More concretely this strategy aims to: 

• develop a strategy for its youth client group for a two year period; 

• Develop career paths for youth unemployed; 

• Youth website ; 

• Early School Leavers Training / Basic Employment Training; 

• Enhance Youth Guidance services / Introduction of new Employment Measures; 

• Youth Employment Measures; and 

• Developed personalised action plans for youth unemployed. 

For the period October 2007 till January 2008 the ETC has placed 2051 youths in full time 

employment and 433 in part time work. 

Measure 3.2 

Train and engage mothers absent from the labour market 

Mothers are the primary educators of their children, thus it is believed that these can 

undertake occasional remunerated educational service work that will not disrupt their family 

routine and child rearing. 

16 Eurostat Structural Indicator, Unemployment Rate by Gender, 2007. 

17 NSO News Release 173/2008, 1 st October 2008 Labour Force Survey Q2 2008, 

18 Youth Strategy 2008/2009. Available online from http://www.etc.gov.mt/docs/ETC%20report.pdf [Accessed on 1 

October 2008] 


The first phase of this initiative is in progress and achieving promising results with a number 

of licensed child minders, parent leaders, and school helpers resulting from the various 

programmes. 

More specifically these programmes consist of: 

• The NindokraPlus Service where non-working mothers trained for occasional work as 

childminders with a cadre made up of 47 trained and licensed childminders. Of these 

23 provide service according to the demand. Nine of these hail from Gozo; 

• A cadre of parents trained for educational leadership roles in schools and local 

communities. To date, cadre made up of 32 trained and licensed Parent Leaders. As 

from January 2008, Parent Leaders are paid for the service they are offering. A project 

intended to expand this area of operations has been submitted for ESF funding. Project 

approval and funding are still pending; 

• A cadre of parents trained to co-work with teachers on the design and delivery of skillsbased 

courses for parents at community level. To date, parent helpers are providing 

this service on a voluntary basis as part of their induction training and practicum. 

Measure 3.3 

Review tax and pensions system to encourage female participation in the workforce 

This measure has been completed in the Budget 2006 and 2007. Selected initiatives include 

the reviewing of income tax bands, replacement of the National insurance contribution to a 

pro rata basis, recognition of married women workers within a family business as well as a 

possible tax rebate on childcare expenditure. Moreover the amendments to the part time 

workers regulations to favour more the possibility of part time work are envisaged to promote 

the increase of female participation in the workforce. 19 

Measure 3.4 

Promote family-friendly measures 

The Employment and Training Corporation implemented a number of initiatives which 

included training, awareness raising campaigns, research and the implementation of various 

EU funded projects. 

Gender equality features high on the agenda of family friendly measures (FFM). The ETC 

published its third Gender Equality Action Plan for the years 2007 and 2008 20 . This plan 

outlines the projects and initiatives that are to be undertaken over the next two years. 

Moreover, an intensive campaign on family friendly measures was undertaken in collaboration 

with University students. This campaign highlighted the benefits that FFM such as telework 

and job sharing bring to both the organisations and employees. 

IN addition an ESF campaign (ESF 50) promoting the benefits of Quality Childcare was 

launched in order to raise awareness about quality childcare. This campaign made use of all 

forms of media and also a national conference on issues related to quality childcare. A 

information website 21 has also been launched and provides guidance on choosing quality 

childcare centres as well information on child care services available. 

Another ESF funded project (ESF24) was implemented in order to increase Female 

participation through Childcare services at the workplace. Eleven childcare courses have 

been funded through this project in order to ensure a supply of qualified child carers at 

workplaces. 

19 This measure has also been addressed in Measure 01.1 in the Macroeconomic Section 

20 

Gender Equality Action Plan 2007-2008. Available online from: 

http://etc.gov.mt/docs/ETC%20Gender%20Equality%20Action%20Plan.pdf [Accessed on 1 st October 2008] 

21 Available online: http://www.childcaremalta.org/etc/home.aspx [Accessed on 1st October 2008] 


It is also worth mentioning that family friendly measures in the public service have been 

extended to the wider public sector. This is particularly significant in the case of working 

mothers who can now enjoy the flexibility that these measures offer, thus facilitating the 

balance between employment and family life. These family friendly measures include but are 

not solely limited to: 

• Maternity leave 

• Parental leave 

• Paternity leave 

• Responsibility leave 

• Adoption leave 

• Leave to foster children 

• Work on a reduced timetable 

• Marriage leave 

In the new collective agreement for public servants, there is also the provision of exploring 

arrangements such as flexitime, teleworking and job sharing. 

Measure 3.5 

Develop a programme obliging the unemployed beneficiary of subsidies to attend training and 

community services 

This programme is currently in force with all persons registering for unemployment benefits 

having to attend compulsory training courses as well as interviews for employment. If any 

registered unemployed does not attend these schemes he is automatically removed from the 

unemployment register. 

• The schemes available for these unemployed include 

• ETC training courses 

• Referral to job opportunities 

• Long term unemployed exercise 

• TEES – A scheme that consists of six months training followed by six months of work 

exposure with an employer. This scheme is targeted for persons over 40 years of age 

• An ESF funded literacy programme for those seeking employment 

In this regard the ETC has trained 20,646 persons in the period October 2004 to January 

2008. For the same period 268,226 persons have been referred to attend job interviews. 

Measure 3.6 

Review policy in the field of employment of third countries nationals 

The ETC has applied for funding under the EU Integration Fund in order to commission an 

assessment of the situation of foreigners employed in Malta. ETC is currently awaiting a reply 

on its application for the EU Integration Fund. 

Measure 3.7 

Set up a Central Visa Unit to better manage visa and work arrangements for third-country 

persons required to address local labour shortage 

Visa consultations with Member States have been enhanced through the set-up of this Unit. 

Measure 3.8 

Launch the Foster Entrepreneurial Skills scheme 

Another measure being promoted so as to increase the employment rate is the promotion of 

new business start ups. 


Between 2005 and 2006, 37 22 participants started the entrepreneurship scheme (INT 

scheme). New businesses which use the INT Scheme included diving schools, artworks and 

retailing, importation and sale of collectible and antique firearms, electrical handyperson 

services, and holiday letting. Small business and management development programmes 

were attended by 98 persons, 44 of whom were women. 

During 2007, Government also completed another measure aimed at fostering an 

entrepreneurial culture in Gozo which has led to the opening up of 14 23 new start ups in Gozo. 

These represent 5.4% 24 of the annual average new VAT registered self employed who have 

their business address in Gozo. 

22 Employment and Training Corporation, Annual Report 2005 – 2006. Available online from: 

http://etc.gov.mt/docs/ETC%20ANNUAL%20REPORT%201-26.pdf . [Accessed on: 6 th September 2007] 

23 Ministry for Gozo 

24 ibid 


Education and Training 

The objective of Government’s Vision 2015 is to make Malta a centre of excellence in various 

areas in order to entice foreign investment. Education is a key factor in the success of this 

vision, since the adequate supply of skilled labour is fundamental to achieve excellence in any 

area. Malta’s educational system is based on the fact that compulsory education is 

mandatory till the age of 16. Following this age it is up to the students to further their 

education in the various institutions that provide higher education. 

Government has increased its expenditure for 2008 by €21million 25 in the educational field in 

all areas of education to enable students to obtain a better level of education. 

In compulsory education, Government is implementing reforms to change the structure of 

state schools into colleges, thus aiming to achieve a better teaching delivery as well as 

increased use of IT. The rest of the schools are undergoing a process of upgrading and 

refurbishment. 

In terms of vocational and higher education government has also invested particularly in 

areas of science and technology in order to ensure a supply of skilled labour to the new 

enterprises currently being targeted for foreign direct investment. 

The state of play of the Education and Training pillar measures is outlined below: 

Measure 4.1 

Implement the reforms of the compulsory education system in the strategy document entitled 

"For all Children to Succeed" 

The reforms in this initiative are in a very advanced stage of completion. The Colleges are 

now up and running with the College Principals employed and functioning. 

The reforms in the Education Division have been concluded. This structure was changed into 

two separate Directorates General - the Malta Educational Directorate and the Educational 

Services Directorate respectively. The Malta Educational Directorate will act as a central 

national policy maker and regulator for the Maltese educational system and will be 

responsible for the setting of standards and ensuring the delivery of quality education. On the 

other hand, the Educational Services Directorate is responsible for the co-ordination of the 

operation of educational services and schools, and fulfils the role of a support and services 

resource. 

Currently a number of schools are being refurbished and others being built in order to extend 

the current stock of schools. A new secondary school in Qormi has been completed whilst 

the Verdala school is close to completion and with all the timeframes being respected. The 

construction of the Pembroke School has commenced and construction is soon to start at a 

school in Mosta. 

Measure 4.2 

Set up a higher education directorate 

This Directorate has been set up and currently close to its full complement. Since its 

permanent establishment, the NCHE has started addressing a number of critical matters 

including the following: 

• Governance of state higher end further education institutions in Malta 

• A quality assurance framework for institution and course accreditation 

• Student support schemes to further their studies at undergraduate, masters and 

doctoral levels 

• Support and advice on the development of a strategy for the use of structural funds in 

the further and higher sectors 

25 Budget Speech 2008. Available online at http://finance.gov.mt/image.aspx?site=MFIN&ref=2008_speech_en 

[Accessed 2 nd October 2008] 


A consultation paper on the introduction of a new framework for licensing, accreditation and 

quality assurance of further and higher education institutions in Malta has been published. 

Measure 4.3 

Initiate training in basic computer skills for those registering for employment and establish 

Community Technology Learning Centres 

A Community Technology Learning Centre has been established in Vittoriosa in 2006. This 

training centre is considered to be successful in view of the fact that until the end of June 

2006 a significant number of persons have already successfully completed the courses. 

Moreover, another Centre in Valletta and a computer laboratory in Hal Far have also been set 

up. 

These centres provide training in basic IT skills and is provided to both jobseekers as well as 

employed people who want to enhance their employability. 

These centres have been attended by 933 persons in the period for October 2006 to 

September 2007. Figures for the period October 2007 to January 2008 show an attendance 

of 384 persons 26 . 

Measure 4.4 

Intensify guidance services in order to enable the establishment of a comprehensive career 

pathway 

The ETC in collaboration with the Euro Guidance falling under the responsibility of the 

European Union Programmes Agency (EUPA) in conjunction with the Education Division’s 

Guidance Unit have carried out research on career paths. This data has been compiled and 

100 career paths are now available online on the EURES website (www.eures.com.mt). 

Furthermore, in May 2007 a new EURES website was launched which includes details of 

local employers, local and foreign vacancies together with other information related to 

employment mobility. Works are also underway to launch a new ETC website which will 

include more on-line services for both job seekers and employers, such as an online 

matching service. 

The ETC also provided personalised career guidance services to registered unemployed, 

adults at risk of redundancy, women returners and persons from disadvantaged groups. 

On 22 February 2008, the Youth Employment Programme was launched. The project's target 

group will benefit through this project in the following ways: 

• Clarification of career choices and pathways to achieve them; 

• Improved skills in areas related to their career choice; 

• Improved skills in seeking and applying for work; 

• Greater awareness of one’s rights and obligations as a jobseeker and prospective 

employee; 

• Increased contact with employers, bettering their chances of finding work 

Moreover, a call for guidance officers for ex VF / Bortex employees has been issued on 24 

February 2008. These officers will be requested to work with the clients to help them clarify 

their abilities, aptitudes and aspirations to develop suitable career paths. This call for 

occupational guidance services is being undertaken under the European Globalisation 

Adjustment Fund. 

26 Figures provided by the Employment and Training Corporation 


Measure 4.5 

Ensure that formal informal and non-formal qualifications and skills are certified 

The Malta Qualification Council (MQC) was set up in December 2005 and met for the first 

time in the third week of January 2006. During 2006 and the first quarter of 2007, MQC 

conducted a nation-wide consultation process to set up a National Qualifications Framework 

for Lifelong Learning. 

The start date for the mapping of informal and non-formal learning according to nationally 

agreed key competences was in September 2006. The process ended in April 2007 and the 

National Qualifications Framework for Lifelong Learning was launched in June 2007 27 . During 

the consultation process, MQC met public and private training providers (including MCAST, 

ETC, ITS) non-governmental organisations, students and parents’ organisations, trade unions, 

employers associations and other individuals with a direct or indirect interest in the 

recognition and accreditation of qualifications. 

The MQC has published four working documents on Malta’s qualifications framework, a 

system for vocational education and training linked to the NQF, a quality assurance policy as 

well as Level descriptors for Key Competences for Levels 1, 2 and 3 of the NQF. These 

documents aim at ensuring that formal, informal and non-formal qualifications and skills are 

certified. 

In June 2008, MQC published the last of the four policy documents (The Validation of Informal 

and non-Formal Learning) 28 . A national conference was organised on the 25 th of September 

2008 in collaboration with FHRD (Foundation for Human Resources Development) ,inviting 

two international speakers from France and Finland, on the Validation of Informal and Non- 

Formal Learning. A report on the consultation on such policy was also published. 

The process for the mapping of formal, informal and non-formal qualifications and skills has 

commenced and should be finalised in the fourth quarter of 2008. 

Measure 4.6 

Initiate teacher training for new competences linked to parent capacity building, prevention of 

social exclusion, the nurturing of active citizenship and the provision of community based 

lifelong learning opportunities 

This measure has been completed since according to the agreement between the 

Government and the teacher’s union, teachers are required to follow compulsory training in 

various competencies. 

Between April and July 2008, the following training sessions have taken place: 

• 4 in-school Professional development sessions reaching 82 teachers; 

• 2 in-house In-Service Training courses reaching 26 teachers; 

• on-the-job training for 236 primary school teachers from 40 different state primary 

schools in the use of a multi-sensory approach to the teaching of Maltese and English, 

including synthetic phonics; 

• on-the-job training for 55 primary school teachers from 18 different state primary 

schools in the use of writing process methodology; 

• 1 week writing process training course for 45 primary and secondary state school 

teachers. 

Malta’s application under a call for EU funding in order to further these programmes has been 

rejected. However, MEDC will still continue to offer more programmes to this effect. 

27 Available online from: http://www.mqc.gov.mt/pdfs/mqc%203gateA4%20english.pdf [Accessed on: 3 October 2008] 

28 The four working policy documents entitled Valuing All Learning 1-4, are available online from 

http://www.mqc.gov.mt/news.aspx?nid=1 [Accessed on 3 rd October 2008] 


Measure 4.7 

Establish a forum between ETC, UOM, MCAST, ME, FOI, NSO and other stakeholders with 

the aim to monitor the matching of the demand and supply side of skills. 

This initiative is currently underway. A conference with all the stakeholders was held in 

September 2008. As a result of this conference, a report is to be drawn up by the end of 

2008, the input of which will be used in the formulation of the Further and Higher Education 

strategy. 


Environment 

Environment is an area that is featuring high on Government’s agenda in all areas of 

governance. The strive towards sustainability in all areas is characterised by a number of 

initiatives that entail protection of the environment that surrounds us. Moreover, taking into 

account the current global dependency on fossil fuels that is reflected by increasing oil prices, 

it is evident that it is imperative that alternative sources of energy are tapped into. Malta is 

exploring various means to lessen its dependency on fossil fuels. 

Waste Management is another area that Malta is addressing by means of promotion of 

recycling of waste, rehabilitation of dump sites as well as regulated and controlled sites where 

citizens can dispose of their waste in a better way. 

The state of play of Malta’s environmental measures in the NRP 2005 -2008 is outlined below: 

Measure 5.1 

Develop a National Biodiversity Strategy Action Plan. 

The development of the National Biodiversity Action Plan (NBSAP) is still in progress due to 

some constraints in the allocated resources for this project. Meanwhile two public seminars 

and various public awareness activities have been held with satisfactory results. Several 

NBSAP sub-reports addressing the different drivers of biodiversity change and cross-cutting 

issues have been drafted. These are currently undergoing consultation within MEPA. The 

compilation of sub-reports now also includes the development of action plans proposing the 

way forward for mainstreaming biodiversity concerns into relevant sectors, apart from just 

presenting data/information available to date of the sub-report topic in relation to biodiversity. 

In addition, the NBSAP report template has been sent to the relevant government entities in 

order to provide the necessary information on how activities within their remit interact with 

biodiversity as part of the country study. Tailor-made questionnaires were also developed 

and sent to two target groups (1) NGOs (2) research and education entities. 

Furthermore, nominated representatives from government entities are being received. These 

representatives will appear on the NBSAP coordinating committee at a later stage to discuss 

and agree on the actions recommended in the respective NBSAP sub-reports. These action 

plans once agreed by the NBSAP-CC will form the crux of the NBSAP document. 

Measure 5.2 

Conduct marine-scientific surveys for Fifla as a Special Area of Conservation 

The aim of this project was to obtain accurate scientific data on the area around Filfla. This 

was necessary for the designation of the area around Filfla as a marine Special Area of 

Conservation (SAC). Data was compiled through field surveys, using various techniques, 

including diving and remote surveillance by submersibles. This data was then analysed and 

results were portrayed in comprehensive reports on the status of marine biodiversity and 

habitats in the area. In fact a compendium of information about the site, its habitats and 

species has been drafted. 

In addition, a public seminar and awareness raising campaign has been carried out following 

this report. Government has also installed a fixed telescope in the nearby mainland, with the 

aim of enabling tourists and visitors to get a closer view of the island’s habitats and species. 

Measure 5.3 

Develop a Regional Project for Marine and Coastal Protected Areas 

This measure calls for the Development of a management plan on the basis of a 

management framework for the Marine Area from Rdum Majjiesa to Ras ir-Raħeb. After 

discussions held with the European Commission, it has been decided that Malta will follow the 

EU Rolling Plan. Such plan requires that Malta drafts a Strategy which outlines the process 

for selection and establishment of Specific Areas for Conservation and Marine Protected 

Areas (MPA). 


Within this context, an MPA Steering Committee has been set up with a view to oversee the 

management and enforcement issues of the sites to be chosen or already chosen and will be 

in operation legally by 2009. It is envisaged that the MPA strategy will be approved for 

consultation by the end of 2008. These developments have had an impact on the status of 

this measure which is slightly behind schedule. Notwithstanding, Government has: 

• Zoning plans; 

• Published educational material in relation to this MPA; 

• Carried out public consultation seminars; 

• Drafted the legal designation of the MPA. 

Measure 5.4 

Strengthen the institutional capacity for the implementation of the Nature Protection Acquis 

The Malta Environment and Planning Authority (MEPA) has benefited from a Twinning project 

with Austria (in consortium with Italy) 29 . Through this measure, MEPA has carried out various 

information meetings, seminars, workshops and general awareness raised. Moreover, 

additional staff has been trained by means of 15 week traineeships in this area. 

Measure 5.5 

Construction of three sewage treatment plants, all the sewage will be treated 

Over the 2005-2008 period the Maltese Government has initiated the construction of three 

sewage treatment plans; in Gozo, the northern part and southern part of Malta. The aim of 

these new plants is to ensure that all treated sewage conforms to the standards laid out in the 

Urban Wastewater Directive. The Gozo plant was the first of the three new 

Wastewater Sewage Treatment Plants which was inaugurated in January 2008. This new 

sewage treatment plant at Ras il-Ħobz, limits of Ghajnsielem which will eliminate the 

discharge of raw sewage into the sea. The North plant was completed in September 2008. 

The plant is expected to be fully operational in October 2008, when the biological treatment 

process is fully established. 

The contract for the construction of the South plant project has been signed in August 2008. 

This will be the largest plant of all with a capacity to treat about 80% of all sewage generated 

on the Maltese Islands. Furthermore, the plant will restore bathing water quality status to the 

lower North Easterly coast spanning between Rinella and Zonqor, which is of significant 

importance both for the inhabitants of the areas, as well as the tourism potential due to the 

Smart City Project in the area. 

Measure 5.6 

Draft a national Environnent Technologies Action Plan. 

A departmental draft of the Plan has been finalised and will be adopted imminently. Some of 

the actions put forward within the draft ETAP have already been implemented. Such actions 

include environment related fiscal incentives and Green Public Procurement. 

Measure 5.7 and 5.9 

Prepare and implement Green Procurement Plan (GPP) 

The Maltese Government has launched the Green Office Label certification scheme for 

government ministries, departments and agencies which run their offices according to 

environmental best practices. These best practices adopted in the public sector include 

environmental planning, waste reduction, energy conservation, water conservation, transport 

and green public procurement. 

The GPP has been submitted for Ministerial approval however this measure is behind 

schedule. 

29 Information available online from: http://www.ppcd.gov.mt/twinning [Accessed on: 29 September 2008] 


Measure 5.8 

Introduction of the Polluter Pays Principle, through economic instruments 

This measure has been completed through various instruments that imply that payment for a 

service or product is based on the consumption or the generated pollution. This latest reform 

using this principle is envisaged to be the Annual Vehicle Registration and Annual Circulation 

Tax which should be announced in the near future 30 . 

Measure 5.10 

Capture of methane from waste disposal and treatment 

The project ‘Aerial Emissions Control for Magħtab, Qortin and Wied Fulija Landfills’ is being 

co-financed from the European Regional Development Fund (ERDF) 2004-2006. With an 

investment of €10,398,326 31 , the aim of this measure is to implement an aerial emissions 

control programme and initial rehabilitation of three landfill sites: Magħtab, Qortin and Wied 

Fulija. 

Magħtab 

The works at the Magħtab site included the installation of 41 wells, the laying of the gas mains 

and all interconnecting pipework, as well as the installation of the phase 1 gas treatment plant 

and compound. Between March and June 2007, all the equipment including the Thermal 

Oxidiser and all its ancillary equipment had to undergo a continuous period of trial testing in 

order to assess its performance on the field. To compliment this testing, gases collected from 

each well and manifold were monitored twice weekly. A further 27 wells of a depth of 6m 

were installed. Works on the pipe work connecting these wells to their respective manifolds 

was completed during October 2007. 

In addition, all major enabling and earthmoving works are complete. Currently, the small gas 

compound is in operation. The big gas compound will soon start operating. 

Qortin 

After the shifting of some 70,000m 3 of material for stabilisation, surface gas tests were 

implemented. The results have led to the requirement of a more intense investigation to 

confirm needs of gas collection and treatment at this site. This has led to some technical 

considerations which are currently being implemented. 

Wied Fulija 

Surface gas emissions monitoring is ongoing. 

This project involves setting up systems to capture and treat those landfill gases which are 

currently released into the atmosphere, thereby reducing emissions by 50%. 

This project is currently ongoing. 

Measure 5.11 

Replace uncontrolled landfills and improve treatment of Municipal Solid Waste (MSW) 

All uncontrolled landfills have been closed down and are to be rehabilitated. New plants for 

waste treatment which include energy recovery processes are being proposed. This project 

is still ongoing particularly due to the rehabilitation process in certain areas which is taking 

longer than expected. 

30 Vide Measure on Annual Vehicle Registration and Annual Circulation tax in the Climate Change thematic in Section 

C – Page 62 

31 

Aerial Emissions Control for Maghtab, Qortin and Wied Fulija Landfills. Available online from: 

http://www.eu4u.gov.mt/aerial_emissions.asp. [Accessed on: 29 th September 2008] 


The main plant of Sant Antnin is being constructed to improve treatment of MSW. Upon the 

completion of the upgrade of the Sant’ Antnin Waste Treatment Plant, it is envisaged that the 

plant will annually process and treat 71,000 32 tonnes of waste mainly resulting from the MSW 

produced by residents in the vicinity. The fully enclosed upgraded plant will include the 

following facilities: a Material Recovery Facility (MRF) for the manual sorting of dry recyclable 

waste recovered by the separation at source, a Mechanical Treatment Plant (MTP) to 

mechanically separate the MSW, a Digestion and Stabilising (Composting) Plant, a 

Combined Heat and Power Plant (CHP), a Regenerative Thermal Oxidiser (RTO) and a 

Waste acceptance station for the collection of data and control waste deposit at this site. 

It is envisaged that this plant will be operational in the 1 st quarter of 2009. 

Measure 5.12 

Promote use of bio-fuels through exemption from excise duties on importation; pilot collection 

scheme for the collection of used cooking oil 

Government has lowered tax on bio-fuels by 1% when compared to other fuels. During 2007, 

three companies were active in the Maltese bio-fuel market. Two companies produced 

biodiesel, one from recycled spent cooking oil and the other from imported raw material, 

whilst the third company recycled spent cooking oil for use as pure vegetable oil being 

marketed as a substitute for fossil fuel. 

All three companies retailed both to the transport and to the industry sector. One of the 

companies retailed pure biodiesel (B100) through petroleum filling stations in Malta. This 

proved very successful and in 2007 the number of stations retailing pure biodiesel continued 

to increase. Around 40% 33 of the total petroleum filling stations are now retailing biodiesel to 

consumers. Table 1 below shows the percentage of road transport fuels in Malta during 2007 

and the share of biofuels. 

Table 1 - Use of road transport fuels in Malta during 2007 and the share of Biofuels 

Type of fuel 

Million Litres 

Petrol 87.392 43.68 

Diesel 98.471 56.32 

Total Fossil Fuel sales 185.863 100 

Pure Vegetable Oil 0.038 0.02 

Biodiesel 2.022 1.06 

Total Biofuel Sales 2.060 1.08 

Measure 5.13 

% of total Petrol and 

Diesel sales 

Measure to encourage the greater utilisation of non-conventional sources of water 

Government has been looking at various means of reducing the dependency on desalination 

plants as the main source of water in the islands. Desalination is the only option currently 

available however it is also substantially expensive both in financial and environmental terms. 

Studies are currently being conducted to establish the feasibility of capturing the storm water 

resulting in certain areas of the islands. The storm water infrastructure has been approved in 

order to alleviate the flooding problems; however the costs and feasibility to store this excess 

storm water and to promote its re-use for secondary usage still need to be established. This 

measure will continue within the next NRP cycle. 

32 The 71,000 tonnes of waste treated is made up of 36,000 tonnes of dry recyclables and 35,000 tonnes of organic 

waste. Figures available online from: http://www.wasteservmalta.com/main.asp?ID=18&TAB=Tab5 

33 Malta’s Annual Report for 2007 submitted to fulfil requirements of Article 4 of Directive 2003/30/EC on the 

promotion of biofuels and other renewable fuels for transport, Malta Resources Authority August 2008. 


Part B - Addressing Malta’s Specific Recommendations 


Political Summary 

The re-launch of the Lisbon strategy in 2005 has enabled Member States to focus their efforts 

towards growth enhancing activities which in turn have created more and better jobs within 

the economy. Malta was no exception, and has actively participated in the Lisbon process 

through the active implementation of its first NRP. 

Three years after launching of the first NRP, Malta has managed to register significant 

improvements. Real GDP growth rate has increase by over 2 percentage points in 2007 

when compared to 2004. In addition, General Government Deficit has decreased to 1.8% 

which is significant when compared to 2004 figures whilst also permitting Malta to join the 

Eurozone in January 2008. Malta’s drive towards the implementation of its NRP has 

contributed towards the achievement of a higher employment rate which increased by over 2 

percentage points [1] and stood at 55.2% as at June 2008 and a complementary decrease of 

1% in the unemployment rate when compared to 2004. 

The NRP subscribes to Malta’s Vision 2015 of “a dynamic, high value-added economy 

founded on competence, skills and excellence and capable of sustaining a high standard of 

living for its entire people.” In terms of the strategy to attain this vision, the Government 

aimed at having a well-diversified and productive economy that uses all its available 

resources effectively to generate economic and social well-being for all. Special focus will be 

dedicated to the six sectors highlighted by Vision 2015, namely: the creative economy and 

especially ICT; the financial services sector; tourism; high value-added industry and services; 

international educational services; and health services. In order to get there, a number of key 

fundamental elements that would contribute towards increased national productivity and 

competitiveness were identified. 

Over the last three years, the Maltese Government has committed itself to further stimulate 

the economy by shifting its role from operator to regulator. Within this context, Government 

has privatised a number of state-owned entities in various sectors including: ports, postal 

services and yacht marinas. This not only ensures a more focused role for Government but 

also stimulates the economy by offering additional business opportunities, strategic 

partnerships and an improved service to customers. 

Concurrently, public and private investment in infrastructure and productive capacities has 

been encouraged, whilst keeping environmental considerations in mind. The support of 

enterprise and the creation of an entrepreneurial culture in order to create a more dynamic 

and flexible economy with an increased capacity to adapt to change has been pursued. 

Government is focusing more on creating the right environment for businesses to invest and 

grow. Competition and flexibility in our markets in order to improve our economy’s capacity to 

adapt to changing trends and developments and the delivery of public services has improved. 

Investment in research and innovation in order to sustain the creation of a high value-added, 

technology-intensive and knowledge-based economy has increased. 

Tourism is one of the main pillars of the Maltese economy. Investing in the tourism sector is 

deemed as a major contributor towards Malta’s competitiveness. Government has continued 

to promote the cruise liner shipping industry whilst also moving towards the introduction of low 

cost carriers with a view to expand the tourism sector. The actions pursued within the first 

cycle of the NRP have contributed towards the improvement of the tourism package. In fact 

an increase of 7.41% has been registered in inbound tourism in 2007 when compared to 2004. 

Malta’s most valued resource is its human capital. Hence, Government will continue 

increasing its investment the education and training fields. Efforts to reduce the number of 

early school leavers and increase the level of education especially at the tertiary level will 

continue to be sustained over the next cycle. It is envisaged that Malta’s educational 

infrastructure will continued to be transformed in such a way as to offer all citizens the 

opportunity to improve themselves and avoid anyone being left behind. 

[1] Increase has been registered between Q2 2004 and Q2 2008. 


Investment in education and skills will contribute to ensure a highly prepared, versatile and 

flexible workforce and to fulfil the right conditions for people to make their own choices, to 

achieve their full potential and to excel. 

In its Annual Progress Report, the Commission has made a series of recommendations which 

need to be addressed over the next three year cycle. Within this context, the Maltese 

Government will address the Country Specific Recommendations and Points to Watch which 

have been proposed by the Commission with a view to achieve the Lisbon targets. These 

recommendations include: the strengthening of the competition authority and opening up 

professional services, the reduction and redirection of state aid, step up efforts to attract more 

people in the labour market in particular women and older workers, continue implementing 

and reinforcing measures on health care reform; improve the regulatory environment, 

introduce effective one-stop-shops for business start-ups; diversifying energy sources and 

raise educational attainment and reduce early school leaving. 

Whilst Malta will focus its efforts in achieving the above recommendations, Malta is cognisant 

of both its strengths and comparative advantages and external environment challenges. 

Experience and research on the country’s competitive position have established our 

competitive advantages as being: a stable macro-economic environment; a well-developed 

financial and taxation infrastructures; well-educated, highly-skilled and flexible workforce; a 

clear, transparent and stable administrative and regulatory regime; a robust and dynamic 

information and communications technology infrastructure; and, Malta’s membership of the 

European Union and of the Euro-zone. In this regard, Government intends to continue 

building on our national achievements thus far in order to take the country forward towards a 

higher level of sustainable development. 

Country Specific Recommendations and Points to Watch are not the only challenges which 

need to be faced within the next three years. Global challenges that have prevailed during 

the current programming period are likely to continue to characterise the environment within 

which we operate. The recent crisis in the financial markets and the relatively high oil prices 

will no doubt spare any country from being impinged – to this Malta is no exception. Yet we 

are committed to work as hard as possible in order to overcome these market 

conditions. Malta is convinced that the Lisbon objectives for growth and jobs befit all EU 

Member States and that their implementation will translate into a better quality of life for all 

our citizens. 


Addressing Malta’s Specific Recommendations 

Strategic Direction 2008 - 2010 

The first cycle of the Lisbon Strategy has contributed towards improving Malta’s economic 

growth and the provision of more and better jobs. The strategies proposed within the first 

NRP have over the past three years yielded significant improvement in a number of areas 

including the tourism, employment, education and environment sectors. The improvements 

registered in these areas are encouraging, however, Malta is undertaking further actions and 

reforms with a view to achieve the Lisbon objectives. 

The Annual Progress Report presented by the Commission in December 2007 has given a 

clear indication as to those areas which require immediate action by the Maltese Government. 

Malta’s second NRP builds upon the first NRP 2005 -2008 and the developments that ensued 

during this period also taking into consideration the Country Specific Recommendations and 

the Points to Watch as well as the Spring European Council Conclusions in the four priority 

action areas. 

Addressing Malta Country Specific Recommendations 

In its 2007 Annual Progress Report, the Commission highlighted Malta’s need to address its 

weaknesses in relation to competition policy and persistent labour market problems. Within 

this context, the Commission recommended that Malta: 

• “strengthens competition, notably by reducing state aids and redirecting them towards 

horizontal objectives as well as by reinforcing the competition authority and by further 

steps in opening up professional services; 

• steps up efforts to attract more people into the labour market, particularly women and 

older workers; maintain efforts to tackle undeclared work and take further action on the 

benefit system to make declared work more attractive.” 

Reinforcing the competition authority to strengthen competition 

The Government of Malta remains determined to strengthen the competition authority in order 

to improve Malta’s competitiveness. In 2007 a new Director General and a Director for 

Competition were appointed with a view to provide the necessary skills and expertise which 

were required within the Consumer and Competition Division within MFEI. 

Furthermore, a capacity building exercise was conducted within the Office of Fair Competition 

(OFC) with a view to identify any human resource gaps in the various areas of operation of 

the OFC. Following this capacity building exercise, the Consumer and Competition Division 

issued a number of calls for the recruitment of qualified personnel in the Legal, Economic, 

Pharmaceutical and Cost Accounting areas. Further recruitment is envisaged in the 

economic and accounting sectors in the coming months. Over the next cycle of the NRP, it is 

envisaged that the OFC increases its technical staff by 20% with a special emphasis being 

made to address the following areas: school transport, transport coaches and motor hearses. 

It is envisaged that through this exercise, the OFC will have the necessary capacity to extend 

its capability to monitor price movements, undertake market analysis, merger studies and 

take a more proactive approach in investigating allegations of market abuses. This 

strengthening process will also permit the OFC to develop appropriate leniency programmes 

and their proper implementation. 


Amendments to the Competition Act (Cap. 379) 

The Maltese Government is in the final stages of completing the amendments to the current 

legal framework with a view to reflect modern trends and therefore key changes to the 

present enforcement system will include: 

• a shift from the present criminal fining system to one of administrative fines; this will 

empower the OFC to actually impose fines on infringing undertakings, whereas under 

the current enforcement system fines may only be imposed upon conviction by a court 

of criminal jurisdiction; 

• clarifying and improving the standard procedure for investigation of infringements of 

Competition law – which include increasing the investigative powers of the OFC and 

introducing certain standard procedures into the current decision-making process with 

the aim of increasing transparency (in particular, clarifying the OFC’s obligation to issue 

a detailed statement of objections and to allow access to the file to the investigated 

undertakings);and 

• simplifying the decision-making process by entrusting decision making powers to a 

single body – namely OFC, whereas currently there is a two tier structure, with the OFC 

empowered to conduct investigations of serious infringements of the local Act and 

infringements of Article 81 and Article 82 EC while decision-making powers are 

entrusted to the Commission for Fair Trading. 

The introduction of a leniency programme 

The OFC will introduce a leniency programme with a view to counter cartels as these have a 

damaging effect on consumers and the economy. This will permit the OFC to carry out its 

work in this area more effectively. 

In addition, it is to be noted that the current fining system provided for under the Competition 

Act (Cap. 379), whereby fines for the infringement of competition law may only be imposed 

upon conviction by a criminal court, does not allow for the adoption of any such leniency 

policy by the OFC. It must be pointed out that although the Competition Act does not 

concurrently contemplate a leniency policy. Nonetheless, it does provide for the possibility of 

extinction of criminal liability with regard to competition law infringements, upon signing of an 

agreement between the Director of the OFC and the offender. Thus, Article 26B of the Act 

provides that the Director of the OFC is to enter into an agreement in writing with the offender 

whereby the said offender pays or gives security to the satisfaction of the Director for the 

payment of a sum not less than fifty per centum of the minimum penalty applicable for the 

offence in question, and not more than seventy per centum of the maximum penalty 

applicable for the offence. Upon the signing of such agreement by the Director and the 

offender, all criminal liability of the offender under the Act with regard to the offence in relation 

to which agreement has been entered shall be extinguished. 

To strengthen competition, notably in professional services 

The OFC has continued internal consultations with Ministries and professional bodies 

responsible for the regulation of the liberal professions, in order to identify existing restrictions 

imposed by State legislation or self-regulation by professional bodies which may potentially 

raise competition concerns. 

The Competition Authority has finalised a first round of meetings with the pertinent authorities 

in order to identify possible problem areas. Meanwhile, the Office also conducted an 

independent assessment on the implications on each of the six professions. For each 

profession the said report deals with each category identified by the Commission as being of 

possible anti-competitive areas, that is: 

• Entry and Exclusive rights; 

• Fee Structure; 

• Advertising; and 

• Business Structure. 


Whereas it may be confidently ascertained that there do not seem to be insurmountable 

difficulties in the majority of the professions, such as engineers and pharmacists, some 

difficulties may arise in the legal professions, that is, lawyers and notaries. These difficulties 

will be better identified when a deeper analysis is conducted. 

Prima facie, there seem to be no restrictions in place which potentially raise competition 

concerns. Existing entry restrictions relate exclusively to educational and training 

requirements, and as such are deemed to be directly related and proportionate to the ultimate 

goal of ensuring the proper practice of the professions concerned in the general public 

interest. In particular, it must be noted that there are no quantitative restrictions on entry into 

any of the professions concerned. 

Furthermore, the imposition of fixed or recommended tariffs by these professions have been 

found to be present solely with regard to three of the six professions considered – namely 

lawyers, notaries and architects. In each case, fixed tariffs arise exclusively from national 

legislation – namely the Code of Organisation and Civil Procedure (Cap. 12). The remaining 

professions, on the other hand, enjoy complete freedom with regard to pricing of their 

services. 

With respect to restrictions on advertising, the Codes of Conduct relating to the architectural, 

engineering and legal professions respectively prohibit the soliciting of work and the offering 

of professional services through commercial advertising media, whilst permitting certain other 

forms of advertising insofar as they ensure the dissemination of objective information 

regarding the services supplied by individual professionals or firms. In each case, such 

advertising restrictions are aimed at avoiding the making of incorrect, misleading or 

exaggerated statements by professionals which may potentially misinform the public with 

regard to the provision of services involving a substantial ‘asymmetry of information’ as 

between customers and service providers. 

Reduce state aids and redirect them towards horizontal objectives, especially R&D 

The level of State aid granted in Malta during 2006 amounted to €115 million, thus reflecting a 

decline on the 2005 levels which stood at €146.6 million, and which represents 2.29% of GDP 

in 2006 compared to 3.16% in 2005. However, it should be noted that although Malta has one 

of the highest ratios of State aid to GDP, the share of the absolute amount of State aid 

granted by Malta represents only 0.15% of all the State aid granted by the EU-25 in 2006. 

Hence, the impact of possible distortion on competition in the total internal market is 

somewhat limited. 

The level and composition of State aid in Malta is also reflective of the need for specific 

interventions in particular sectors also deemed to be necessary during EU accession 

negotiations. These include the restructuring plan for Malta Shipyards and operating aid 

granted under the Business Promotion Act (Cap. 356) earmarked to allow for the orderly 

integration of the small Maltese economy into the European market. In the agriculture sector, 

State aid under the Special Market Policy Programme for Maltese Agriculture (SMPPMA) is 

being granted with a view to allow operators to adjust to the common market and protect 

consumers against abrupt increases in prices. 

Some State aid schemes consist of aid in the form of fiscal measures that are directly related 

to the future profitability of enterprises (most of which deal internationally). Moreover, some 

SMPPMA schemes are tied up to the international price of agriculture commodities (for 

example, cereals and sugar), thus making future projections of aid in this area is very difficult.. 

On this basis it can be noted that the trend in share of aid to GDP has been moving along a 

declining trend; down by some 0.72 percentage points for the period 2001-2006 in the case of 

total State aid granted by Malta and down by 1.21 percentage points if no account is taken of 

aid granted to the agriculture, fisheries and transport sectors. The reductions registered in the 

same ratios for the EU-25 are 0.05 and 0.07 respectively. 


Concerning horizontal aid one notes that over 70% of all aid granted in Malta goes to the 

manufacturing sector, primarily under existing aid schemes agreed with the EU during 

accession negotiations . As a result, the share of aid for horizontal objectives is comparatively 

low at 7.2% of total aid granted in 2006. This compares favourable with the level of 3.1% 

share registered in 2005. Moreover, the trend in the share of aid to horizontal objectives as a 

percentage of total aid is positive, and amount to 0.9 percentage points for the 2001-2006 

period. 

The specific realities faced by different Member States and regions should be appropriately 

taken into account. In this regard, small Island States like Malta face ad hoc geographical 

realities and disadvantages that cannot be sufficiently addressed only by horizontal measures. 

Given the nature of some of the State aid currently being granted in Malta it is not realistic at 

this stage to establish annual projections of State aid to be granted in a particular year. As 

pre-2004 schemes reach their end duration date as established in the Accession Treaty, it 

would be possible for Malta to determine annual State aid projections with an appropriate 

degree of certainty. . Moreover, as the restructuring aid package for Malta Shipyards ends in 

December 2008, the level of State aid granted in Malta to the sensitive sectors will decline 

significantly in future years. 

It is envisaged that State aid policy in Malta will in general continue to move towards less and 

better targeted aid. Particular attention will also be given to the promotion of horizontal State 

aid measures, which reflects the message given to Member States in the Stockholm 

European Council in 2001 to "demonstrate a downward trend in State aid in relation to GDP 

by 2003" and also to "redirect aid toward horizontal objectives". 

Given Malta’s status as an Article 87(3)(a) region, it is envisaged that development aid 

measures will continue to be implemented in the NRP period. The nature of such intervention 

would bolster the rhythm of socio-economic development in Malta, contribute towards the 

realisation of Malta’s Vision 2015, and also support the further integration of Malta into the 

European economy. 

Moreover, Government will continue to remain vigilant for market imperfection situations that 

may arise in specific areas, especially in the wake of the specificities of the economy, as 

State aid may be an important policy instrument to mitigate such situations. In this way 

appropriate measures may be necessary to support the competitiveness of the economy, 

whilst honouring State aid principles. 


Table 2 - Key State Aid Indicators 2006 

State aid as a % of GDP, 2006 

Total aid less 

railways 

Total state aid 

less 

agriculture, 

fisheries and 

transport 

Trend in the share 

of aid to GDP, 

2001 - 2006 

in % points 

Total aid 

less 

railways 

Total state aid 

less 

agriculture, 

fisheries and 

transport 

Share of aid 

to 

horizontal 

objectives 

as a % of 

total* aid, 

2006 

Trend in the 

share of aid to 

horizontal 

objectives as 

a % 

of total* aid, 

2001 - 2006 

in % points 

EU-25 0.58 0.42 -0.05 -0.07 85.2 17.0 

EU-15 0.56 0.41 -0.03 -0.04 85.7 12.4 

EU-10 0.91 0.52 -0.45 -0.82 78.3 36.0 

Belgium 0.39 0.28 -0.06 -0.05 97.8 -0.7 

Czech 

Republic 0.66 0.51 -2.33 -2.50 99.6 78.2 

Denmark 0.59 0.46 -0.21 -0.18 96.4 -2.4 

Germany 0.87 0.69 -0.09 -0.17 85.3 20.4 

Estonia 0.41 0.08 0.32 -0.01 100.0 5.5 

Ireland 0.57 0.28 -0.32 -0.19 80.5 26.2 

Greece 0.26 0.15 -0.12 -0.09 90.2 2.2 

Spain 0.50 0.39 -0.17 -0.18 72.1 14.3 

France 0.58 0.41 0.04 0.04 96.6 10.1 

Italy 0.37 0.26 -0.08 -0.08 95.6 0.3 

Cyprus 0.76 0.48 -1.56 -1.53 95.7 28.5 

Latvia 1.80 0.15 1.10 -0.05 99.9 51.7 

Lithuania 0.54 0.23 0.25 -0.12 100.0 73.6 

Luxembourg 0.32 0.13 -0.08 -0.07 100.0 0.0 

Hungary 1.57 0.93 0.48 -0.16 51.9 7.1 

Malta 2.29 1.77 -0.72 -1.21 7.2 0.9 

Netherlands 0.35 0.24 -0.06 0.03 97.4 1.5 

Austria 0.90 0.60 0.12 0.16 50.5 -21.8 

Poland 0.85 0.45 -0.30 -0.70 85.0 30.8 

Portugal 0.93 0.91 -0.05 0.04 13.9 -3.2 

Slovenia 0.83 0.48 0.21 -0.15 87.8 10.3 

Slovakia 0.51 0.45 0.11 0.08 94.6 14.3 

Finland 1.53 0.35 0.07 0.05 96.7 0.2 

Sweden 1.15 0.94 0.64 0.64 99.4 -0.4 

United 

Kingdom 0.22 0.16 0.00 0.02 89.8 5.3 


Step up efforts to attract more people into the labour market, particularly women and 

older workers 

Reaching the 40% female participation rate by 2010 will prove to be one of the major 

challenges to be reached by the Maltese Government. The primary challenge in achieving 

this target emanates from indications that the major hurdle is a cultural one. A major obstacle 

is to entice middle aged and older women to return to work, particularly since a number of 

these have either never participated within the labour market or else have been absent from 

the labour market for a considerable number of years. It is a known fact that many of these 

women have often remained at home in order to take care of the family. This fact is further 

reinforced when one notices that in the younger women (15-24 age bracket) the female 

employment rate registered a 5.5% increase to a total of 43.9% 34 when compared to the 

same period in the previous year. In the 25 – 54 age bracket the rate currently stands at 41% 

whilst the older women bracket (55-64) stands at 14.7 % 35 . 

Notwithstanding, Government is committed to increase the female participation rate and 

continues to intensify its efforts in this regard. In 2007, 1,712 women have been placed in 

employment, 2880 women have been trained, 36 and talks have been delivered to girls in 

schools in order to further encourage females to take up non – traditional female occupations. 

In addition, in its Budget Speech 2008, the Maltese Government launched various initiatives 

aimed to attract more women in the labour market. These include: 

• the establishment of a part-time employment register to cater for persons who are 

seeking part-time employment. This register was launched in early 2008, and allows 

women looking for part-time jobs to have the opportunity to be registered for such jobs 

enabling better matching between the demand and supply side of the labour market. 

Furthermore Government has enacted legislation to allow for the pro-rating of the 

National Insurance contributions and benefits for those working on a part-time basis; 

• as from 1 January 2008, paid maternity leave has been increased by another week 

amounting to a total of 14 weeks. Expenditure for the extra week will be borne by the 

Government by means of a credit in the social security contribution paid by the 

employer; 

• training of child carers to improve the provision of child care services. To this effect, 

Government has started an initiative whereby parents availing themselves from 

childcare facilities are now able to deduct €932 from the taxable amount to make good 

for part of the expenses incurred in licensed child care services. Furthermore, in those 

cases were employees receive payment from their employer for expenses related to 

childcare services, such payments are no longer considered as fringe benefits and will 

therefore no longer be taxable for the employee. At the same time expenditure related 

to childcare services is considered as business costs for the employer and therefore are 

deductible from taxable income. 

Through these measures Government has shown its commitment towards providing an 

encouraging framework and improved support services for mothers and women returning to 

work. It is worth noting that since these measures have only recently been launched their 

impact on the rate of women in employment cannot be established as yet. Moreover, the 

impact of such initiatives is difficult to measure since women returning to work can also be 

affected by other circumstances not necessarily linked to the above initiatives. 

Apart from offering the usual employment and training services, the ETC will continue with its 

efforts to empower young males and females to make the best possible career choices in line 

with their skills and inclinations and irrespective of gender stereotypes. In addition, in 2007 a 

Youth Strategy was launched with a view to further address youth unemployment. 

34 Labour Force Survey, January – March 2008, National Statistics Office, Malta 

35 Ibid 

36 Internal data provided by the Employment and Training Corporation. 


Older workers 

Increasing the employment rate of older workers to 32% by 2010 is another major challenge 

for Malta. During 2007, employment amongst older workers registered a decrease of 2.9% 

when compared to 2004. In Malta, the employment rate of older workers stands at 28.3% 37 

(compared to EU27 of 44.7%), although one must take into consideration the pensionable 

age of 61 applicable in Malta. The average exit age from the labour force stood at 58.5 38 in 

2006, which although the lowest in the EU27, represents an increase of 0.9 years over 2001. 

According to administrative data for the years 2005 to 2007 inclusive, the reasons for 

terminating employment among those aged 55 plus include: 

• retirement on pension (51%); 

• resignation (12%); 

• health reasons (10%); 

• redundancy or dismissal (10%); 

• end of contract (9%); and 

• other reasons (8%). 

Statistical analysis of this administrative data suggests a strong correlation between the skill 

level and the rationale for terminating employment, with higher skilled persons more likely to 

resign and lower skilled persons more likely to withdraw for health reasons or following 

redundancy. Resignation of older workers is most likely in the hospitality and real 

estate/business sectors; redundancy is most likely in manufacturing and hospitality; health 

reasons for exiting the labour market are most prominent in construction and the transport 

and communications sectors. 

Malta has pursued various actions aimed at improving the employment rate of older workers 

during the past twelve months. These actions include: 

• a promotional campaign which was held between January and June 2008 with a view to 

promote the integration of older workers. Several adverts were issued on the local 

newspapers and over 20 interviews were held on local radio and television stations; 

• the ETC organised two motivational seminars. During these seminars various speakers 

were invited and workshops were organised. Participants had also the possibility to 

discuss the various problems which they are encountering in finding a job; 

• new registered unemployed (including older workers) clients were called in to attend a 6 

hour job search seminar. During such seminars, participants are informed about the 

various services offered by the ETC and participants are also given job search 

techniques. These seminars are offered within the first 15 days of unemployment. 

After attending the job search seminar, each registered unemployed who is also an 

older worker, is assigned to an employment advisor. The employment advisor carries 

out an in-depth profiling interview with the job seeker before the first month of 

unemployment; and 

• a Personal Action Plan is drafted and reviewed on a monthly basis. 

In addition, during the Budget Speech 2008, Government introduced a new measure which 

will encourage older workers to remain active in the labour market. As of January 2008, 

persons who have retired are now able to keep on working and earn any amount of income 

without any reduction in the pension. 

37 Employment Rate of Older Workers as at 2007 abstracted from EuroStat. Available online from: 

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=0&language=en&pcode=tsiem020 [Accessed 

on: 01 August 2008] 

38 

Average exit age from the labour force as at 2006 (EuroStat). Available online from: 

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=0&language=en&pcode=tsiem030 Accessed 

on: 01 August 2008] 


Intensify efforts to tackle undeclared work 

A priority for the Maltese Government is to curb the amount of undeclared work. A Candidate 

Country Exhaustiveness Project was undertaken in 2002 by the National Statistics Office. 

This study established that the level of undeclared work in Malta then stood at 5.78% of GDP 

in 2002 (EuroStat 2002) which is within the EU average. 

A number of measures have been undertaken with a view to facilitate employment 

registrations for both employees and employers. Further to facilitating the registration of 

employees the other alternative is to apply enforcement measures in order to contain illegal 

employment. 

ETC has a Compliance Unit made up of a team of five inspectors who conduct on-site 

inspections and desk investigations on a daily basis to track undeclared employment. 

Legislation in Malta compels every employer employing a person to notify the ETC of such 

employment by sending an engagement form. This is a legal document and enables ETC to 

keep track of declared employment. Similarly, when an employer terminates employment of a 

person, a termination form is to be sent to ETC. A computerised database of persons who 

are in employment is thus maintained up to date. Persons not featuring in such database are 

not considered to be in legal employment. These notifications can be done by employers 

electronically in order to facilitate matters. 

On-site inspections are carried out to identify any infringements and employers found acting 

illegally are brought to Court. In 2007, a total of 878 persons were found to be working 

illegally and criminal proceedings have been initiated against the employers. 

Undeclared work is also fought through compulsory Active Labour Market Policies (ALMP) 

measures for the registered unemployed. Failure to participate in these ALMP’s will result in 

removal from the unemployment register. As a result of this, almost 2,400 persons were 

removed from the register in 2007. Moreover, an increased number of persons were 

removed from the unemployment register as they were found working and registering – they 

must work consecutively for 6 months to obtain the right to register for unemployment benefits 

again. 

Undeclared work is also being addressed through: 

• closer collaboration with the Police in conducting inspections especially when illegal 

employment is expected to involve foreigners; 

• turning undeclared work into regular employment following on-site inspections by 

allowing employers to regularise the employment position of the persons found working 

illegally and paying a fine; 

• sharing of information with other government entities – Department of Social Security, 

Police, VAT Department, Tax Compliance Unit; 

• employers found breaching employment legislation are not having their application for 

work permits for foreigners approved; and 

• publicity measures to promote rights and responsibilities. 

Government intends to intensify the response against undeclared work by intensifying its 

current efforts by increasing the resource capacity as well increasing collaboration between 

the various entities in order to curtail the defaulting workers. Moreover, it is also being 

proposed that legislation is amended or introduced whereby higher fines are imposed on 

these defaulters. In addition publicity and information campaigns with the aim of promoting 

the benefits of legal employment are also being planned. 


Implement changes to the tax and benefit system to make working more attractive. 

During the NRP 2005 – 2008 programming period, the Government of Malta amended current 

income tax provisions with a view to make work more attractive. The main changes to 

taxation policy is summarised below: 

• Tax credit (Women Returning to Employment) Regulations, 2005 - where female 

returnees to the labour market will benefit from a tax credit set off against the tax in 

respect of gains of profit from the said employment; 

• Part-time Work (Amendment) Regulations, 2005 - these provisions have now been 

extended to married couples. This measure complements the introduction of the 

register for part time employees introduced in early 2008; 

• the revision of income tax bands in budget 2008 - tax bands have been revised with a 

view to provide a greater incentive to those who wish to work; 

• recognition of men/women working within a family business - men/women working in 

their family business will be allowed to be registered on the company’s books and thus 

have the opportunity to enjoy social benefits while also being entitled to a pension on 

payment on their social security contribution; 

• Tax deduction for use of childcare services. Government shall allow parents to deduct 

Lm400 (€931.75) from the taxable amount to make good for part of the expenses 

incurred in licensed childcare services. In those cases were employees receive 

payment from their employer for expenses related to childcare services, such payments 

shall no longer be considered as fringe benefits and will therefore no longer be taxable. 

In those cases where employers pay their employees for expenses related to childcare 

services, such expenses are considered as business costs and therefore are deductible 

from taxable income;; 

• change in computation system of social security contributions for part-time employment. 

In order to make part-time work more attractive, Government has adjusted the social 

security contribution paid by part-time employees for whom such employment is their 

main job and has also introduced benefits on a pro rata basis. 

In addition to the measures already introduced, Government also plans to introduce further 

reforms in the taxation framework in order to stimulate economic growth and increase the 

attractiveness of work. 

A primary measure which will be introduced in the coming years is the revision of the income 

tax rates. Government plans to further widen the tax bands as a continuation of the measure 

introduced in Budget 2008. The thresholds of when tax is paid at 15% and 25% will be 

raised. As a result the number of persons who do not pay income tax will increase as will 

those who pay 15% instead of 25%. The widening of the 15% tax threshold is a measure that 

is expected to impact around 75,000 taxpayers. Moreover the maximum tax rate of income 

tax will be reduced from 35% to 25% for those earning up to €60,000. Initial projections point 

out that there are around 21,300 taxpayers who would potentially benefit from this measure. 

Another taxation measure which is aimed to contribute towards increasing productivity and 

growth is the removal of the €23 departure tax. This impacts all travellers but it is also an 

increased cost for business since all business travellers have to bear the burden of this tax. 

The number of departing business and professional persons in 2007 (NSO) amounted to 

98,800. This measure is expected to cost Government €2,272,400. 


Addressing Malta’s Points to Watch 

In December 2007, the Commission in its Annual Assessment Report has reconfirmed the 

four points to watch identified for Malta. The Points to Watch which need to be addressed in 

the Malta NRP 2008-2010 include: 

• “continue implementing and reinforcing measures on health care reform; 

• further improving the regulatory environment by continuing simplifying legislation by 

introducing systematic impact assessments and effective one-stop-shops for business 

start-ups; 

• diversifying energy sources, including enhancing energy efficiency and renewable 

energy and connecting Malta to Europe’s energy networks; and 

• continuing efforts to raise educational attainment and reduce early school leaving.” 

Implementing and reinforcing delayed measures on health care reform 

Government has opted for an incremental approach towards health sector reform that is 

based on building the appropriate strategies and systems to modernise the public health 

sector. 

Safeguarding financial sustainability has been identified as a core policy objective for health 

and long-term care systems by the EU. The challenges posed by the ageing population 

together with the availability of expensive medicines and technology coupled with the global 

scarcity of health care human resources come together to provide strong cost escalation 

levers. The issue of the long-term sustainability of the system is receiving increasing 

attention. This should be understood also in light of Government’s commitment to keep 

health care free at the point of delivery. There is a need to create awareness amongst 

service users of their responsibilities to utilise health care services responsibly. Some health 

services are not functioning efficiently because they are misused. Better financial control will 

be exerted by initiating a shift of all health care entities to a controlled decentralised accrual 

and responsibility accounting system 39 . This will be accompanied by an appropriate 

investment in the necessary human expertise and information management systems. A high 

level strategy that outlines the priorities for further developments in ICT in the coming years is 

being drawn up. In all ICT developments, emphasis will be made on maximising value. 

Recognising that quality health services contribute to the high level of healthy life expectancy 

enjoyed by the Maltese population, Government is determined to continue to facilitate access 

to services notably by providing better information on the available services as well as by 

reducing lengthy waiting time to access services. Government will publish a plan on the way 

forward for primary and community care services by the end of 2008. Actions to implement 

the agreed strategy will start in 2009 and continue between 2010 and 2015. 

The key thrusts in relation to health care include: 

• containing public health care expenditure through enhanced efficiency; 

• improving access to services; and 

• creating an environment that supports foreign investment in health services. 

39 Such a system has been in place at Mount Carmel Hospital and Zammit Clapp Hospital for a number of years with 

excellent results in terms of efficiency and cost-savings. 


Containing public health care expenditure through enhanced efficiency 

Public health expenditure will be contained by means of: 

• promoting responsible service utilisation through information campaigns, more 

utilisation of health centres; 

• setting up of operational and financial control systems to ensure better resource 

utilisation and allow management to have access to the necessary information to 

exercise appropriate financial planning and control; 

• enforcement of entitlement mechanisms; and 

• investment in ICT as an enabler for change and process re-engineering. 

Improving access to services 

The Maltese Government will improve access to services by 

• creating a framework for patients rights; 

• enhancing information on health services; 

• reducing waiting time for interventions; 

• providing better access for residents of Gozo; and 

• providing access to hospital patient data from the primary care setting. 

Creating an environment that supports foreign investment in health services 

The Maltese Government intends to: 

• promote Malta as a centre for health care education and training as part of Vision 2015; 

and 

• provide an effective yet supportive regulatory environment for the pharmaceutical sector. 

Pharmaceuticals create knowledge-based jobs using high technology employment and 

access to global markets. 

New Health Care Act 

A new Health Care Act will replace the Department of Health (Constitution) Ordinance (Cap. 

94). The Act aims at safeguarding and improving public health, promote a comprehensive, 

sustainable and better-value-for-money-spent health service anchored on the principles of 

social solidarity and equity. 

The draft Act was cleared through the Cabinet`s Social Policy Subcommittee and a revised 

draft was submitted for vetting by the office of the Attorney General. The draft is currently 

being reviewed following changes in the legislature. It is still envisaged that the Act will be 

presented to Parliament later on next year. Despite this delay, an administrative decision had 

been taken to implement the top management structures envisaged in the Act, namely the 

separation of the regulatory function from the service provision function. As from September 

2007, 4 Directorates General have been set up namely: 

• Public Health Regulation Division i.e. the Regulator; 

• Health Care Services Division i.e. the Service Provider; 

• Strategy and Sustainability Division tasked with ensuring that financial sustainability is 

achieved through establishment of policies and strategies ; and 

• Resources and Support Division responsible for the financial element and HR functions. 


Improving Health Care Services in Gozo 

The Maltese Government is in the process of procuring medical equipment for the Gozo 

General Hospital that will replace old environmentally damaging technologies with more 

energy efficient ones, as well as new equipment that will significantly reduce the need for the 

transportation of patients from the Gozo General Hospital to Mater Dei Hospital for diagnostic 

services which are not currently available in Gozo. This project will notably entail the 

upgrading of the operating theatre and the setting up of a radiology unit. 

Further improving the regulatory environment by continuing simplifying legislation by 

introducing systematic impact assessments and effective one stop shops for business 

start-ups 

Government’s policy in relation to the drafting of subsidiary legislation states that each draft 

legislation has to be accompanied by a basic Impact Assessment referred to as a Legal 

Notice Checklist. The Legal Notice Checklist provides the financial and administrative 

impacts of regulatory measures on the private sector. 

The Legal Notice Checklist covers general aspects, how the drafting exercise was carried out, 

its findings, and anticipated outcomes. It gathers information on whether stakeholders were 

consulted, the list of stakeholders that were consulted and their feedback. Consultation is a 

common practice for Ministries, government departments and public sector entities, who work 

in close collaboration with stakeholders when drafting legislation and policies. The checklist 

asks whether an impact assessment was carried out and requests the Ministries to list its 

main findings. 

The Legal Notice Checklist takes into consideration the procedural or administrative impacts 

on SMEs resulting from the draft legislation. Ministries have also to specify whether there will 

be any envisaged new or increased burdens. 

Although not a requisite, it is the norm for impact assessments to be carried out in the case of 

high impact proposed legislation; legislation or initiatives which are deemed to have a 

strategic impact on the general public’s quality of life, economical growth and jobs are 

supported by in-depth studies. Examples include the Social Impact Assessment of Pensions 

reforms, and the Socio-Economic Impact Assessment of Smart City at Malta, both of which 

are publicly available. 

It is worth noting that the Better Regulation Unit was engaged in a Twinning Light project 

where a procedure manual on simplification and better policy-making has been produced. 

Effective one stop shops for business start-ups 

Government is committed to create a business-friendly environment and to remove 

unnecessary bureaucracy and burdens to business. The MFSA acts as the official one-stopshop 

for setting up limited liability companies. Through the MFSA, individuals are able to set 

up limited liability companies in as little as one working day as long as the necessary 

documentation is available. Furthermore, the registering of a limited liability company may 

also be done online by obtaining an e-signature. A company may set up business within 24 

hours if all documentation is available. 

The Maltese Government has also set up the GSU with the remit of formalising the 

commitment of the various Government entities within tight and formally established time 

bound parameters such that the bureaucratic needs of individuals or entities seeking to set up 

and operate a business from Smart City can be addressed through a single point of reference 

and within the formally established time parameters. The work of the GSU is complemented 

by that of the Malta Enterprise who through a variety of schemes provides support and 

impetus to FDI firms seeking to set up and operate from within the Maltese Islands. 

In the light of the fact that the majority of businesses in Malta are micro enterprises, the 

Government of Malta has decided that these businesses should also avail themselves from 

the services provided by the one-stop-shop. 


Within this context the existing Business Care Unit of the Commerce Division within MFEI will 

expand its remit with a view to act as the single contact point to businesses to assist them in 

the setting up of their enterprise. In the mean time, businesses may obtain a trading licence 

within ten days. 

Diversifying energy sources, including enhancing energy efficiency and renewable 

energy and connecting Malta to Europe’s energy networks 

Malta’s total dependency on fossil fuels for energy needs is having considerable impact both 

from an environmental and economic perspective. From an environmental perspective, the 

production of energy from fossil fuels is causing environmental pressure due to the 

combustion processes involved. In fact, 63% of Malta’s greenhouse gas emissions emanates 

from this sector. In addition, the volatility in oil prices is causing pressures on the Maltese 

socio-economic development efforts: 

• from rising costs of imports ; and 

• costs of productions locally. 

Within this context energy efficiency and diversifying Malta’s energy sources including 

renewable energy sources play a crucial role. 

Diversifying energy resources and ensuring security of supply 

The Maltese Government is committed towards increasing its share of renewable energy. In 

fact, Malta intends to generate 10% of the national energy needs through renewable energy 

sources by 2020. The potential sources for renewable energy for Malta are solar, wind and 

waste. In achieving the 10% target, Government has earmarked €33 million from the 2007 – 

2013 structural funds. 

Government has published “A Draft Renewable Energy Policy for Malta 2006”. Furthermore, 

a study on the best way to link Malta to the European Grid is underway and is being carried 

out by Lahmeyer International. The options for future expansion of on-island generation 

capacity together with natural gas via pipeline interconnection or liquefied natural gas as 

alternatives to the existing fuel oil/ gas oil mix are also under review. 

Following the widespread success achieved with the rebate schemes on energy saving 

domestic appliances, the Government intends to extend such scheme to renewable energy 

sources equipment by increasing financial subsidies for solar water heaters, photovoltaic and 

micro-wind generators. In 2006 market response to solar thermal installations in Malta saw a 

significant improvement, as requests for financial subsidies increased by 434% when 

compared to the 360 subsidies awarded in 2005. Through these aid schemes the 

government intends to double such figure to 3000 units SWH sold per household in 2009, (in 

addition to the 220 PVs and micro-wind generators to be sold) thus providing a substantial 

contribution towards the 2020’s targets. 

Energy Efficiency 

Energy efficiency can have a significant impact on the demand for energy and so, it can 

reduce the country’s fuel bill and the release of carbon into the environment. According to the 

latest available statistics, between 2000 and 2004, the Maltese economy has improved its 

energy efficiency by 6% 40 . Energy efficiency in households and transport has improved by 

9% and 5% respectively whereas energy efficiency in the manufacturing has deteriorated. 

These results are encouraging. However, further action is required to implement Malta’s 

national policy towards more effective energy efficiency. 

40 Pre-Budget Document 2009 – Together for a Sustainable Future. Available online from: www.mfei.gov.mt . 

[Accessed on 11 August 2008] 


The Maltese Government Policy towards energy efficiency is a multi-faceted one. In fact in its 

Pre Budget Document 2009, Government announced that a series of actions will be taken 

with a view to contribute towards one or more of the following objectives: 

• motivate the public sector to become a role model in energy efficiency; 

• promote increased awareness and behavioural change by consumers on an individual 

level through communications campaigns; 

• adopt financing instruments and economic incentives targeting all sectors to stimulate 

further the take up of more efficient technologies and processes; 

• take advantage of international efforts, in particular at EU level, to ensure that more 

efficient energy using products become available to the consumer; 

• use legislation, such as the energy performance in buildings, to set standards for 

energy performance in buildings. These Regulations will be enforced by 1st January 

2009 in accordance with the provisions of the Directive; and 

• conduct research in energy efficient technologies and practices suitable for adoption in 

Malta. 

Over the past three years, Government has introduced an Energy Saving Government 

Rebate scheme with a view to promote energy saving appliances. Within this context, over 

27,000 persons 41 benefited from this scheme. 

Energy Efficiency in Products 

The majority of consumers in Malta are aware of the importance of choosing Class ‘A’ energy 

efficient appliances. This result has been achieved through the Government scheme which 

was available over the past years which promoted energy efficiency in appliances. 

The Maltese Government acknowledges that there is a general lack of information and 

awareness about energy efficiency. Within this context, an information campaign focusing on 

specific energy consumption sectors will be re-launched during 2009. In addition, 

Government will launch schemes to promote energy efficiency in the non-domestic sector will 

also be launched. 

Energy Efficiency in Buildings 

In order to further promote energy efficiency in building, the Maltese Government will revise 

the existing legal framework with a view to ensure energy efficient techniques in new 

buildings, renovated buildings and public buildings. 

Within this context, Government has proposed a renewable energy project for the Gozo 

General Hospital. This project includes a solar thermal system, Photovoltaic and the 

replacement of the existing fossil fuel driven boiler by a gas fired one. This is expected to 

reduce the current carbon dioxide emission levels from the boiler by approximately 450 

tonnes. Moreover, the project will also eliminate 1 tonne of SO 2 emitted annually. The solar 

panels proposed under this project will contribute to the energy savings target indicated in the 

National Energy Efficiency Action Plan 2007 by reducing the hospital’s traditional energy 

consumption by 300MWh per annum. 

Connecting Malta to Europe’s energy networks 

A study on the best way to link Malta to the European Grid is underway and being carried out 

by Lahmeyer International. The options for future expansion of on-island generation capacity 

together with natural gas via pipeline interconnection or liquefied natural gas as alternatives to 

the existing fuel oil/ gas oil mix are also under review. The possible synergy of this project 

with the production of ‘green energy’ from wind farms is also within the purview of this study. 

41 Data provided by the Ministry for Resources and Rural Affairs 


Raising educational attainment and reducing early school leavers 

Government is committed towards increasing attainment rates and decreasing the rate of 

early school leavers in the coming years. The Budget Speech 2007 and the Pre-Budget 

Document 2008 reinforce this objective and outline short and long-term measures which will 

contribute towards reaching this goal. 

The Maltese Government is currently undertaking an in depth review of transition from 

primary school education to post secondary education and the alternative transition to work. 

This study compliments the review of student transitions from primary to secondary education 

and gives an overarching view of the link and impact of education policy at a primary and 

secondary level on student choices and transitions into further education. 

Student population trends in post-secondary and tertiary education 

Since 1999, the total student population in further and higher education in Malta registered an 

increase of 61% in the last eight years as indicated in Figure 1 hereunder. 

The average age in the further education sector is typically 16-17 years for the general post 

secondary sector, and 16-19 years for the vocational post secondary sector. It is worth noting 

that the compulsory education in Malta is till the age of 16. At a tertiary level, the typical age 

bracket for courses ranging between 3-4 years is that of 18-22. 

Figure 1 - Total Day and Evening Student Population in Further and Higher Education in Malta 

(1994-2007) 

25,000 

20,000 

Student population 

15,000 

10,000 

5,000 

- 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 

Post secondary (General) 3,723 3,872 3,250 4,438 5,185 5,033 5,191 5,122 4,970 5,169 5,394 5,732 6,117 6,119 

Post secondary (Vocational) 1,748 1,362 1,423 1,621 1,841 1,917 2,615 2,801 3,638 3,858 4,476 6,964 6,730 6,774 

Tertiary (Day & Evening) 5,177 5,805 6,263 6,368 7,146 6,959 6,362 7,493 7,332 9,006 9,245 9,530 9,450 9,500 

Total Further and Higher education 10,648 11,039 10,936 12,427 14,172 13,909 14,168 15,416 15,940 18,033 19,115 22,226 22,297 22,393 

Years 

Source: 

NSO Education Statistics (1994 – 2005) 

Provisional Institutional Data compiled by NCHE (2006 – 2007) 


The number of students outlined in the diagram above for 2004-2007 are further broken down 

by institution in Table 3 below, to demonstrate that all further and higher education institutions 

with the exception of private sixth forms have increased their total number of students every 

year. 

Table 3 - Total Day and Evening Student Population in Further and Higher Education 

Institutions in Malta (2004-2007) 

Institution 2004 2005 2006 2007 

Institute for Tourism Studies ( ITS) 710 771 598 615 

Junior College 2958 3057 3225 3269 

MCAST 3766 6193 6132 6159 

Post Secondary (Government) - G. Curmi and M. Refalo 

School 

1646 1908 2140 2156 

Post Secondary (Private) 790 767 752 694 

University of Malta 9245 9530 9450 9500 

Grand Total 19115 22226 22297 22393 

Source: 

NSO Education Statistics (2004 – 2005) 

Provisional Institutional Data compiled by NCHE (2006 – 2007) 

ITS Data excludes evening part-time students (159 in 2007, 145 in 2008) 

Structural indicators show that in 2006 the educational attainment level in Malta was 50.8% 

for the 20-24 age bracket. In 2007 42 the same indicators show that Malta has now increased 

its educational attainment rate to 54.7%. This also implies a corresponding drop in early 

school leavers from 41.7% in 2006 to 37.6% in 2007. 

Government’s policy is to undertake the necessary educational reforms with a view to retain 

85% of school leavers aged 16-18 in post-secondary level education by 2015. Measures to 

increase attainment rates and reduce early school leavers are being undertaken in various 

sectors and across different levels of the education system simultaneously. Measures related 

to post-secondary and tertiary level student participation rates include: 

• the continuation of student support schemes such as the Student Maintenance Grants 

and the Malta Government Scholarships Schemes (MGSS) for the undergraduates and 

postgraduates following programmes in private/non-state institutions, both in Malta or 

abroad, EU programmes to promote mobility, and financial support to parents of 

children attending private schools; and 

• further investment in the capacity of post-secondary vocational institutions such as 

MCAST and ITS which shall witness the largest share of marginal growth in school 

leavers who opt to continue their studies beyond compulsory levels of education. The 

target of reducing early school leavers from 30% in 2007 to 34% by 2010 holds. 

The Maltese Government aims to continue making longer-term restructuring to achieve its 

85% participation rate targets by 2015. In achieving this target Malta will also make use of 

Structural Funds with a view to reduce the rate of early school leavers and hence raise 

educational attainment levels. Actions undertaken include a new MCAST campus, 

investment in human capital including scholarships and targeted programmes, guidance 

services, internal and external quality assurance expertise, administration and governance, 

and subject related education and professional development including ICT, entrepreneurship, 

science and technology amongst others 

Other complimentary long-term measures related to primary and secondary education which 

have a strong influence on long-term student school leaving choices are also being 

undertaken. The strategy for compulsory education includes a number of measures which on 

the one hand assess and improve the quality of education services by revising existing 

policies and practices and introducing new concepts and frameworks. The strategic thrust in 

schools shall consist of a portfolio of measures including: 

42 “Progress towards the Lisbon Objectives in Education and Training - Indicators and Benchmarks 2008”, 

COMMISSION STAFF WORKING DOCUMENT, EU Commission, 2008. 


• a number of policy reviews which include a review of the National Minimum Curriculum, 

a strategy to ensure core competency outcomes at a primary level, and a review of 

selectivity and transitions are all currently underway; 

• measures related to the education system and programmes including the continued 

implementation and strengthening of the college system, a review of the examination 

system at the end of the primary education, promotion of Mathematics, Science and 

Technology subjects in schools for increased take up, refurbishment of Science 

Laboratories and the provision of an ‘after school’ programme of sports, literacy, art, 

drama, dance and creativity for children in schools; and 

• the continuation of the refurbishment and building programme for State-run schools; 

and 

• scholarships for training teachers and educators in an array of specialised areas are 

being offered. 

In addition to the actions pursued above, the Maltese Government is also proposing a series 

of actions aimed specifically at addressing the regional aspect of the island of Gozo. The 

Government is committed to continue to invest in its human resources by offering a number of 

vocational education courses aimed at early school leavers in the areas of language training 

and hospitality in Gozo. It will also be providing lifelong learning opportunities for Gozitans by 

offering higher education courses at the University of Malta Gozo Centre. These courses will 

be offered in the areas of IT, Finance and Tourism. Participants to these courses will either 

achieve a Diploma or a Degree in any one of these areas. The choice of areas in which 

training will be offered has been dictated by labour market trends as well as by developments 

in these sectors. 

The Maltese Government is committed towards addressing its Country Specific 

Recommendations and Points to Watch notwithstanding certain specific challenges that 

impact these concerns. It is important to consider the socio-cultural context in which these 

recommendations are being implemented and hence a long term implementation approach is 

required to address these challenges. 


Part C - Malta’s National Reform Programme 2008 -2010

Macroeconomic Policies 

Recent Economic Developments 

The Maltese economy sustained upbeat economic growth during 2007 for the third year in a 

row. In fact, during 2007, GDP grew by 6.3% in nominal terms and by 3.7% in real terms. 

Moreover, GDP growth remained relatively strong during the first two quarters of 2008 

reaching 3.3%, only marginally below the 3.5% growth rate registered during the same period 

in the previous year. Economic growth during 2007 as well as during the first two quarters of 

2008 was mainly sustained by domestic demand. 

The recent international economic developments pose downside risks to the outlook for the 

Maltese economy. In particular, the financial turmoil and the slowdown in major economies 

around the world pose a significant challenge. Furthermore, the relatively high international 

prices of oil and food commodities also pose additional risks. Table 04 shows the 

development of the main economic indicators over recent years. 

The level of Malta’s GDP per capita in purchasing power standards has remained fairly stable 

around the 77.5% mark during the past four years thus continuing to be appreciably below the 

EU27 average. This highlights that real convergence of living standards in Malta with the 

EU27 average remains an important issue for the national economic policy agenda. 


Table 4 - Main Economic Indicators 

Main Economic Indicators 

Nominal GDP (€ 

millions) 

Real GDP (€ 

millions) 

Real GDP growth 

(%) 

2003 2004 2005 2006 2007 2007 2008 

4388.3 4508.8 4799.8 5095.4 5415.0 Jan-Jun 2588.6 2745.8 

3999.3 4044.3 4185.4 4317.1 4477.0 Jan-Jun 2142.4 2213.0 

-0.3 1.1 3.5 3.1 3.7 Jan-Jun 3.5 3.3 

GDP per capita in 

PPS (compared to 

EU27 100 

benchmark) 

78.6 77.4 77.9 77.2 77.3 

Expenditure Components of GDP at constant 2000 prices (% change) 

Private final 

consumption 

3.9 2.5 1.8 0.7 1.6 Jan-Jun 2.9 4.1 

expenditure *1 

General government 

final consumption 3.3 0.5 -0.5 5.9 -0.1 Jan-Jun -0.9 12.3 

expenditure 

Gross fixed capital 

formation 

23.1 -2.8 8.6 4.2 4.1 Jan-Jun -3.0 -6.3 

Exports of goods 

and services 

-0.6 -0.9 1.2 17.1 -4.1 Jan-Jun -3.3 -10.2 

Imports of goods 

and services 

5.9 0.8 3.6 14.7 -3.8 Jan-Jun -7.4 -4.7 

Current Account 

Balance (% of GDP) 

-3.1 -5.8 -8.7 -8.2 -5.5 Jan-Mar -3.0 -2.5 

HICP Inflation (%) 1.9 2.7 2.5 2.6 0.7 August 0.5 3.7 

Unemployment (%) 

*2 

7.6 7.2 7.2 7.3 6.5 Jan-Mar 7.3 6.0 

Employment (%) 54.2 54.0 53.9 54.8 55.7 Jan-Mar 53.9 54.7 

Unit Labour Cost 

growth 

5.0 0.5 -0.2 1.4 0.7 Jan-Jun 2.9 -0.1 

General 

Government Deficit 

(% of GDP) 

General 

Government Debt 

(% of GDP) 

Sources: National Statistics Office, Eurostat 

*1 Includes NPISH final consumption expenditure 

*2 Based on LFS data 

9.8 4.6 2.9 2.5 1.8 

69.3 72.1 69.9 63.8 62.2 

The external sector plays an important role in the context of the small and open economy of 

the Maltese islands and in fact, Malta has recently been subject to a number of negative 

supply side shocks. Particularly, a number of important challenges have materialised in the 

form of major fluctuations in oil and food prices, as well as volatility in market conditions of a 

major export category. Moreover, local industries are increasingly facing increased 

competitive pressures from around the world. 

During 2007, the current account deficit contracted to 5.5% of GDP, an improvement of 2.7 

percentage points when compared to the previous year. Moreover, the current account 

situation continued to improve over the course of this year. In fact, during the first quarter of 

2008, the current account deficit as a percent of GDP reached 2.5%, marking an 

improvement of 0.5 percentage points when compared to the same quarter in the previous 

year. 


The improvement in the current account during the first quarter of 2008 is mainly attributable 

to the current transfers received as well as lower profits of foreign-owned companies 

repatriated abroad which compensated for the deterioration in the trade and services 

balances. In fact, the goods account was negatively affected by a fall in merchandise receipts 

as well as an increase in expenditure on merchandise imports. Increased receipts from 

tourists travelling to Malta contributed positively to the services account, however, such an 

effect was more than offset by increased expenditure of Maltese travellers going abroad. 

HICP inflation reached a low of 0.7% during 2007 marking a substantial decline from a level 

of 2.6% registered during the previous year. The rate of HICP inflation has, however, started 

to increase, partly reflecting the effect of international price pressures. In fact, the HICP 

inflation rate during the month of August in 2008 stood at 3.7%. 

The positive economic growth registered in recent years was reflected in a tightening of 

labour market conditions. The employment rate increased by 0.9 percentage points from 

54.8% in 2006 to 55.7 per cent during 2007. The employment rate stood at 54.7% in the first 

quarter of 2008. There has been an increase in full time employment, while part-time 

employment has also continued to increase. While the employment rate has improved it 

remains significantly below the EU27 average which stood at 65.4% in 2007 and 65.5% for 

the first quarter of 2008. The unemployment rate declined by 0.8 percentage points reaching 

6.5% in 2007. The rate of unemployment in Malta continued to decrease in the second 

quarter of 2008 reaching 6.0% thus continuing to remain below the EU27 average. 

With respect to international competitiveness, growth in nominal unit labour costs has been 

relatively contained since 2003, reaching levels close to zero during 2004 and 2005 before 

somewhat increasing again in 2006. The growth in nominal unit labour cost has, however, 

decreased again in 2007 and data for the first two quarters of 2008 shows a negative growth 

rate of 0.1%. Since 2003, the real unit labour cost growth rate for both Malta and the EU27 

was negative, with a relatively stronger average annual decline for Malta (-2.0%) compared to 

the EU27 (-0.9%)Such trends contribute positively towards the competitiveness of the 

domestic economy. 

The budgetary consolidation that commenced in 2004 has continued in 2007 with the general 

Government deficit declining further to 1.8% of GDP. The general Government debt-to-GDP 

ratio has also followed a downward trend, decreasing by 1.6 percentage points from 63.8% in 

2006 to 62.2 per cent in 2007. 

Macroeconomic Policy 

Issues and Opportunities 

Ensuring a stable and sound macroeconomic framework, which is conducive to price stability, 

is a necessary precondition to achieve sustainable economic growth and employment 

creation. In the run up to the adoption of the Euro, Malta’s macroeconomic environment has 

been strengthened. In particular, inflation has been relatively low whilst significant progress 

has been made in the consolidation of public finances. Participation in the Euro Area is 

conducive to further strengthen the macroeconomic framework. In particular, adoption of the 

euro has removed the exchange rate risk associated with the Maltese lira. Furthermore, it is 

widely acknowledged that the framework governing the euro makes it a stable currency with 

low inflation and low interest rates, and encourages sound public finances. Moreover, the 

adoption of a single currency increases price transparency, eliminates currency exchange 

costs, facilitates international trade and improves the integration of financial markets. 

The current international economic scenario presents downside risks to the growth outlook for 

the Maltese economy. These primarily relate to the financial turmoil, the slowing down of 

world economic growth, particularly in Malta’s main trading partners, inflationary pressures 

stemming from the relatively high international oil and commodity prices, as well as the 

appreciation of the Euro against the US dollar and the Pound sterling. 


These developments are expected to result in a fall in aggregate demand, both as a result of 

lower demand for exports as well as a slowdown in private consumption growth due to higher 

domestic inflation. 

Government’s main macroeconomic policy objectives are to achieve sustainable economic 

growth and ensure real convergence with EU average income levels; and to generate a high 

level of employment and secure a relatively low unemployment rate. Malta’s per capita GDP 

stood at around 77 per cent of the EU27 average in 2007. Convergence to the average EU 

per capita income within a reasonable timeframe requires that Malta’s economic growth rate 

increases above the recent levels and remain at such elevated growth rates for a sustained 

period of time. It is estimated that an average annual real growth rate of approximately 4.2% 

is required in order to reach the EU average per capita income by 2020. This level of growth 

appears to be in excess of most conventional estimates of Malta’s potential growth 

suggesting the need to address supply-side issues in order to achieve real convergence with 

EU average income levels within a reasonable time frame. This implies consistent increases 

in the employed population as well as enhanced labour productivity over a prolonged period 

of time. Thus Government will continue to implement supply-side policies earmarked to 

improve participation in the labour force, improve the functioning of the market, encourage 

investment, including foreign direct investment, and support the transformation of the 

economy to high value added activities. 

Demographic developments, specifically the ageing of the Maltese population, are expected 

to have a notable impact on the labour supply in the coming years and consequently also on 

the rate of potential economic growth. In this context, Government will be considering the role 

of policies earmarked to increase participation in the labour market as well as measures 

aimed to improve the fertility rate and migration policies. Government is particularly focusing 

on measures targeting female and older workers, whilst also implementing measures aimed 

to improve the incentive to work. Imported labour can provide an important contribution to 

meet the growing demand in certain sectors and to ensure that any labour shortages do not 

lead to undue wage pressures. Experiences in other countries in the EU show that migration 

can provide a significant means to support the growth process, particularly in the context of 

constraints on the growth of the labour supply due to demographic developments. 

Globalisation and the inherent increasing international competition, especially from low-cost 

countries, which it brings about is posing significant challenges to specific sectors of the 

Maltese economy, particularly in traditional manufacturing activities. The tourism industry 

also faces intense international competitive pressures from competing destinations, not only 

in the Mediterranean region but also from cheaper long-haul tourist locations. In this context, 

Government attaches high priority to policies which aim to enhance competitiveness so as to 

ensure sustainable economic growth. Furthermore, Government will continue to promote the 

development of high value added growth sectors, so as to ensure that wages can improve 

and converge to average EU levels. Such diversification of the economy would also reduce 

the country’s vulnerability to external shocks and reduce the volatility of the growth path. 

As a Euro Area Member State, Malta can no longer make independent use of monetary or 

exchange rate policies. Economic theory suggests that in such a scenario, negative external 

shocks need to be absorbed by an increase in productivity and / or a decrease in prices and 

wages, or the migration of labour across industries (if shock is sector specific) or across 

countries (if shock is country specific). In the absence of such flexibility in the labour and 

product market, a persistent rise in the unemployment level is the likely outcome. Flexibility in 

the economy is thus crucial to facilitate national adjustment capacity when faced with 

economic shocks. Such flexibility is important in order to respond to changes in cyclical 

economic conditions, as well as longer term trends, including globalisation and technological 

changes. Thus, Government will continue to implement structural reforms aimed to instil 

further flexibility in the labour and product markets. 


Vision and Objectives 

Stable macro economic framework 

Government’s economic policy is based on growth and stability oriented macroeconomic 

policies. Sound macroeconomic policies are essential to create an environment which is 

conducive to employment creation and growth. Thus continuing to implement a prudent fiscal 

policy so as to secure a sustainable budgetary position remains a key priority in 

Government’s economic policy agenda. Reaching the medium term objective (MTO), of a 

balanced budget in structural terms (i.e. cyclically-adjusted balance net of one-off and other 

temporary measures) by 2010, in line with the Stability Programme 2007-2010 of December 

2007, would be an important step to ensure fiscal sustainability. 

Government will also continue to aim to maintain a low and stable level of inflation is another 

key aspect of a stable macroeconomic framework. This is especially important to ensure the 

competitiveness of local enterprises in view of the high degree of openness of the domestic 

economy. It is also a precondition to attract foreign direct investment. 

It is recognised that the relatively high international prices of oil as well as other commodity 

prices, particularly agricultural items, have a bearing on the domestic inflation rate. Since 

Malta is wholly dependent on oil for energy generation and in view also of the use of oil for 

water desalination purposes, the impact of the increase in oil has hit significantly the Maltese 

economy. On the other hand, the appreciation of the Euro against the US dollar has partly 

mitigated the impact of high international oil prices. At the same time, the increase in food 

prices is also affecting the local economy, directly through its impact on consumers as well as 

an input to industry. 

Government of Malta’s economic policy is based on the principle that wherever possible 

domestic market developments should reflect the imperatives of supply and demand. This 

has been applied also in the case of energy prices, where Government has established 

mechanisms that align closer domestic fuel and energy prices to the developments in the 

international market. As the relatively high oil prices involve a structural change in the 

international energy market, and not a temporary increase as originally envisaged, 

Government is proposing to remove the current fuel surcharge on water and electricity whilst 

revising the current tariffs, whilst also taking into account social and economic considerations. 

Competition policy 

An effective competition policy is a key priority for Malta, where the small size of the economy 

tends to result in market imperfections. Government is committed to remain vigilant on 

inflationary developments. Thus, the monitoring of market functioning by competition 

authorities is being intensified so as to ensure that any domestic price increases are not out of 

line with international price developments. Competition policy is thus a main instrument for 

ensuring price stability. 

By encouraging the liberalisation of a number of markets, improving the functioning of the 

market and reducing remaining rigidities, an effective competition policy would contribute to 

lower the costs of production and improve Malta’s external competitiveness. Moreover, 

enhancing competition in the domestic economy is a prerequisite for a more efficient 

allocation of resources, enhanced investment and productive capacity, as well as improved 

market flexibility necessary to withstand negative external shocks in the economy. 

Government is considering liberalising entry in the transport sector. Furthermore, 

Government will be reviewing the subsidies in place to ensure that these do not lead to undue 

distortion of competitive pressures, thus resulting in suboptimal allocation of resources, whilst 

taking into account social considerations. Government is also committed to continue with its 

policy of reducing its direct involvement in economic activity. 


Wage developments 

At this juncture, it is also important to ensure that the temporary increase in the inflation rate 

does not lead to an unsustainable trend in wage growth in excess of productivity gains. Thus, 

Government will ensure that any wage increases to compensate for the increases in inflation 

registered in recent months do not endanger Malta’s competitive position. Government will 

contribute to ensure that the social partners work together so that wage increases do not 

exceed gains in productivity. 

Relatively high inflation rates have been registered in recent months. In such a scenario, 

wage indexation mechanisms can contribute to greater inflation persistence and thus create 

greater risks of second round effects from inflationary shocks. Thus, at this juncture, 

Government is monitoring closely the impact of the COLA mechanism on wage developments, 

to ensure that it does not lead to competitive losses. This is particularly important given that 

Malta’s inflation rate has been exceeding the average for the Euro Area and also in view of 

the fact that other Member States in the single currency area may not have in place similar 

wage indexation mechanisms. 

Although wage moderation is essential in order to safeguard competitiveness particularly in a 

small open economy which operates in a highly competitive environment, the catching up 

process to reach EU levels of development requires wage increases in excess of those 

observed in the EU. Thus, Government recognises that the capacity of the economy to 

increase productivity, in excess of wage growth is a necessary condition for sustainable 

growth. Thus, besides contributing to wage moderation, Governent will continue to implement 

productivity enhancing reforms so as to ensure favourable developments in unit labour costs, 

whilst achieving convergence with EU average income levels. Furthermore, in order to 

safeguard competitiveness, Government will monitor the trend in domestic unit labour costs in 

the context of developments in competitor countries. Government also recognises the 

importance that wage developments reflect local labour conditions and take into account 

differences across skills. 

Diversification of the economy 

Promoting competitiveness is essential in order to withstand adverse developments due to 

globalisation and in particular the intense competition from low cost countries and to contain 

external imbalances. In order to address the challenges presented by globalisation, 

Government will continue to promote further development of high value added sectors. It is in 

this manner that Malta can compete in international markets and achieve a rise in its average 

income level. Government’s strategy is to have a well-diversified, competitive and productive 

economy. In this context, as outlined in Government’s Vision 2015, Government’s goal is to 

make Malta a centre of excellence in information, communication technologies, financial 

services, tourism service, high value-added industry and services, international educational 

services and health services. 

In particular, Government attaches a high degree of potential for knowledge-based activities 

across a wide variety of sectors, ranging from ICT and pharmaceuticals to financial services. 

With regards to ICT, SmartCity is an example of the Government’s belief in the importance of 

this sector. Moreover, Government’s plan to extend the ‘smart’ concept to the whole of the 

country making it SmartMalta will surely attract even greater investment from ICT businesses. 

The Maltese government is also working to strengthen Malta’s position as an important 

financial services centre in the Euro-Mediterranean region. Government is also promoting the 

development of high-value-added activities which offer higher pay for greater skills, in sectors 

that include pharmaceuticals, biotechnology and sophisticated technology. Sustaining the 

tourism industry is another key priority, in particular, given the multiplier effects of this industry 

on other sectors of the Maltese economy. 


The generally widespread trend in Europe of services overtaking manufacturing as a share 

value added generated also appears to be taking place in Malta. Nevertheless, Government 

considers that the contribution of the manufacturing industry remains important. Government 

will continue to promote the diversification and restructuring process which is also taking 

place in the manufacturing industry. New sectors like pharmaceuticals are overtaking 

traditional sectors like textiles which are relocating to low cost centres. A constant stream of 

well qualified and skilled labour is required in order to make the leap to high value added 

manufacturing. Government will thus continue to invest in education and training and to 

promote investment, research and innovation, which are also necessary for this sector to 

remain competitive and increase value added. It is also Government’s priority that new growth 

industries in manufacturing are targeted with schemes which encourage manufacturing 

industries to undertake the necessary investment and upgrade their production capabilities 

and minimize costs. 

Human Resource Development 

Human resource development is crucial to ensure that the local labour force has the 

necessary skills levels to meet the demands of these growth sectors. Education and training 

policies are a key aspect of Government’s policy agenda will help to ensure that emerging 

economic activities do not face labour shortages. Apart from the constraints imposed on 

potential output in the economy, labour shortages can lead to wage pressures in excess of 

productivity gains which can undermine competitiveness. Government will thus continue to 

invest in education and training so as to ensure a flexible labour force which is capable of 

adapting to the changing realised of a globalised world economy. This will contribute to 

enhance labour productivity which in a country like Malta appears to be the main source of 

labour adjustment to negative external shocks. 

An improvement in the labour force participation is another key priority in Government’s policy 

agenda. This is especially important in the context of an ageing population, in order to avoid 

negative effects on potential output growth. Although the level of GDP per capita is around 

77% of the EU average, output produced per worker is around 89 per cent of the EU average. 

Moreover, although the Maltese workforce is more productive than that of competitor 

economies such as Slovenia (86.2% of EU average), Cyprus (85.8% of EU average) and the 

Czech Republic (85.8% of EU average), Malta’s GDP per capita lags behind that registered 

by these economies. This indicates that the value added generated by the Maltese economy 

is being distributed among a higher proportion of the population which is inactive. Moreover, 

Malta has yet to reach the EU average. Thus Government will continue to implement 

measures which aim to increase labour force participation as this is a necessary condition for 

economic convergence with the EU. Specific focus will be made on measures which 

encourage higher employment rates of females and older workers, where Malta lags 

significantly behind the EU average. 

Development of infrastructure 

The country’s infrastructure should support and facilitate the transformation of the economy. 

Malta’s geographical characteristics – being a small island state at the periphery of the 

European mainland – highlight the importance of having effective and efficient connections. 

This includes sea and air links, telecommunications, ports as well as roads. Energy links is 

another key aspect which has gained in importance given the recent developments in 

international oil markets. Government intends to continue to invest to strengthen and improve 

the infrastructure, including through the use of EU funds. 

Encouraging investment 

Government will continue to encourage investment in the new growth areas of the economy. 

Export oriented investment will be encouraged, since for a small and open economy like 

Malta, sustainable economic growth requires that it is export-led. Thus Government will 

continue to undertake efforts to attract further foreign direct investment in emerging sectors, 

whilst also supporting domestic production towards exports. 


More competitive domestically produced goods to compete with imports for the supply of the 

local market would also contribute to an improvement in trade balance. Government will take 

measures to improve the business environment so as to ensure that it is conducive for private 

enterprise to grow. Moreover, Government’s goal of improving market structures and 

increase competition domestically will encourage domestic firms (which up to this point may 

have been shielded from competition and thus discouraged to upgrade their production 

techniques) to invest more in order to remain competitive. 

Government will ensure that there are the right incentives in place to channel investment 

away from speculative investment in property towards more productive investment in the real 

sector of the economy. Furthermore, Government will monitor the issue of the availability of 

appropriate commercial property and the cost of land in Malta relative to competitor countries 

as this constitutes an issue which can severely hamper investment, including FDI. The 

domestic property market is characterised by market rigidities. When periods of excess 

demand and supply tend to persist, there is a higher risk that asset price bubbles are created. 

Government will consider measures, such as prudential standards, market supervision and a 

good regulatory framework, which would not only help this market work more efficiently, but 

are also important in view of the sensitivity of the domestic financial sector to the conditions of 

the real estate sector. 

Flexibility of the economy 

As a Euro Area Member State, it is important to have the capacity to ensure smooth 

adjustment to asymmetric shocks which may hit the Maltese economy. Government will thus 

continue to implement structural reforms which aim to improve the functioning of the labour 

market and of product markets, and in particular to enhance wage and price flexibility. Such 

structural reforms would also improve competitiveness and ensure the full realisation of 

growth potential. Government will also continue to implement labour market policies which 

address the ability of the labour force to increase productivity in the presence of exogenous 

shocks , as this is also an important element of labour market flexibility in Malta. Government 

initiatives in the education sector constitute a crucial element of the labour market policies in 

Malta. 

The small size of the domestic market tends to limit the scope for competition in a number of 

markets. In the presence of imperfect market structures, Government will be adopting more 

aggressive regulation and supervision of market players. In this context, Government 

attaches high priority to strengthening competition policy and competition authorities. 

Government will also consider further liberalisation of economic sectors which can contribute 

to enhance the degree of competition in domestic markets. Liberalisation is more likely to be 

effective in resulting in more competitive prices, with positive effects on costs of production 

and competitiveness, when market imperfections are limited. Liberalisation will thus be 

coupled with effective market regulation and monitoring when there are imperfect market 

structures and high market concentration ratios. Government will assess the role of external 

competition, and specifically trade policy with a view to improve the degree of competition in 

product and service markets. In particular, Government considers that international trade 

policy might present an opportunity to improve market access in certain service activities. 

A flexible labour market is another important requirement to ensure successful participation in 

the Economic and Monetary Union. Flexibility in the labour market involves the 

responsiveness of wages to changes in inflation as well as wages which adequately reflect 

sectoral and skills conditions. When faced with industry specific shocks, the labour market 

should ensure rapid adjustment of relative wages and improved labour mobility, to allow the 

necessary reallocation of labour resources across sectors and occupations. Other 

adjustments in the labour market, particularly productivity changes, will also be beneficial. In 

the case of a small and open economy, like Malta, avoidance of wage inflationary pressure is 

desirable in order to avoid a loss of structural competitiveness. Government thus recognises 

the importance that changes in real wages must thus be in line with productivity 

developments at sectoral level. In Malta, wage bargaining largely takes place at enterprise 

level. 


This high degree of decentralisation is conducive to relative wage flexibility, as wages adapt 

more readily to the prevailing conditions in a particular industry. Government will ensure that 

its wage policy in the public sector contributes to wage moderation in the economy. 

Furthermore, Government will continue to aim to reduce the share of public sector 

employment, through further privatisation efforts, as well as the implementation of a strict 

recruitment policy. This will also help to instil further flexibility in the labour market. Malta’s 

flexicurity strategy will also contribute towards this objective by seeking to attract more people 

in the labour market, principally women and older workers, tackle undeclared work and make 

declared work more attractive, raise educational attainment and ensuring that labour market 

legislation is consistent with a flexible and dynamic labour market. 

Fiscal Policy 

Issues and Opportunities 

• Whilst the Maltese economy has sustained a positive growth momentum since 2005, 

the significant downside risk levels surrounding the global macroeconomic outlook pose 

a degree of uncertainty to the short-term growth prospects. These risks relate primarily 

to the expected slowdown in world economic growth, including in Malta’s main trading 

partners, as a result of the recent financial turmoil in credit markets. Other downside 

risks include the inflationary pressures stemming from international prices of oil, 

commodities and food products, as well as the appreciation of the Euro against the US 

dollar and the Pound sterling. Such cyclical developments pose an additional challenge 

to the implementation of Government’s fiscal consolidation programme. 

• As in other nations, demographic changes in Malta are expected to represent a 

significant challenge in the coming years. In particular, the combination of lower birth 

rate, longer life expectancy and the entry into retirement of the ‘baby-boom’ generation 

is expected to lead to a significant rise in the outlays on pensions paid by Government 

over the next twenty years. 

Demographic developments are also expected to result in increasing pressures on other agerelated 

public expenditure, namely health care and long-term care outlays. The availability of 

expensive medicines and technology coupled with the global scarcity of health care human 

resources provide additional pressures to the financial viability of health care systems. 

• Fiscal governance is an important element to ensure that budgetary targets are met. 

Furthermore, the effective and efficient functioning of public administration can play an 

important role in achieving a growth supportive environment. Over the recent years, 

significant improvements have been achieved in the provision of public services. 

Achieving modern, high quality and customer-focused public services remains a key 

Government priority. Given the scarce resources available, such objective must be 

achieved whilst ensuring that the available financial resources are spent, and the 

human resources are deployed, in an efficient and effective manner. 

• Adopting the euro entailed that Malta can no longer make independent use of monetary 

and exchange rate policies. Fiscal policy, together with product and labour market 

structural reforms, can constitute an important instrument of macroeconomic 

management. In particular, fiscal policy, specifically automatic stabilisers, can enhance 

the economic adjustment process when faced with certain types of short-run shocks. 

The smoothing capacity of automatic stabilisers may be limited for small, open 

economies, such as Malta, due to leakage effects. Moreover, it is necessary to ensure 

that the use of fiscal policy does not undermine long-term sustainability. In this context, 

enhancing the flexibility and efficiency of public spending becomes even more important, 

in order to increase the adjustment capacity of the Maltese economy within the Euro 

Area. 


• The public sector can contribute towards growth and employment through tax and 

expenditure systems that promote an efficient allocation of resources. On the 

expenditure side, this involves redirecting expenditure towards growth enhancing 

categories. Containment of recurrent expenditure and an increase of its efficiency would 

make room for increased expenditure on growth-enhancing categories. More efficient 

tax systems can also provide an important support to growth and employment. 

Vision and Objectives 

Securing a sustainable fiscal position is essential in order to ensure a stable and sound 

macroeconomic framework. This would generate the necessary confidence by economic 

operators and potential investors. It would also allow Government to use automatic stabilisers 

in economic downturns so as to stabilise demand without undermining the 3 per cent deficit 

reference value and the long-term sustainability of public finances. 

Whilst recognising that the current international environment poses an additional challenge to 

the achievement of the fiscal targets, Government remains committed to continue to 

strengthen the public finance situation. The main fiscal policy objective is to reach the medium 

term objective (MTO), of a balanced budget in structural terms (i.e. cyclically-adjusted 

balance net of one-off and other temporary measures) by 2010, in line with the Stability 

Programme 2007-2010 of December 2007. Achieving the MTO is part of Government’s 

strategy to secure long-term fiscal sustainability in view of demographic changes and their 

negative implications on public finances in the long term. Government’s Vision 2015 as well 

as the Pre-Budget Document 2009 highlight that achieving a budget surplus by 2010 

constitutes a key objective to which Government is committed. Such a fiscal target should 

enable the achievement of the MTO. Such improvement in the fiscal position will contribute to 

further reductions in the debt-to-GDP ratio. 

Securing a sustainable fiscal position in the long-term also remains a priority in Government’s 

policy agenda. The stated aim of the pension reform was to enhance the adequacy aspects 

whilst consolidating fiscal sustainability. Developments in retirement pensions will be 

reviewed, in line with the legislative commitments resulting from the pensions reform (which 

provides for a review every five years, with the first review scheduled for 2010), with a view to 

achieving further adequacy, sustainability and social solidarity. 


Microeconomic Pillar 

The turbulent economic conditions being faced globally are posing a series of challenges to 

Malta’s competitive environment. The Maltese Government is embarking on a number of 

measures and reforms with a view to mitigate the impact of these challenges whilst at the 

same time ensuring that Malta improves its attractiveness to foreign investors. 

Within this context, Malta’s microeconomic pillar proposes actions which address unlocking 

business potential, investment in knowledge and innovation, energy and climate change. 

Further action is anticipated on: 

• integrating a strategic approach to better regulation initiatives; 

• strengthening competition; 

• further aid schemes for new and existing businesses; 

• facilitating business start-up as much as possible; 

• refining the tourism product; 

• investing in R&D infrastructures and initiatives; 

• implementing the National ICT Strategy; and 

• liberalisation of land public transportation. 

In addition, Malta intends to continue focusing its efforts towards improving the environment 

dimension of the country. Within this context, Government is embarking on a number of 

initiatives which promote the generation of energy from renewable sources. Furthermore, the 

Government also aims to diversify from its dependency on fossil fuels for the generation of its 

power towards more sustainable and cleaner sources. 

Unlocking Business Potential 

Fostering the right environment in which businesses can operate is of fundamental 

importance in pursuing the Lisbon objectives. The Maltese Government is committed towards 

ensuring a competitive business environment and has embarked on a number of initiatives to 

ensure that this objective is achieved. 

In addition to the actions undertaken in addressing the Country Specific Recommendations 

and Points to Watch namely, strengthening of the competition authority and the introduction of 

a one stop shop, the new NRP is also focusing on new initiatives relating to: 

• Better Regulation; 

• the Small Business Act; 

• Tourism; 

• Public Land Transport Reform; 

• Intellectual Property; and 

• Services Directive. 

Better Regulation – From ‘Red Tape’ to ‘Red Carpet Treatment 

The Maltese Government believes that Better Regulation is a crucial element in improving 

Malta’s competitiveness. Government’s vision aims to eliminate “red tape” whilst transforming 

services to business and citizens into “red carpet” treatment. 


Better regulation aims at supporting and encouraging the business community; reducing 

customer detriment; and, further developing an efficient, effective and improving public sector. 

Malta’s better regulation strategy is now focusing on business and customer “pain points” so 

that the strategy is prioritised. The strategy will be aligned further with Government's Vision 

2015 so that Malta's strategic sectors offer the necessary minimum required regulation to 

facilitate as much as possible economic development. 

The setting up of the Better Regulation Unit (BRU) within OPM in 2006 is considered to be a 

step in the right direction to promote Better Regulation. The BRU is currently in the process 

of implementing its first Action Plan for Simplification (APS). In drawing up the first APS, the 

BRU has taken an intentionally inward-looking ‘top-down’ and ‘bottom-up’ approach. 

Government believes that the next step is to take simplification to another level and consult 

with the various business sectors to obtain ‘on the ground’ feedback. Furthermore, the BRU 

intends to review the customer care systems within the public administration and the 

enforcement regimes currently utilised with a view to further promote and protect the interests 

of the businesses, citizens and consumers. 

In achieving Government’s vision, that is, “fostering a culture of ‘red carpet treatment’ for 

businesses”, the Government of Malta has committed itself to further strengthen the BRU. 

The strengthening of the BRU will also permit the completion of the current APS and the 

launch of an updated version through an intensive, sectoral based consultation to target the 

key ‘pain points’ felt by businesses. 

Furthermore, the BRU will embark on other Better Regulation initiatives including the review 

of current customer care systems and enforcement regimes within the public administration 

and the formalisation of consultation guidelines within the public administration in line with 

Government’s established system of securing intensive dialogue between interested 

stakeholders in the decision-making process amongst others. 

Reduction of Administrative Burden 

In January 2008, the Maltese Government kick-started a public consultation process with a 

view to establish what is the perception of administrative burdens and how these can be 

reduced. 

The Maltese Government, in collaboration with the European Commission, organised a 

conference in February 2008 with a view to raise awareness on the Administrative Burden 

Reduction Programme. Furthermore, this conference also acted as a follow up to the 

consultation process. On the basis of this consultation process, the Maltese Government has 

identified the following four priority areas: 

• Company law; 

• Financial services; 

• Food safety; and 

• VAT. 

Similar to several other European countries, Malta has chosen to adopt the Standard Cost 

Model (SCM) as the tool that will be used to calculate the administrative cost of burdensome 

information obligations. 

To this end, the Government has concluded a mapping exercise on the legislation in the 

mentioned priority areas. The exercise consisted in reviewing the legislation of each of the 

four areas and identifying the information obligations that originate from national legislation. 

In all, 49 such information obligations were identified. The Information Obligations (IOs) 

consist of the following: 

• 6 IOs concerning VAT; 

• 26 IOs concerning Company Law; 


• 5 IOs concerning Financial Services; and 

• 12 IOs concerning Food Safety. 

Upon close examination of the results of the mapping exercise, it is evident that the large 

majority of the Information Obligations identified were either necessary (thus not fulfilling the 

condition that IOs have to be considered unnecessary in order to be proposed for reduction); 

or one-time obligations that would not only be difficult to quantify, but their reduction would 

have little or no real tangible effect on businesses. 

Government is proud to note that this exercise has shown that in the four areas under 

examination information obligations have been kept to a bare minimum. Notwithstanding this, 

Government still holds that there are areas that should be explored in search of unnecessary 

burdens. Therefore, the scope of the mapping exercise is being broadened and areas will 

also be looked into: 

• Pharmaceutical legislation; 

• Working environment / employment relations; 

• Fisheries; 

• Public procurement; and 

• Environment. 

These areas were chosen in an attempt to determine whether there is more scope for 

simplification in these areas with a view to setting a realistic reduction target and to achieve 

tangible benefits for businesses. 

The mapping of the new areas was completed in August 2008 and a preliminary analysis of 

the mapping results shows similar trends to those obtained for the four priority areas adopted 

initially. Notwithstanding, Malta is still fully committed to ambitious and systematic 

simplification to reduce administrative burdens on businesses. Therefore, after taking into 

account the above mapping results, Malta has set a target to reduce administrative burdens 

on businesses by 15% by 2012. However, Malta is leaving open the possibility of adjusting 

this target after completing the measurements. 

The mapping exercise will be followed by a pilot measurement project and a measurement 

exercise in the four priority areas adopted initially. To this end, SMEs will be extensively 

involved in the measurement exercise in order to ensure that the simplification measures 

identified would translate into actual reduction of administrative burdens to their benefit. 

The Small Business Act 

The Maltese Government has strongly supported the Commission’s Small Business Act. The 

Small Business Act builds on a set of principles and measures which lead into concrete action 

for a long term, predictable, transparent and simple regulatory framework for small and 

medium-sized enterprises. The Commission will be implementing a number of measures to 

reach such objective, while the Member States too, have the responsibility to adapt the 

measures according to their specific circumstances, thus retaining an element of flexibility and 

yet strive towards the same identified goals. 

The Maltese Government intends to carry out an exercise, involving major government 

stakeholders as well as constituted bodies to identify those measures which are best suited to 

provide its SMEs with the enhanced environment which is critical for their survival and growth. 

The exercise will also discuss the applicability of certain initiatives which are being proposed 

by the Commission, such as the Common Commencement Date, the only once principle and 

the use of the ‘SME toolkit’ before enacting legislation concerning SMEs. The exercise will 

also examine how the overall policy approach towards SMEs can be improved and rooted in 

the ‘Think Small First’ principle. 


It will also look at refining and adjusting current initiatives to better reflect the changing 

scenario in which these enterprises operate. These measures will then be developed into a 

Small Business Act for Malta to be given the standing of a law where considered necessary. 

Tourism 

The tourism industry is one of the main pillars supporting the Maltese economy. The Maltese 

Government will continue to invest in the tourism sector with a view to improve its tourism 

product. Such investments have already contributed towards registering positive results with 

an increase of 1.2% 43 and 22.8% 44 in inbound tourists and cruise liner passenger traffic 

respectively, in July 2008 when compared to July 2007. Within the next three year cycle, it is 

the intention of the Government to continue investing within the tourism sector. In fact, 

Government has embarked on a number of tourism projects including the upgrading of 

tourism zones and beaches. Furthermore a capacity building exercise will be undertaken with 

a view to ameliorate the local tourism product. 

Public Land Transport Reform 

The Public Land Transport reform has been identified as one of Government’s priorities for 

Malta in the coming years. In the past years, Malta has been driven by the liberalisation 

principle. This policy has been applied successfully in various industry sectors. 

Notwithstanding this policy, a number of public land transport sectors have traditionally 

operated in closed markets. These sectors ‘inter alia’ include the taxi service as well as the 

unscheduled transport sector. Within these sectors new entrants to the market are effectively 

closed due to the current restrictions. This also inhibits the creation of new employment 

opportunities in this sector. 

It is the intention of Government to liberalise these sectors. The liberalisation of taxis, mini 

buses and coaches operating within the unscheduled market will render these sectors more 

efficient and competitive thus contributing towards increased demand and expansion. In turn, 

the increased economic expansion in this area will lead to the creation of employment 

opportunities. It is expected that visible results from this measure will be seen by the end of 

2010. 

With regard to the Public Scheduled Transport, the Government intends to embark on this 

reform in order to increase the efficiency of this transport structure, which apart from offering 

a better service to users and increase employment, will also promote a modal shift from 

private to public transportation, thus reducing the number of vehicles in use concurrently on 

private roads. Moreover with liberalisation, this sector will be fully exposed to the competition 

forces, thus allowing market players to enter the market. 

It is expected that due to the complications arising from this reform as well as any changes 

envisaged in the public transport vehicles, this measure will extend beyond 2010. 

Services Directive 

The Government of Malta is fully aware of the importance of a correct and timely transposition 

of the Services Directive in order to ensure the free movement of services in the internal 

market and as another significant tool for the reduction of administrative burdens. 

43 News Release: Departing Tourists: July 2008 (154/2008), National Statistics Office. Available online from: 

http://www.nso.gov.mt/statdoc/document_file.aspx?id=2312 [Accessed on: 18 th September 2008] 

44 News Release: Cruise passengers: July 2008(147/2008) National Statistics Office. Available online from: 

http://www.nso.gov.mt/statdoc/document_file.aspx?id=2304 [Accessed on: 18th September 2008] 


The ongoing screening process has identified a number of authorisation procedures, 

administered by a smaller number of Competent Authorities. These authorisation and 

licensing schemes are being further evaluated to identify actions required to ensure 

compliance with the directive. Work on the identification of the best way to implement the 

other provisions of the Directive is also progressing with the focus currently being on the Point 

of Single Contact and the eMeans. The preferred option is for a physical point of single 

contact that will also provide back office support for the electronic system. Government is 

also considering the feasibility of incorporating this function into a wider business support 

centre to act as a one-stop-shop for all services provided to businesses in order to provide a 

leaner and quicker response for the needs of enterprise. 

The transposition process will be concluded by the established date of the coming into force 

of the Directive. 

Intellectual Property Rights 

In fostering a culture of innovation amongst SMEs, the protection of intellectual property is a 

fundamental aspect. To date, the number of domestic registration of trademarks and patents 

by Maltese nationals has always been very low when compared with the number of 

businesses which actually set up in Malta. Furthermore, over the past few years the number 

of trademarks and patents registered by local applicants has been decreasing. 

Within this context, Government believes that there is a need to increase awareness about 

the importance and benefits of trademark registration and patents at a national level. Hence, 

Government will initiate an information campaign in relation to the importance of trademarks 

and patents. Furthermore, other actions will be pursued with a view to facilitate the 

registration and other processes related to intellectual property. 

Investing in knowledge and innovation 

The Maltese Government is committed towards further investment in the area of knowledge 

and innovation. Specific emphasis is being made in the area of research and development 

and ICT. Significant results have been registered in the area of ICT however further action is 

being undertaken in terms of reaching Malta’s target in relation to R&D expenditure. 

R&D 

In its first National Reform Programme, the Maltese Government committed itself to achieve 

the target of 0.75% expenditure of GDP on R&D by 2010 both from the private and public 

sector. According to the latest statistics, the total expenditure by the general Government in 

2007 amounted to €11.3 million which is an increase of €0.7 million 45 over the previous year. 

Malta is committed to the implementation of the vision of European Research Area (ERA) and 

to supporting innovation in all its forms. The National Research and Innovation Strategy acts 

as a driver towards the implementation or the ERA. Malta’s objectives in relation to R&D are 

aimed at: 

1. Achieving the target of 0.75% expenditure of GDP on R&D by 2010; 

2. Supporting innovation through public procurement; 

3. Participation in joint programming activities; 

4. Science popularisation; and 

5. Targeted research strategies for identified priority areas. 

45 Source: National Statistics Office, Press Release 111/2008 – Expenditure on Research and Development in the 

General Government Sector: 2005 -2007. Available online from: 

http://www.nso.gov.mt/statdoc/document_file.aspx?id=2266 . [ Accessed on: 16 September 2008] 


Achieving the target of 0.75% expenditure of GDP on R&D by 2010 

Achieving the 0.75% target by 2010 is proving to be a major challenge to be achieved by 

Malta. Government intends to embark on the implementation of a series of measures with a 

view to accomplish this target. Measures which will contribute toward this target include: 

• strengthening the research infrastructure at the University of Malta; 

• establishing bursaries for PhD research students; 

• increase the funds available for Malta’s National R&I funding programme as a means of 

increasing national investment in R&D 

• the implementation of three research projects are planned. These projects will involve 

industry-academia consortia working on common issues of relevance. Two thirds of the 

funds earmarked for these projects are envisaged to be utilized by end 2010. 

Supporting innovation through public procurement 

Malta will compile an action plan for procurement with the engagement of relevant experts, 

facilitation of discussions and collaboration between government entities and involvement of 

stakeholders including SMEs are foreseen. It is envisaged that one pilot tender will be 

launched by 2010. 

Participation in joint programming activities 

On the objective of promoting increased internationalisation of research through joint 

programming, Malta plans to participate in a joint call in one of the identified national priority 

research areas where there is an indication of significant take-up at national level. 

Science popularisation measures 

A project promoting science and technology among students and the general public as well 

as the strengthening guidance and counselling services to encourage uptake of these 

subjects will be undertaken. The ultimate aim is to increase the availability of skilled 

employees in the areas of science, technology and engineering. 

Targeted research strategies for identified priority areas 

For the period covered by this NRP, it is foreseen that targeted research strategies for two of 

the four priority areas will be formulated, and partly implemented. The two areas and related 

activities are as follows: 

• Increased efforts towards more and better research in the manufacturing sector: 

during the timeframe of the NRP a project to introduce the local industry to the benefits 

of research and innovation, as well as strengthening liaison and collaboration between 

industry and academia will be implemented. The project includes a number of activities 

in this regard, such as the establishment of a manufacturing platform to serve as a 

steering committee for the initiative, the formulation of a manufacturing research 

strategy, the realisation of three research projects through industry-academia consortia 

as well as dissemination and training. 

• Formulation of a health research strategy and action plan: Malta is embarking on 

the development of a Health Research Strategy and Action Plan in order to chart the 

way forward for local research activity in this sector. This document will include as its 

main deliverables a manageable number of recommended actions to be taken over the 

next four years and the identification of concrete opportunities for local health research 

which will have a clear return on investment in the short to medium term. 

ICT 

The Maltese Government has been heavily investing in the ICT sector with a view to establish 

Malta as a centre of excellence in the area of ICT. 


The results of this investment have been already acknowledged by the European 

Commission in its report “Preparing Europe’s digital future i2010 Mid-Term Review”. The 

European Commission has recognised Malta’s high ranking and has described it as “well 

advanced in information society”. Significant progress has been registered in the area of 

basic public services available online. Table 3 below shows the positive trends being 

registered in the area of ICT as a result of Government’s investment. 

Table 5 - Achievements registered in the ICT sector within the past 3 years 

2005 2006 2007 

Level of Internet 

Households 46 41% 53% 54% 

Broadband penetration 

rate 47 

E-government usage by 

enterprises - Percentage of 

enterprises which use the 

Internet for interaction with 

public authorities 48 

E-government usage by 

individuals by gender - 

Percentage of individuals 

aged 16 to 74 using the 

Internet for interaction with 

public authorities 49 

E-government on-line 

availability - Percentage of 

online availability of 20 

basic public services 

10.4 12.8 13.9 

68% 67% 77% 

19% 17% 25% 

40% 75% 95% 

The above results are encouraging and Government is committed to continue to sustain its 

efforts with a view to continue to improve the Maltese ICT sector. In fact, Government has 

launched a new faculty in 2007 within the University of Malta and a new building in the 

University of Malta will be specifically built for the provision of training within the ICT sector. 

Government also launched the Smart Island National ICT strategy 2008-2010, which seeks to 

address pro-actively the major challenges which Malta’s development in this sector shall 

inevitably face. Primary amongst these shall be the need for the identification and address of 

the ‘new’ digital divides which will emerge in the coming years, the successful application of 

technologies in the enhancement of the quality of life of citizens and the constantly moving 

target of becoming (and remaining) a leading ICT industry in the region. 

The Smart Island Strategy aims, to set a vision for Malta to become one of the top 10 

information societies in the world. The main objectives set within the Strategy include: 

• preparing Malta for the next generation of technology by laying the foundations for a 

world class infrastructure; 

46 

Percentage of households who have internet access at home. Figures abstracted from: 

http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,45323734&_dad=portal&_schema=PORTAL&screen=we 

lcomeref&open=/&product=REF_SI_IR&depth=2 [Abstracted on: 19 August 2008] 

47 

Number of broadband access lines per 100 inhabitants Figures abstracted from: 



48 

Figures abstracted from: 



49 

Figures abstracted from: 



49 


• overcoming the last miles of the digital divide, whilst bringing people together 

irrespective of their social status, using ICT to give new opportunities; 

• developing an even smarter workforce by continuously investing in people and nurturing 

their skills and potential; 

• using information systems and technology to improve the quality of life of Maltese 

citizens; 

• re-inventing the Government of Malta by transforming the public service in terms of its 

service delivery and governance; 

• enhancing the productivity of Malta’s private sector and its competitiveness through the 

adoption of e-business; and 

• promoting Malta as a world-leading ICT hub for foreign direct investment whilst using 

ICT as a pillar to the economic growth of the nation. 

In addition to the aforementioned strategy. Government has also launched a series of 

initiatives aimed at promoting ICT. These initiatives included: 

• Blues Skies Scheme: the provision of Internet within households which do not have an 

internet connection at a cheaper rate of €3 per month. 5,600 households have 

benefited from this scheme; 

• Smart Start: this schemes aims to minimise digital divide and making ICT affordable to 

all. The SmartStart has given the opportunity to approximately 1,200 persons 

benefiting from social or unemployment assistance benefits, persons with a disability 

registered with the National Commission of Persons with Disabilities, and Not-For-Profit 

Organisations to purchase a PC in a good working condition at a very affordable price; 

• StarOffice: through a partnership with the private sector, Government has provided 

office software for students and persons with a disability at €2 per pack. This scheme 

was taken up by 600 persons. 

• Smart Women: is aimed at increasing the employability of women through the offering 

of a number of Information and Communication Technology (ICT) certification 

programmes. The take up of this scheme is encouraging with 2,000 women having 

already benefited from this scheme; 

• Computers for €0.99 per day scheme in partnership with the banks and the private 

sector to make brand-new PCs available to the public at the affordable rate of €0.99 per 

day; 

• ICT awareness campaign aimed to attract students to take up ICT courses at the 

various institutions. 

Energy and Climate Change 

The sustainability of natural resources has been featuring high in the European agenda. 

Malta is cognisant of the need to safeguard the sustainability of natural resources in ensuring 

the country’s well being. Within the new NRP, Malta intends to focus its efforts towards 

ensuring energy efficiency, mitigating the impacts of climate change and water conservation. 

Energy 

The production of energy from fossil fuels is the most obvious source of environmental 

pressure due to the combustion processes involved. Indeed, this sector contributes to about 

63% of Malta’s GHG emissions. 


In this respect, energy efficiency can have a significant impact on the demand for energy and 

so, it can reduce the country’s fuel bill and the release of carbon into the environment. Within 

this context, Malta will embark on a set of initiatives that will contribute towards a 10% 

reduction in CO 2 emissions by 2020. In fact, Government has already set up a committee of 

national experts with a view to assess the possibility of tapping into sources of alternative 

energy as well as to address Malta's national obligations in relation to carbon dioxide 

emissions. 

The Maltese Government needs to increase reliance on RES with the aim to diversify the fuel 

mix, reduce air pollution, reduce local dependence on polluting and costly fuel sources and 

ease economic burdens on domestic households and commercial enterprises. Within this 

context, Government will heavily invest in renewable energy sources through the assistance 

of structural funds. It is envisaged that a number of financial subsidies will be distributed 

locally to target the domestic and commercial sector in conjunction with a national information 

campaign. 

Following the widespread success achieved with the rebate schemes on energy saving 

domestic appliances, the Government intends to extend such scheme to RES equipment by 

increasing financial subsidies for solar water heaters, photovoltaic and micro-wind generators. 

In 2006 market response to solar thermal installations in Malta saw a significant improvement, 

as requests for financial subsidies increased to 1,564 when compared to the 360 subsidies 

awarded in 2005. Through these aid schemes Malta intends to double such figure to 3,000 

units solar water heaters sold per household in 2009, (in addition to the 220 photovoltaic units 

and micro-wind generators to be sold ) thus providing a substantial contribution towards the 

targets of 2020. 

It is estimated that a total amount of 3,145 Mwh/annum (3,000 Mwh/annum domestic + 145 

Mwh/annum Commercial) in energy will be saved each year. This means that a total of 

903,500 Kg of CO 2 (865,800 Kg Domestic + 37,700 Kg Commercial) will not be released into 

the atmosphere. 

The Maltese Government is also planning to embark on a wide educational campaign, partly 

co-financed by the 2007-2013 EU structural funding, that will educate the general public on 

the needs of being ‘energy saving’ conscious and on the need of adopting energy friendly 

measures as well RES equipment. The Government will disseminate such good practices 

through seminars, conferences, newspapers, TV and radio spots, websites and schools. 

Climate Change 

Climate change is a cross-cutting global issue which is affecting the foundations of socioeconomic 

life globally. Malta, being a small island state, is highly susceptible to the negative 

impacts of climate change. These impacts include rise in sea levels, increase in draught, 

higher temperatures, etc. These impacts have an effect on key economic sectors including 

tourism, manufacturing and agriculture. 

In 2008, Malta has managed to successfully complete its Greenhouse Gas (GHG) Inventory 

for the period 1990-2006 and submit the National Inventory Report for 2008. The national 

GHG inventory is also streamlined with the national emissions inventory. It is envisaged that 

data from the GHG inventory will assist in the development of national policies towards 

emission reduction. 

In addition, Government appointed the Climate Change Group of Experts in June 2008. The 

Group of Experts is working on an action plan to reduce GHG emissions, over a 20 week 

period, with the scope of addressing Malta’s commitments within the negotiation process of 

the Climate Change and Energy Package. Furthermore, a National Strategy for Climate 

Change will be adopted with a view to better address the challenges posed by climate change. 


Reform in the Vehicle Registration Tax Regime 

Malta is amongst the top five EU Member States with the highest proportion of private car 

ownership – two cars for every household. The average vehicle age of private road vehicles 

is relatively high with over half registered vehicles between five and twelve years old. The 

continuing growth in private car ownership and use is causing increased traffic congestion, 

whilst older vehicles impact more negatively on the environment. 

Declining patronage figures show that the use of Public Transport by private citiziens is not 

very widespread. Over the ten year period 1995 – 2005, annual patronage has decreased 

from 36 to 29 million commuters 50 . One of the principal reasons underlying the consumer’s 

preference to use private transport instead of the public bus service is because the current 

public transport routes have been established with Valetta as the central hub for all 

connections to the various towns and villages. Today it is acknowledged that an improved 

system is required in order to increase the use of Public Transport by the Maltese 

community. The scheduled public bus service is one of the pillars of the Transport Reform 

initiative which principally seeks to achieve a favourable modal shift towards public transport, 

thereby mitigating the negative environmental impact. 

It is the intention of the Maltese Government to amend the motor vehicle registration tax and 

Annual Road Circulation tax to one based on the Polluter Pays Principle. In effect this 

change in tax will be based on a CO 2 and size based Registration Tax. Moreover, the Annual 

Circulation Tax will be based on the emissions and age of the vehicle in question. This 

should induce new vehicle owners to purchase smaller and less polluting vehicles since the 

cost of maintaining a vehicle that emits less and which is smaller in size will be more 

advantageous. 

Water Conservation 

The conservation of water is a very important element especially in Malta where there is a 

shortage of water supplies which are usually mitigated through reverse osmosis systems. 

Utilising reverse osmosis systems to meet the local water demand implies that Malta is also 

utilising its energy resources for the production of water resources. This is having a direct 

impact on the levels of energy consumption in Malta. In addressing this issue, Government 

needs to adopt a strategy whereby conservation of water is promoted. 

Densely populated areas where urbanisation has taken place along watercourses have in the 

past few decades become increasingly prone to flash flooding. Presently all water runoff from 

these areas culminates and passes through the lower areas, such as Msida, Gzira, 

Marsascala, Marsa and Qormi, and poses greatest risks to life and property, before going to 

the sea. The situation is untenable and with climate change the vulnerability of these areas is 

likely to increase. 

50 Figures obtained from the Ministry of Investment, Transport and Communications. 


Employment 

Increasing the overall employment rate is a matter of priority in Malta. A multi-faceted 

approach is being undertaken with a view to address different segments of the population 

including youths, women and older workers. This approach has led to a decrease in the 

unemployment rate which amounted to 6.4% which is less than EU 27. In addition, 

Government has now also embarked on its first pathway for flexicurity which will be 

implemented over the next cycle of the new NRP. 

Regional employment in the island of Gozo is also being given high priority. The employment 

strategy being pursued aims to exploit the human resource potential to achieve a flexible 

labour market and to increase employment opportunities in Gozo. Furthermore, the 

employment strategy is intended to facilitate the transition from traditional sectors to the 

growth sectors and thus aiming to increase employment opportunities in Gozo. 

In addition to the actions undertaken by Government addressing the country specific 

recommendations and points to watch, Government has also committed to introduce 

measures which promote the importance of health and safety at the place of work with a view 

to further contribute towards the overall employment rate. 

Health and Safety 

A contributor towards the retention of employees within the labour market is occupational 

health and safety. The Maltese workplace should be an environment where health and safety 

issues are not considered as afterthoughts but are integrated throughout all work systems 

and processes. This aim requires the cooperation of all stakeholders. 

Appropriate preventative measures should be in place in all workplaces in Malta to minimise 

the possibility and severity of occupational incidents and illness. The ultimate goal should be 

zero preventable incidents that can affect occupational health and safety. 

Employers, employees and self employed persons will be aware of the importance of 

preventative health and safety measures, and will have the knowledge, expertise and 

commitment to apply these measures to their workplace. 

Within this context, the Maltese Government is further consolidating its efforts towards 

improving health and safety at the place of work. During the next three years, Government 

through the Occupational Health and Safety Authority shall develop an effective legislative 

framework and enforcement procedures with a view to ensure compliance with health and 

safety regulations. 

An Overview of Recent Labour Market Trends 

The labour market in Malta has been buoyant in 2007 and 2008, registering the eighth highest 

levels of employment growth in the European Union. Productivity has risen each year since 

2004, standing at a growth of 2% in 2007 over 2006. The tax wedge on the cost of labour in 

respect of low wage earners is the second lowest in the EU27. Government has already 

taken a number of actions in respect of Malta’s country-specific recommendations, seeking to 

increase the labour supply, to reduce undeclared work and to make work pay. This 

momentum will be sustained in 2009 and 2010 with a view to reaching Malta’s employment 

targets for 2010. 

The Labour Market in 2008 

Since 2004, there have been increases on various employment indicators. The overall 

employment rate in 2007 stood at 55.7%, a rise of 2.3% over 2004. The rate for men has 

decreased over this period by 0.8 per cent to stand at 74.2%, which is identical to EU15 and 

higher than the EU27. 


The rate for women is – at 36.9% - still twenty percentage points lower than the European 

average though it has risen by 5.3 per cent since 2004. However, the rates differ markedly by 

age group as illustrated in the table below. 

Table 6 - Employment Rates, 2007 

Age Male Female Total 

15 – 24 48.0 44.0 46.0 

25 – 54 90.1 40.6 65.7 

55 – 59 68.9 (20.20) 44.0 

60 – 64 (21.5) -- (11.8) 

15 – 64 74.2 36.9 55.7 

N.B. Rates in brackets not reliable due to small sample size 

The gender gap in employment remains; at 37.3% it is two and a half times greater than the 

EU27 average. However, the gap is much lower when it comes to persons with high 

educational attainment (9.9% vs. 6.7% in EU27). Furthermore, the gender gap between 

young women and young men is, at 4%, lower than that in the EU27 of 6%. The level of 

gender segregation in both occupations and sectors is also lower in Malta than the EU27. 

The employment rate of young people aged between 15 and 24 has risen 0.8% since 2004 to 

stand at 46%. However, that of older workers has decreased by 2.9%. The employment rate 

of people aged between 55 and 59 is, at 44%, 13.5 percentage points lower than the EU27 

rate. One must take into account the historical gender dimension; in fact, the male rate in this 

age group is similar to that of the EU27 (67.2%). Another important indicator is the average 

exit age from the labour force. In 2006, this stood at age 58.5, an increase of 0.9 over 2001 

but still low. 

Unemployment has continued to decrease in 2008, to stand at 6.5%, the lowest rate since 

2000 (when the first Labour Force Survey found unemployment to stand at 6.3%). The drop 

is visible both among men (from 6.5% to 5.9%) and women (from 8.9% to 7.7%). Among 

young people, the unemployment rate is 13.3%, and the unemployment ratio 51 is 7.1%. The 

drop in the unemployment ratio has been particularly marked for young women (from 8.8% to 

5.5%) but is also visible among young men (from 9.5% to 8.6%). Long-term unemployment 52 

has also decreased, from 3.4% in 2004 to 2.6% in 2007; this is true among both men and 

women. 

Working arrangements in Malta tend to be less diverse than in the EU27, though a slight 

increase is evident in this respect. In 2007, 26.2% of employees worked in ‘diverse’ 

arrangements 53 compared to 39.1% in EU27. In Malta, the number of those working on a 

part-time basis only, has risen every year (in 2007, 9.2% compared to 14.4% EU27). This is 

particularly true of women. Those working on fixed-term contracts has risen slightly but is still 

very low (3.1% compared to 10.7% EU27). Self-employment in Malta is closer to the 

European average (13.8% compared to 15.1% EU27). The share of female employment in 

part-time and fixed-term work is higher than the share of male employment in these 

categories; the opposite is true of self-employment. 

In 2007, Maltese employees worked an average of 40.4 hours per week (40.5 EU27). Men 

worked 41.1 hours, while women worked 38.8 hours on average. 18.2% of Maltese 

employees have access to flexible working time (EU27 31.3%); the rates for men and women 

are similar (18.4% and 17.8%). 

In respect of workforce skills, there has been a rise in the proportion of adults in lifelong 

learning, from 4.5% in 2000 to 6.0% in 2007 (EU27 9.7). Men are more likely to participate in 

such activities, presumably through work, than are women (6.4% and 5.7% respectively). 

Among those with higher or medium educational attainment, the lifelong learning rates are 

higher in Malta than in the EU27 (higher: 19.3%, EU27 18.6%; medium 11.2%, EU27 8.9%). 

51 i.e. the total number of unemployed youth as a share of all those in the same age group. 

52 Those unemployed for 12 months or more as a proportion of total active population 

53 Includes part-time, fixed-term and self-employment 


The opposite is true for those with low educational attainment (2.8% compared to 3.9% EU27). 

According to CVTS statistics and Eurostat, in 2005 the investment 54 in adult training by 

enterprises in Malta was 1.8, compared to 1.6 in the EU27. The share of employees 

participating in continuous vocational training in 2005 was 32%, compared to 34% in EU25. 

The share of male employees participating in CVT was 30% (34% EU25), and higher among 

female employees 36% (32% EU25). 

Malta’s Flexicurity Pathway 

In 2008, a Working Group was set up to analyse the Maltese labour market from the 

perspective of flexicurity and to draw up a pathway, and a set of concrete and feasible 

recommendations for the period 2008 to 2010. The Working Group comprised a number of 

senior officials from relevant public sector entities as well as representatives of the social 

partners. The Group analysed the labour market as well as current policies and programmes 

according to each of the four flexicurity pillars. Subsequently, Malta’s necessary pathway 

was determined to be a hybrid of Flexicurity Pathways 3 and 4, that is, ‘to improve the supply 

of skilled labour across the skills spectrum’. This pathway has four principal objectives for the 

years 2008-2010: 

• to anticipate and provide for an adequate supply of skills in emerging high-skill sectors 

of the economy, and simultaneously 

• to ensure that those at the lower end of the skills spectrum are sufficiently skilled and 

motivated to take up work in the formal economy and to progress within it, 

• to improve work-life balance, and 

• to improve awareness and enforcement of the rights and obligations of employers, 

jobseekers and employees. 

The Flexicurity Pathway is accompanied by thirty five concrete measures intended to reach 

these objectives, which are reproduced in Appendix 02. 

The Public Employment Service 

The Employment and Training Corporation (ETC) is a key institution in the formulation and 

implementation of employment policy in Malta. Its annual throughput – of clients receiving a 

service as a jobseeker or trainee – amounts to one sixth of the total labour supply. At ETC, 

jobseekers register for work once a week and engage in an individualised Personal Action 

Plan process together with an Employment Advisor. ETC offers an Early Intervention Unit in 

cases of collective redundancies; this involves a one-stop service for persons to be made 

redundant which includes profiling, advice and re-training. ETC also administers 

apprenticeships and traineeships; operates the EURES office in Malta and the work permit 

system; and carries out law compliance activities towards reducing undeclared work. 

In line with both the European Employment Strategy and national priorities, ETC works, each 

year, towards fourteen business targets. The majority of these targets have been met and 

exceeded since their establishment in 2005 and will be maintained as targets during the 

Corporation’s Business Planning period 2008 – 2010. Thus ETC will aim to increase, by at 

least one per cent each year, its outputs in respect of the following: 

1. ETC’s capture of private sector vacancies 

2. ETC’s placement of jobseekers in private sector employment 

3. The number of low-skilled jobseekers who undergo training in basic skills necessary for 

employability 

4. The drawing up of a personal action plan with every new young jobseeker by the fourth 

month of unemployment 

54 Direct costs and labour costs of participants divided by total labour costs 


5. The drawing up of a personal action plan with every new adult jobseeker by the sixth 

month of unemployment 

6. The placement of each registered unemployed on an active measure within nine 

months of registration for work 

7. The number of registered disadvantaged job seekers who are put on active measures 

every year 

8. The proportion of registered long-term unemployed on active measures 

9. The number of non-registrants who are trained 

10. The number of persons who make use of training grants each year 

11. The number of infringements identified 

12. The percentage of strike-offs upheld by the National Employment Authority 

13. Women’s share of ETC short courses 

14. Women’s share of apprenticeships and traineeships 

In addition to its core business services referred to above, ETC will be assisted to reach and 

exceed these targets due to a range of specific programmes aimed to meet the needs of the 

Maltese labour market, many of which programmes are to be co-financed by the European 

Social Fund. The principal programmes include the following. 

ETC will be operating a Training Aid Framework, from late 2008 until the end of 2013, partfinanced 

by the European Social Fund. This programme should make a significant impact 

upon rates of lifelong learning in Malta. It provides training grants to the self-employed and to 

private sector employers who provide their staff with on- and off-the-job training. The amount 

reimbursed will depend on the size of the undertaking and the type of training provided. This 

programme is expected to provide for the training of the equivalent of 2.5 per cent of the 

labour supply and will cost a total of € 9 million. 

While the Training Aid Framework is intended to maintain and enhance the skill levels of 

those already in work, the Employability Programme will provide for a wide range of training 

initiatives aimed primarily (though not exclusively) at jobseekers and the inactive. The 

initiatives under this programme will consist of training and re-training in a variety of key 

competences, trade and non-trade skills; dual-system traineeships and a strengthened skills 

assessment system. The implementation of this Programme will greatly increase ETC’s 

training outputs, which range over 65 different courses. To date, ETC’s annual training output 

has been equivalent to five per cent of the labour supply; this Programme is expected to raise 

this figure to eight per cent. This increase in training output is being further supported by 

Phase 1 and Phase 2 of the extensions to ETC’s training facilities made possible by the 

European Regional Development Fund. 

Another major initiative due to be launched in late 2008 is the Employment Aid Programme, 

also co-funded by the European Social Fund. This programme is intended to further promote 

the integration of persons from disadvantaged groups into work. A subsidy of half the wage 

cost and half the employer’s social security contribution will be made available to employers 

who recruit persons from a defined list of groups and who retain them in employment for at 

least twelve months. Regular monitoring will take place to ensure that this subsidised 

employment is a positive experience for both parties. Among other groups, the Employment 

Aid Programme will cater for Malta’s employment priorities including persons aged 50 and 

over, inactive women, low skilled young people, and persons with disability. It is expected to 

encourage the recruitment of the equivalent of one per cent of the labour supply over the five 

years of the project period, and to amount to € 10 million. 

In addition to the wage subsidy available in respect of low-skilled young people, ETC will also 

be implementing a Youth Employment Programme, which is a streamlined and improved set 

of services for young people as reflected in the Youth Strategy 2008/2009. It is aimed 

particularly at early school leavers (who do not pursue post-secondary education) but also at 

those in precarious work who would benefit from further training and support. 


The project will help young people to clarify their career choices and the pathways towards 

them; to improve their skills in their chosen area as well as in jobsearch; to increase their 

knowledge of their rights and responsibilities as jobseekers and prospective employees; and 

to provide a holistic programme of information and skills which would help these young 

persons to further develop their skills and competencies. 

A Gender Equality Programme is also being developed by ETC to be launched in 2009. This 

programme aims to raise awareness about various aspects of gender equality relating to work 

and family life. The main themes will include flexibility at work, overcoming gender 

stereotypes and the sharing of family responsibilities. The main target audiences are inactive 

women, lone parents, registered unemployed women, women and men with family 

responsibilities and employers. ETC will also be launching its fourth biennial Gender Equality 

Action Plan 2009-2010. 

In order to further promote the integration of persons from disadvantaged groups while 

respecting the principle of subsidiarity and the expertise of numerous professionally run 

NGO’s in Malta, ETC will be operating its Social Inclusion Partnership Programme from 2009. 

This will be a strengthened and rationalised version of the various cooperation agreements 

that ETC has managed with a number of NGOs in recent years. Through the Programme, 

expert NGO’s will provide prevocational and on-the-job training to clients in their field of 

expertise, will help them find work and will monitor and support them during the first months of 

their work placement. Persons to be assisted under this programme include those with 

intellectual and physical disabilities, with mental health difficulties, ex-convicts and exsubstance 

abusers. 


Education and Training 

The Maltese compulsory education system is currently being reformed in order to make it 

more flexible to respond to the individual needs of the student who is placed at the centre of 

the system. The former Education Division, as a central government department, was 

responsible both for the administration and management of State schools and for the 

monitoring and the quality assurance of all schools, State and non-State, providing an 

educational service from kindergarten through primary and secondary education up to the 

compulsory education age of 16. 

The Education Act, amended in 2006, provides for two directorates with distinct roles and 

functions, though complementary to each other: 

1. the Directorate for Quality and Standards in Education which is responsible for quality 

assurance of all schools providing an educational service from kindergarten through 

primary and secondary education up to the compulsory education age of 16, and 

2. the Directorate for Educational Services which provides for the central overall 

management of the State education system up to the end of compulsory education. 

Curriculum Review 

In January 2008, Government announced the initiation of a consultation process to draw up a 

National Curriculum Framework for early childhood, primary and secondary education, as 

stipulated in the amended Education Act of 2006, to replace the current National Minimum 

Curriculum. The process, which started in April 2008, will produce a national curriculum 

framework with updated aims and objectives, among other features, for the different 

educational phases. This will provide a clear vision for all sectors especially in the College 

network recently set up within the state school sector, in making curriculum related decisions. 

It is envisaged that this document will be completed in 2009 and will be followed by a public 

consultation process. The final document will be then published by 2010. 

Core Competencies Policy and Strategy 

In March 2008, the Maltese Government launched a process to draw up a policy and strategic 

plan which addresses the acquisition of core competencies. The focus is on numeric and 

digital literacy for all pupils in the primary cycle. This measure ensures the early identification 

of pupils who are facing challenges in acquiring these skills and subsequent early intervention 

to ensure the acquisition of such competencies by the end of the primary cycle. 

The policy and the strategic plan will be available to Colleges in 2008/2009. This document 

will then be refined taking into consideration the feedback received during the first year of 

implementation. This measure will ensure that all pupils are literate in these basic 

competencies at primary level and therefore have full access to curricular opportunities at 

secondary and post-secondary levels. 

Review of the Transition from Primary to Secondary Education 

At the end of the primary cycle within the State sector pupils sit for a national examination 

which determines which type of secondary school they attend (either Junior Lyceum or 

Secondary school). Around 60% of pupils make it to the Junior Lyceum which is the more 

academic of the two types. Entry into several boys’ Church secondary schools involves a 

different selective examination. The recently set-up College system, whereby pupils from a 

number of primary schools in the same region feed into one boys’ and one girls’ secondary 

school the infrastructure, allows for a more inclusive system. The results of a review that 

address selectivity, and the transition process, are being discussed at Ministerial level. A 

public consultation process is planned for the third quarter 2008 and decisions will be taken 

by the end of 2008. A number of interim measures are planned for 2009 and 2010. 


This process aims to facilitate the transition process and provide an inclusive educational 

experience for all pupils, thereby developing their confidence and self-esteem. This measure 

addresses the reduction of early school leavers by increasing retention rates. 

Promoting literacy skills in young people 

While Malta has developed its systems of data collection and is analysing the level of reading 

skills in primary and secondary schools on a national level, Malta’s participation in the 

collection of international comparative data is essential. In this respect Malta is seeking funds 

to be able to participate in international surveys such as PIRLS and PISA which will provide 

valid indicators. 

Within the new College set-up students at secondary level, lacking basic skills including 

literacy, are being provided with customised programmes to address their needs. Such 

programmes supplement existing measures at both primary and secondary levels. This will 

ensure that all young people leave compulsory education functionally literate. In addition, a 

policy is being introduced in 2008/09 to ensure early identification of pupils who are facing 

difficulties in acquiring literacy skills in primary schools and a strategy aimed at subsequent 

early intervention is accompanying it thus ensuring the acquisition of literacy competencies by 

the end of the primary cycle. 

An employment strategy to increase capacity building in the student services sector is also 

underway so as to offer support to those students facing educational challenges or are at 

some form of educational disadvantage. 

Increasing the number of graduates in Science and Technology 

At compulsory education level, measures are being undertaken with a view to encourage 

more students to take up courses in Mathematics, Science and Technology at tertiary level. 

These measures include: 

• the refurbishment of Science Laboratories: nurture a positive attitude to science and 

technology and develop inquiry-based learning and scientific skills among secondary 

school students by refurbishing and upgrading science and technology laboratories By 

2010, all science laboratories and a number of technology laboratories in all state 

schools will be upgraded. This measure will contribute towards increasing the number 

of students opting for and obtaining certification in the sciences. 

• strengthening science teaching at primary and secondary level: the current curriculum 

review is also looking into the teaching and learning of science at both primary and 

secondary levels with a view to strengthen science within compulsory education. It is 

envisaged that concrete measures will be undertaken from 2009 following the outcome 

of this review. 

In addition, these actions will be complemented with significant investments at MCAST, the 

Junior College and the University of Malta to upgrade teaching laboratories. In particular, the 

University of Malta is now in a position to equip a number of specialist laboratories, ranging 

from biology, chemistry, biotechnology, physics, earth sciences, pharmacology, electronics, 

and ICT amongst others to support teaching and research at undergraduate, postgraduate, 

and postdoctoral levels. 

Developments in further education 

Further education in Malta includes all post secondary institutes and colleges which provide 

general academic teaching or vocational education and training leading to National 

Qualifications Framework (NQF) level 5. 


This sector is witnessing ongoing changes in response to changes both in the underlying 

school system and national curriculum as well as the evolving shape of higher education and 

the respective entry requirements to a growing range of programmes. This section outlines 

some of the key developments within this sector. 

Expansion of the Junior College 

The University of Malta has just been granted funding to extend the facilities of the Junior 

College 55 to address the acute space problems experienced in the past few years in the wake 

of the growing number of students. Moreover, it is envisaged that within the next two years 

the Junior College will upgrade of ICT facilities for staff and students as well as refurbish and 

upgrade laboratories and sports facilities. 

Ongoing developments within the Institute for Tourism Studies 

The Institute of Tourism Studies (ITS) recognises the fact that human resources are the most 

important factor in addressing the new challenges within the tourism sector in Malta. The 

current and future workforce in the sector require further training to use the newest electronic 

technologies and must be increasingly motivated to deal with new markets and multicultural 

backgrounds. 

In this respect ITS has invested heavily in its eLearning capacity and adoption of IT in its 

pedagogies. Additionally, ITS is constantly seeking opportunities to collaborate and 

participate actively in various EU or international projects which invariably enrich the 

development of the ITS in all aspects of its mission. 

In recent years ITS has been working on offering programmes which lead to degrees from 

foreign Universities, including programmes leading towards a Bachelor of Arts in Hospitality 

Management and a Bachelor of Science in Culinary Arts. Both programmes contain an 

element of work-based practice and consequently are a good fit with the current portfolio of 

programmes offered at ITS. 

Malta College for Arts, Science and Technology Master Plan 2008-2013 

During the last seven years, MCAST has been the primary further education and training 

institution contributing to a substantial increase in the overall number of students continuing 

with their studies beyond compulsory education age. MCAST is open to both young students 

who intend to continue with their studies beyond compulsory education age as well as adults, 

whether already working or considering joining the labour market. 

MCAST has raised the status and attractiveness of vocational and professional education and 

training. It is an inclusive education and training institution open to young people and adults 

with varying educational attainment and certification. It currently offers four main levels of 

programmes. It is envisaged that within the next two years MCAST will start offering the first 

degree level programmes. Moreover, MCAST provides different entry and exit points, 

depending on the individual’s aspirations and potential. Over 120 courses are currently being 

offered, and these satisfy most of the existing demands by young people, adults as well as 

industry. According to current estimates the number of full-time students will rise from 4,537 

in 2007/08 to 5,000 in 2008/09, to 5,500 in 2009/10. 

Government will continue to sustain higher rates of educational attainment. Within this 

context, MCAST will be investing in a staff Continuous Development Programme through topup 

degrees offered in collaboration with reputable Universities to develop academic and 

administrative staff for the improvement of courses offered and for the launch of new ones. 

55 Junior College is a college specifically designed to prepare students for University. 


In addition, MCAST is embarking on the implementation of a master plan for the physical 

restructuring of the Corradino main campus in order to incorporate the nine Institutes currently 

spreading in five different locations. The master plan will turn the current physical 

infrastructure into a state-of-the-art campus that will satisfy the estimated growth of the 

number of full-time and part-time, day and evening, students as well as adult returnees for 

upgrading and re-skilling within the national lifelong learning process. The aim is to bring 

together all the Institutes to pool and share resources, facilities, expertise, spaces and 

services and to provide more opportunities for students to mix and exchange ideas and 

experiences. At the same time more Institutes will be working together in delivering joint 

programmes and making it possible for students to follow modules in different institutes. 

Evening Courses 

MCAST already offers a very wide range of short and longer courses, generally in the evening, 

but also during the day, to adults who wish to upgrade and update their knowledge, 

competences and skills or undergo retraining or re-skilling. Evening training programmes will 

be offered in various fields of study. The following represent the overall estimated intake over 

the period 2008 -2010: 

Table 7 - Estimated number of students attending evening courses at MCAST. 

Sector 

Number of learners 

CPD MCAST Staff 425 

Electrical and Electronics 640 

Mechanical Engineering 500 

Community Services 427 

Building and Construction 362 

Art and Design 1,195 

ICT 987 

Business and Commerce 227 

Agribusiness 265 

Maritime 2,632 

Total 7,660 

The University of Malta 

Having extended the portfolio of the undergraduate and postgraduate teaching programmes 

in the past decade, and having established its credentials and ability to participate as a peer 

in EU RTDI programmes, the University of Malta is now in the process of consolidating past 

achievements whilst building its infrastructure to achieve future goals. 

In the past two years, the University has been strengthening its administrative infrastructure 

and will shortly start the implementation of an Integrated University Information System which 

will see the streamlined management of student records, finance, human resources, research 

projects, and facilities management amongst others. 


The training and process reengineering to adopt this System that will ensue across the 

University in the coming two to three years, will help the University to operate more efficiently 

and will enable the University to maximize the utility of its resources. 

In 2007, the University of Malta set up a Programme Validation Committee (PVC) to provide 

internal support and advice to the various Faculties, Institutes, and Centres with the 

formulation of new certificate, diploma, and degree programmes. It is intended that the PVC 

supported by the Academic Programmes Quality and Resources Unit (APQRU) extend their 

work to start appraising the curricula and course descriptions of all degree programmes 

ensuring that processes are in place to update course content from time to time to reflect 

developments in the respective fields or in response to the needs of industry and civil society. 

APQRU will also be instrumental in providing the necessary data for the University to 

determine and justify the resource requirements to maintain high-quality standards in the 

delivery of the respective teaching programmes. 

Moreover, during this year the University has launched an on-line student appraisal scheme 

on a pilot basis in order to receive feedback from students on the quality of delivery of the 

various study-units comprising their degree programme. It is intended that in the academic 

year 2008-09 this scheme will be extended to all programmes of the University to ensure that 

in three-year cycles, the University starts to get a comprehensive snapshot of its quality of 

delivery as seen through student eyes. These initiatives together with the existing appraisal 

of external examiners are intended to monitor and strengthen the teaching quality of the 

University. 

In a bid to increase international cooperation, to strengthen its teaching and research 

programmes, and to increase the number of foreign students, the University has also started 

to develop a portfolio of International Masters Programmes in joint venture with foreign 

counterparts of prestige. 

The first two international programmes are expected to be launched in September of 2009, 

with a further two launched in 2010. By 2015, the University plans to have launched 12 

International Masters Programmes in a range of disciplines that address contemporary topics 

ranging: sustainable environmental resources management, integrated marketing 

communication, conflict resolution, Mediterranean security, criminology and criminal justice, 

global governance and digital media amongst others. These Masters programmes will be 

housed at the Old University Building in Valletta as this is being appropriately refurbished and 

equipped. 

Given the growing demand for education and training in Medicine and Health Care, the 

University is currently designing a graduate-entry medical programme to complement its 

existing one which is aimed at school-leavers. Moreover, both the Medical School as well as 

the Institute of Health Care are in the process of forging strategic alliances with international 

schools of prestige with an eye to increasing their capacity and to project their brand better on 

the international scene. Such alliances are also seen as a way of ensuring that Malta 

continues to retain and attract doctors of the highest standards particularly in the wake of the 

continuous expansion in medical knowledge. 

In 2007, the University of Malta has set up a Faculty of Information and Communication 

Technology (ICT). The setting up of this new faculty necessitated the restructuring and 

expansion of the Faculty of Engineering. The teaching programmes of the Faculty of ICT as 

well as those of the Faculty of Engineering were recast and are still being refined to cater for 

the emerging and growing needs of industry. As stated earlier the growth of the ICT industry, 

particularly in view of SmartCity, requires a significant increase in the number of graduates in 

ICT. Within this context, the University of Malta has embarked on a project which will build a 

state-of-the-art facility not only to cater for a larger number of undergraduates, but equally 

important, to support a growing number of postgraduates and researchers in various areas of 

ICT. 


Apart from the Faculty of ICT, the University will also build an IT Services Centre which will 

provide ICT facilities to all students at the University irrespective of discipline. This centre will 

also allow the University to strengthen Malta’s node in the GÉANT network - a multi-gigabit 

pan-European data communications network, reserved specifically for research and 

education use. The University of Malta IT Services Centre is also creating the infrastructure 

for distance education platforms and has started to provide support for the development of 

on-line teaching programmes. 

As mentioned earlier, in the fourth quarter of 2008, the University will be setting up and 

upgrading a number of teaching and research laboratories. This includes the equipment for 

the setting up or upgrade of Materials and Testing laboratory; Chemistry and Biology 

laboratories; Analytical Chemistry laboratory; an Electromagnetic laboratory; a Biomedical 

Engineering laboratory: Biotechnology for Health Laboratories; Super Computer Cluster; 

Control Systems Laboratory; Climate Monitoring Equipment; Energy Conservation Laboratory; 

Mechanical Engineering Modelling Laboratory; and a Signal Processing Laboratory. 

In 2008, the University has started a pilot project to upgrade the facilities in the Library and to 

extend the library opening hours. The University will gradually refurbish its library with 

modern-day learning spaces and facilities, and it will be introducing new systems for more 

efficient library management. This exercise will also entail the provision of training to library 

staff with a view to ensure that library staff will take a more proactive role in supporting 

student’s learning. 

Research within the University of Malta 

In 2007, the University introduced a new system of appraisal and support for research 

projects particularly those which are funded by or involve third parties. This new system 

helps academics at the University with the financial, legal, and logistical support needed to 

ensure that the University is in a position to deliver the commitments required by the projects 

in question. The University intends to support staff and students for the registration of patents 

and the protection and exploitation of intellectual property. A newly established Research 

Support Unit is intended to develop the institutional research and innovation framework of the 

University and to monitor the quality of the research output being produced, with an eye to 

technology transfer to industry and commercial exploitation. 

The University has also started discussions with the Ministry for Gozo and is taking an active 

role in the formulation of the eco-Island strategy for Gozo. The feasibility of transforming the 

Government farm in Gozo into state-of-the-art research laboratories to support the 

development of suitable modern agricultural technologies, the preservation and enhancing of 

indigenous livestock and biodiversity, and the improvement of the quality and range of local 

produce, is currently being studied. 

Skills shortages and new occupational needs 

In the NRP of 2005-2008, one of the key objectives was to respond to new occupational 

needs, key competences and future skills requirements. Malta has managed to achieve 

significant progress within this area through the implementation of various measures which 

have been undertaken during the past years. Government is committed towards sustaining 

its efforts. Within this context Government has continued the implementation of the measures 

proposed within the NRP 2005-2008 and in addition has also embarked in a series of new 

measures which will be implemented during the second cycle of Malta’s NRP. These 

measures include: 

• the setting up of the National Qualifications Framework; 

• developing a Quality Assurance Framework for further and higher education; 

• increase investment in the educational sector with a view to make education more 

responsive to new areas of education; 


• Malta Government Scholarship Schemes 56 ; 

• Specific actions are being undertaken with a view to respond to skills required for the 

future. Examples of areas being addressed include ICT skills, research and innovation 

and health amongst others. 

Lifelong Learning 

Malta has registered marginal progress in lifelong learning. The rate of adults engaged in 

lifelong learning increased from 4.5% in 2000 to 6% in 2007 57 . This result is encouraging 

however Government needs to further invest and promote lifelong learning. 

Government’s strategy is to promote the importance of private investment and private 

consumption of education and training within the mainstream adult population. In addition, 

Government will also assist and provide training and retraining opportunities in priority areas 

in particular those related to the needs of the unemployed. 

Within this context, the University of Malta and MCAST provide a range of formal and informal 

training programmes on a part-time basis after regular hours, in a bid to extend access to 

higher education to those who are in employment. 

In addition, Government also intends to open schools after school hours with a view to 

transform these into community learning centres as stipulated by the amendments to the 

Education Act in 2006. 

Paradigm shift to a Developmental Model of Education 

Currently, the Maltese educational system is focusing at end of cycle examinations at primary, 

secondary and post-secondary levels. Several initiatives are taking place to ensure a 

paradigm shift to a developmental model whereby students’ needs, skills and potential are 

developed to the fullest. Such initiatives include: the transition from primary to secondary 

education, the curriculum review and the review of the local examination system at ages 16 

and 18. These initiatives are targeted to develop an inclusive system of education, to widen 

the education experiences of school age children and to certify a range of skills and levels 

wider than what is currently available. The current reforms will be implementing these 

changes gradually. 

eLearning Strategy – training the education workforce 

In December 2007, Government launched ”A Smart Learning Strategy”. The strategy focuses 

on three strands, namely: infrastructure in schools, teachers’ and students’ skills and 

resources. Within this context a number of actions will be pursued. These include: 

• the provision of laptops to all teachers in state schools by 2008; 

• raising the learner/computer ratio to 4:1 in all educational setups within the compulsory 

state school sector by 2009; 

• introduce high speed internet connectivity in all state schools by 2010; 

• the procurement of an eLearning platform; 

56 Since 2006 the Malta Government Scholarship Schemes (MGSS) sponsored 29 scholars to follow studies at a 

doctoral level and 55 at a Masters level. [Source (Policy Development and Policy Implementation Directorate 

Statistics, MEYE) 

57 

Life-long learning by gender - Percentage of the adult population aged 25 to 64 participating in education and 

training – EuroStat. Available online from: 

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=0&language=en&pcode=tsiem080 . 

[Abstracted on: 19 September 2008] 


• the Implementation of an on-going training in IT pedagogy programme for all teachers 

which has been initiated in 2008; 

• the provision of a range of additional ICT courses all teachers during the scholastic year 

and during the summer holidays. 

• an on-going evaluation of web-based teaching and learning resources will be initiated in 

2009 , in order to make available appropriate resources for primary and secondary 

schools. This strategy is aimed at improving pedagogies in schools; develop ICT and 

lifelong learning skills and widening access to educational experiences. 

In addition to the above, the University of Malta has been encouraging lecturing staff to 

transpose their teaching materials onto an open source eLearning platform and is currently 

working on a number of case-studies to accrue the necessary in-house experience. In 2007 a 

unit was set up within the IT Services Centre which is earmarked to grow to provide support 

and training to academics who wish to develop on-line courseware and distance learning 

teaching programmes. The IT Services Centre also provides the necessary videoconferencing 

infrastructure to support interactive classes between the University of Malta and 

its Gozo Centre, and through the GÉANT network. It supports collaboration between the 

University of Malta and international counterparts. 

Furthermore, the Institute of Tourism Studies has also invested heavily in the use and 

dissemination of adult education through e-learning, and is entrenching an e-learning culture 

within its students. ITS provides e-learning within an ICT environment for most of its postsecondary 

courses and a number of opportunities of collaborating with international partners 

in a number of EU projects. ICT has also been upgraded as one of the Institute’s entry 

requirements and the Diploma courses are designed within an e-learning framework. 


Conclusion 

In conclusion it must be said that Malta faces a number of challenges whilst also seeking to 

maintain and build on the progress it has achieved in a number of areas. The challenges that 

the world is facing in terms of the threats to competitiveness as a result of turbulent economic 

conditions has its repercussions on the Maltese Islands. Whilst fostering local manufacturing 

industry and moving towards an increased range of service provision, one cannot ignore the 

pressures that are being exerted on such sectors cannot be ignored. We need to respond 

and to do so in such a way that maintains, and improves, Malta’s attractiveness for foreign 

investors. 

Our competitiveness is inherently linked to local skills and abilities which in turn characterise 

the employability of individuals. Malta will ensure that it becomes a centre of excellence in 

the educational sector through wholesome investments at all levels – early years, the primary, 

secondary, further and higher education sectors. This is not enough however. Malta will 

foster lifelong learning with a view to strengthening the opportunities of those who may have 

fallen behind and to enable them to improve their re-integration prospects into the labour 

market. At the same time, there is strong commitment towards constant re-skilling and 

retraining with a view towards ensuring that the Maltese workforce will remain in synch with 

the developments of the labour market and economic opportunities that present themselves. 


Appendix: 01 - List of Measures

1.0 Investing in Sustainable Healthcare 

1.1 A new health care Act which will provide institutional reform, a modern legal basis as 

well as a framework for patient’s rights: - During the 2005 -2008 the Malta NRP 

highlighted the adoption of a new Health Care Act to replace the Department of Health 

Constitution Ordinance enabling legislative and institutional reform. The draft Act had 

been previously cleared through Cabinet’s Social Policy Subcommittee and a revised 

draft was submitted for vetting by the office of the Attorney General. The draft is 

currently being reviewed following changes introduced after the start of the new 

legislature in May 2008. 

1.2 Measures to strengthen primary and community care: Provide a series of measures to 

render services more accessible and responsive to patients’ needs by strengthening 

primary and community care services. 

1.3 Strategy and services to improve cancer care: Invest in modern infrastructure and 

equipment to enable an overall improvement in the quality of services provided for 

cancer prevention and treatment. Plans for the development of new cancer treatment 

facilities and for the procurement of new machines are underway. A strategy for cancer 

prevention, treatment and palliation is being finalised. 

1.4 Incremental measures to introduce an effective financial strategy accompanied by the 

implementation of appropriate operational and IT systems: This strategy intends to build 

appropriate structures and systems within the health care provider units. Information 

systems will be upgraded where necessary and rolled out where still not available in 

order to provide robust and reliable information for management. Such information will 

be collated in such a way as to comply with the data structure approved for health 

systems in the EU, namely the “System of Health Accounts". 

2.0 Create the right environment for growth and jobs 

2.1 Reduction in income tax through the further widening of the tax bands: Reduce income 

tax bands with a view to make work more attractive. 

2.2 Reduction of maximum rate of income tax from 35% to 25%: Reduce maximum income 

tax rate with a view to make work more attractive. 

2.3 Removal of airport departure tax: Remove the €23 departure tax which impacts all 

those who travel on business will be removed. 

3.0 Invest in research and innovation 

3.0 Strengthening research infrastructure at the University of Malta: Modernising the 

research infrastructure within the University of Malta with a view to contribute towards 

R&D. 

3.1 Bursaries for PhD students: Promote research and technology fields through the 

provision of bursaries for PhD research students. 

3.2 Increase investment in R&I through the implementation of Malta’s R&I programme: 

Significantly increase Government investment in Malta’s national R&I funding 

programme . 

3.3 Introduce schemes which focus on the promotion of R&D, Innovation and Growth : The 

schemes under the ME Act are focused on increasing private R&D expenditure, 

encouraging Innovation among enterprises and stimulating growth through the tapping 

of new markets. This will be undertaken through a number of incentives such as the 

EUREKA initiative together with the R&D grant schemes. Encouraging Innovation will 

take place through the implementation of a grant scheme which promotes product and 

process innovation together with eco–innovations. 


3.4 Manufacturing research projects: Three research projects are planned in relation to 

manufacturing research. These projects will involve industry-academia consortia 

working on common issues of relevance. 

3.5 State of the art ICT facility: Build a state-of-the-art facility to cater for a larger number of 

undergraduates, and to support a growing number of postgraduates and researchers in 

various areas of ICT. 

3.6 MGSS Postgraduate Scheme: to professionalise and build critical capacity in research 

and advanced education. 

3.7 Launch University of Malta Trust Fund. 

4.0 Pursue the fight against climate change 

4.1 Enhancing Malta’s capacity to mitigate and adapt to climate change: introduce a 

comprehensive national framework for climate change policy action in Malta, built on 

the results of scientific studies and assessment of international obligations and 

vulnerability of the country. As a result, a National Climate Change Strategy for Malta, 

disseminated nationwide and integrated in all major national policies, programmes and 

measures will be achieved. 

4.2 Promotion of Renewable Energy Sources in the Domestic & Commercial Sector : 

increase reliance on RES with the aim to diversify the fuel mix, reduce air pollution, 

reduce local dependence on polluting and costly fuel sources and ease economic 

burdens on domestic households and commercial enterprises. 

4.3 The introduction of tax incentives with a view to promote newer and cleaner commercial 

vehicles: businesses that make use of cleaner, newer and smaller vehicles will be taxed 

less than those which utilize older and less environmental friendly vehicles. Businesses 

thatopt to buy newer vehicles and vehicles that have cleaner technology will be charged 

less registration tax than older vehicles. Furthermore, the annual registration tax will 

vary according to the age of the vehicle, that is as the vehicle gets older, the annual 

circulation tax will increase. This is in line with the polluter pays principle. 

4.4 Reform in the Vehicle Registration Tax Regime: amend the motor vehicle registration 

tax and Annual Road Circulation tax to one based on the Polluter Pays Principle 

5.0 Better Regulation 

5.0 Strengthen the Better Regulation Unit: strengthen the Better Regulation Unit with a view 

to eliminate “red tape” whilst transforming services to business and citizens into “red 

carpet” treatment. 

5.1 Complete the current Action Plan for Simplification: Continue the implementation of the 

measures within the Action Plan for Simplification 

5.2 Carry out an intensive, sectoral based consultation to target the key pain points felt by 

businesses: Government believes that the next step is to take simplification to another 

level and consult with the various business sectors to obtain ‘on the ground’ feedback. 

A consultation plan has already been prepared by the BRU on this matter, which 

dissects the business community in a number of business sectors to facilitate the 

meetings. 

5.3 Put in place consultation guidelines and better practice for use within the public 

administration: build further on the consultation achievements to date by putting in place 

consultation guidelines and better practice for use within the public administration. 

5.4 Review the customer care systems within the public administration: implementation of a 

standardised customer care system in the wider public sector will possibly identify 

existing burdens on businesses and citizens. In particular recurring customer 

complaints can act as a source of further simplification. 


5.5 Carry out a review of the enforcement regime(s) : which will contribute to identify 

options to streamline enforcement, ensure synergies and better value-for-money, 

introduce more risk-based approaches and make certain that appropriate guidance is 

given to citizens and businesses. 

6.0 Intellectual Property 

6.1 Carry out pre-diagnostic visits to local firms: To increase IP awareness amongst the 

business community in order to SMEs are aware of any IP that they own with a view to 

protecting this if not already registered. Also to assist SMEs to use IP that may benefit 

their business such as by licensing rights or utlising patent information. 

6.2 Carry out training events and workshops and an information campaign in relation to 

Intellectual Property: with a view to increase knowledge of IP not only to SMEs but also 

to students, researchers and the public in general. 

6.3 Embark on a project for the digitisation of all national patent records thus offering a 

complete database of all national patents: Ensure that all national records are entered 

into a database so that searching on patent records is made easier and more 

accessible to interested parties. Through cooperation with the EPO, this database will 

also form part of a larger database of patents consisting of patent records from all over 

the world. 

6.4 On-line filing for patents as part of eGov services to the local citizens: Improve the 

accessibility of IP services accessible to any member of the Maltese public who wishes 

to apply for the registration of an IP right. 

6.5 Customise and implement other patent software tools such as the on-line filing 

(eOLF) module and the e-Phoenix module through continued technical assistance with 

the EPO. Provide further enhancements to services in the patent area, through the 

implementation of certain software tools in cooperation with the EPO. 

6.6 On-line filing for trademarks as part of eGov services to the local citizens. Improve the 

accessibility of IP services accessible to any member of the Maltese public who wishes 

to apply for the registration of an IP right. 

6.7 Implement a new trademark system which will facilitate processing of trademark 

applications and searching on national trademarks by interested parties. Improve the 

efficiency of the trademark by offering a better service to clients, not only with regards 

to the duration of a trademark registration but also with regards to the information and 

functionalities that will be available as a result of the new system. 

6.8 Accession of Malta to the Madrid Protocol for the International Registration of 

Trademarks which will facilitate application and registration of local trademarks in other 

countries even those outside of the EU. This measure will offer Maltese citizens the 

opportunity to apply for the registration of their trademark via one application, and using 

one procedure, in a number of countries even outside the EU. 

7.0 Services Directive 

7.1 Implementation of the Services Directive by 2009. 

8.0 Employment Rate 

8.1 Preventive & Active Labour Market Policies: Provide a series of active and preventive 

labour market measures such as training courses, traineeships, work exposure 

schemes, employment advice, guidance, etc, with a view to decrease unemployment. 


9.0 Addressing Groups at Risk 

9.1 Employment Aid Programme: The Employment Aid Programme contributes towards the 

integration of disadvantaged persons in the labour market. It facilitates access to 

employment through financial assistance and upgrades the skills of those furthest away 

from the labour market through work experience. 

9.2 Youth Employment Programme: The Youth Employment Programme is intended to 

increase the employability and labour market integration of young people, particularly 

early school-leavers (i.e. young people who do not pursue post-secondary education) 

but also those young people in precarious work who would benefit from further training 

as well as greater knowledge of their rights and responsibilities at work. 

9.3 Social Inclusion Partnership Programme: Provide training and employment 

opportunities to a number of target groups, namely socially excluded persons or 

persons with special needs. The scheme will enhance the participants’ capabilities in 

order to help them to integrate in the labour market. 

10.0 Gender Equality 

10.1 Gender Equality Programme: Devise actions which will encourage more women to 

remain in employment or return to the labour market. Hence, the general aim of this 

project is to inform and educate women and men with family responsibilities about 

gender equality and work and alternative job opportunities. 

11.0 Promote a culture of health and safety at work 

11.1 Increase educational programmes to instil a culture of health and safety at work for both 

employers and employees: Instil a culture of health and safety at work for both 

employers and employees by promoting self regulation and the implementation of 

occupational health and safety management systems at enterprise level. 

11.2 Improve the enforcement capabilities of the Occupational Health and Safety Authority: 

Launch of an administrative fines system and introduce a legislative review, so as to 

refocus scope and applicability of OHS Act and increase deterrent effect while 

facilitating self regulation. 

12.0 Entrepreneurship 

12.1 Set up a one-stop-shop for the licensing/registration of commercial activities: The onestop-shop 

will act as a single contact point to persons who want to set up business. 

12.2 The Employability Programme: will consist of a number of training initiatives aimed to 

assist jobseekers, the inactive, employees interested in upgrading their knowledge and 

skills and persons interested in starting a business. The initiatives will consist of basic 

skills, work orientation, re-training programmes, traineeships, a training subsidy scheme 

and a skills assessment system. 

13.0 Flexicurity 

13.1 Implement Malta's Flexicurity Roadmap. 

14.0 ICT 

14.1 Develop a robust ICT environment and Next Generation Infrastructure: Invest in the 

required ICT infrastructure through the provision of fiscal incentives for international sub 

marine cables and upgrade the networks to high speed broadband. 


14.2 Invest in a connected society : Invest in Malta's connectivity through the provision of : 

internet subsidy schemes, refurbished computer equipment for disadvantaged groups, 

fiscal measures to help buy computers, digital divide response team, the introduction of 

ICT related TV programmes, the setting up of the First Steps calls centre and 

Broadband/Wifi centres. 

14.3 Develop a smart work force with the necessary ICT skills: provide the necessary ICT 

skills to the local workforce through the necessary education and training. 

14.4 Enhance the quality of life of citizens through ICT: improve the quality of life of citizens 

through the introduction of a series of ICT measures which improve the quality of life of 

citizens. These measures include the promotion of digital libraries, the introduction of 

digital TV applications, a portal for Gozo, access to health information and a portable 

clinical record amongst others. 

14.5 Re-inventing government transformation and open government: Reinvent Government 

transformation through: the utilisation of e-government to trusted third parties, improve 

road safety, security and traffic congestion, introduce ICT in the streets, the introduction 

of GIS and mapping services, transport and travel portalisation, energy conservation IT 

programmes, promotion of ICT application in Gozo, the introduction of e-Courts system, 

anti-fraud programme amongst others. 

14.6 Taking care of e-businessthrough the development of an e-mall, set up a national e- 

commerce infrastructure, and a series of electronic market places. 

14.7 Developing Malta as a world leader in ICT: Embark into a series of measures with a 

view to develop Malta as a world leader in ICT. These measures include: the creation 

of ICT jobs, the establishment of a business park in Gozo, the creation of new blue chip 

VSA. 

14.8 University of Malta IT Services Centre. 

15.0 Invest in Malta’s Tourism Sector 

15.1 Upgrade Tourism Zones in St Paul’s Bay, Qawra, Pembroke: Provide a landscaped 

urban space, with seating and open sea views in three tourism zones. Additional 

facilities being provided are an aquarium, a marine archaeology museum, a diving 

institute and a Greek theatre in the Qawra project and a cycle track and Garigue 

heritage park in the Pembroke project. 

15.2 Developing Leaders for Change and Innovation in Tourism: Business Development and 

CPD for Tourism Senior Management: Developing Leaders for Change and Innovation 

in tourism is designed to up-skill and certify persons employed as or seeking 

employment in top, middle or supervisory management positions in sectors contributing 

directly or indirectly for tourism. The programmes are practical and result-focused and 

include mentoring as well as the possibility of an international field visit and 

benchmarking exercise in a best-in-class establishment overseas. Two studies to 

forecast employment levels and training needs are also included 

15.3 Improvements to the coastal areas, in Qawra and Sliema: Improvements to two coastal 

areas together with the formation of a sandy beach in the Qawra area. This will 

comprise improved and safe access to the area and into the sea, repair of deteriorated 

man-made sun bathing platforms, upgrading of other infrastructure including general 

landscaping and facilities for beach management. 

15.4 Master Plan for Cittadella Gozo: Develop a Master Plan for the Cittadella which will 

provide the guidelines to effectively and sustainably harness this valueable tourist 

attraction. In so doing, the historical aspect of the Cittadella will be safeguarded whilst 

promoting and developing its cultural and economic life. The Master Plan also aims to 

better present, protect and sustainably exploit this asset. 


15.5 Upgrading of Zewwieqa Waterfront: aims at rehabilitating the area known as Taz- 

Zewwieqa transforming it into a waterfront area by creating pedestrian zones, 

landscaped plazas including seating area with open sea views, an area hosting the 

restored Dghajsa tal-Latini and an informal stage structure. The project would upgrade 

another tourism zone in Gozo. 

16.0 Reforming the Transport Sector 

16.1 Reform Public Land Transport: The liberalisation of taxis, mini buses and coaches 

operating within the unscheduled market will render these sectors more efficient and 

competitive thus contributing towards increased demand and expansion. 

17.0 Invest in the Maltese educational system 

17.1 Promoting staff development: in education sector and postgraduate studies in science 

and technology 

18.0 Life Long Learning 

18.1 Training Aid Programme: The Training Aid Framework is intended to promote the 

concept of lifelong learning amongst employers (undertakings) by providing assistance 

through training grants which will be reimbursed on successful completion of training. 

This aid will be available to all non-public entities for both on the job and off the job 

training. 

18.2 MCAST scholarships: for staff continuous development programmes. 

19.0 Increase educational attainment and reduce early school leavers 

19.1 Valuing all skills for the labour market. 

19.2 Addressing skills mismatches in the aviation industry. 

19.3 Parents and teachers fusion ICT training programme. 

19.4 Launch 2 new evening programmes for adults addressing skills gaps in emerging 

growth sectors at MCAST. 

19.5 Launch 2 new evening programmes for adults addressing skills gaps in emerging 

growth sectors at UoM. 

19.6 Open, distance and e-learning strategies, tools and programmes by MCAST, ITS, and 

the University of Malta: Launch e-Learning strategy and schools implementation. 

19.7 Reform Education Act Cap 327 and publish regulations for the development of new 

licensing and quality assurance framework. 

19.8 Launch Quality Assurance Agency. 

19.9 Sustain Student Maintenance Grants. 

19.10 Malta Government Scholarships Schemes (MGSS) Undergraduate Scheme. 


20.0 Addressing growth and jobs in Gozo 

20.1 Employment Aid Programme. 

20.2 Upgrading of Operating Theatre & Setting Up of Radiology Unit. 

20.3 Solar Systems & Support Services Installations at Gozo General Hospital. 

20.4 Higher Education Courses to Address Skill Mismatches in Gozo. 

20.5 Training Courses to Enhance the Employability and Adaptability of the Workforce. 

20.6 The provision of hospitality courses. 

20.7 Training Aid Framework. 

20.8 Employability Programme 


Appendix: 02 – Flexicurity Measures

Objective No. 

Output 

September 2008 – December 2008 

1.1 Hold a national stakeholder conference on future skills needs 

1.4 Expand workplace learning through supporting employers to train their 

employees in both generic and specific skills through a revised Training Aid 

Framework open to all firms irrespective of size and sector 

2.10 Launch of an Employment Aid programme to provide a wage subsidy for a 

limited number of weeks to employers recruiting persons from certain 

disadvantaged groups 

4.11 Review the current employment-related enforcement structures with a view 

to a better-targeted, coordinated and effective framework 

Jan – June 2009 

4.4 Draw up an information brochure on the implications of holding multiple 

part-time jobs, and to distribute through the public employment service to 

those holding two or more part-time jobs 

4.5 Draw up an information brochure on one’s rights and obligations as a fixedterm 

employee 

2.8 Study the feasibility of extending the current legal provision allowing 

jobseekers to enter work experience schemes for up to twelve weeks 

without loss of benefits, to 26 weeks 

4.6 Consider introducing an incremental increase in the period that persons 

found working while registering, have to spend in declared employment 

before being able to register once more – from six months in the first 

instance, to twelve months for a second time, to eighteen months for a third, 

and so on 

4.7 Increase the penalty period for persons who fail to participate in an 

activation measure, without just cause for three or more times, from six 

months on Part 2 of the Register to twelve months on Part 2 of the Register 

2.3 Provide training courses targeted at women returners to the workplace, in 

personal and occupational skills and in areas of labour market shortage 

2.4 Launch occupational standards of competence and define the basis for their 

accreditation with a view to validating all forms of learning including nonformal 

and informal learning 

2.5 Strengthen the public employment service’s capacity to provide training in 


key competencies to adult learners which result in recognized certification 

2.13 Revise and extend training and support for jobseekers wishing to take up 

self-employment 

1.8 Define the conditions of entry of highly skilled third country labour and 

encourage the transfer of skills to Maltese understudies 

2.7 Launch a twelve-week Work Trial Scheme, to enable jobseekers and 

inactive persons to gain work experience and ease their transition into work 

4.9 Develop a proposal to increase the frequency of registration as a 

jobseeker’s duration of unemployment increases 

July 2009 – December 2009 

1.2 Report on the skills required in the seven priority areas of economic 

development and the implications for education and training 

3.1 Conduct a study of the take-up and impact of current family-friendly 

provisions, on both the employee and employer, including 

recommendations as to how current provisions may be amended or 

supplemented, following a study of good practices in other countries with 

similar economic and industrial profiles to Malta 

4.2 Design and launch an inter-departmental campaign on the benefits of 

declared work 

3.3 As part of a broader Palliative Care Strategy, to study the feasibility of a 

Palliative Care allowance, similar to the Carer’s Allowance, for employees 

granted unpaid leave by their employer to care for a terminally ill patient at 

home 

4.1 Produce a Quality Service Charter advising beneficiaries of their rights and 

obligations, and providing service targets whereby unemployed persons 

who start to work may be guaranteed a fast resumption of benefits in case 

of job loss 

4.10 Propose, in respect of a wider potential use of hand-held IT facilities by 

doctors, that only real-time medical certificates presented by jobseekers 

failing to attend an activation measure, are recognised 

1.7 Strengthen the potential of EURES Malta to attract more highly skilled EU 

nationals to Malta in areas of labour market shortage 

2.6 Launch a Youth Programme that provides jobsearch support, relevant 

training and labour market information and advice, to ease the school to 

work transition especially of lower-skilled youth. Particular effort will be 

made to reach youth who are neither in education nor in employment 

2.9 Conduct a feasibility study of a Job Rotation system whereby unemployed 

persons could be deployed to replace employees in training or on a familyfriendly 

measure, with guaranteed resumption of priority on the register and 

of a rapid return to benefits when the placement ends 

3.5 Explore the potential of utilizing school structures for after-school childcare 


January 2010 – June 2010 

4.8 Study the feasibility of more frequent means-testing of recipients of social 

assistance who register for work 

2.14 Explore the possibility of creating an ad hoc scheme for the self-employed 

in certain occupations where income is limited and irregular, but which 

occupations are socially necessary, thereby bringing such persons out of 

informal work and into the remit of social protection. Such occupations 

could include household workers such as cleaners and carers 

3.2 Study the feasibility of deducting childcare costs (up to a capped amount 

equivalent to the amount permitted for tax rebate purposes) from the 

reckonable income used to calculate entitlement to Children’s Allowance 

2.12 Design a Rehabilitation Pathway for those persons found ineligible for 

Invalidity Benefits but who still claim to be unable to work for health reasons 

July – Dec 2010 

4.3 Review the situation regarding bona fide self-employment and dependent 

self-employment 

3.4 Complete the preparation of a framework clearly outlining the obligations of 

both employer and employee in respect of telework in the private sector 

2.11 Conduct a comprehensive review of the ways in which various benefits 

combine, for various household combinations, in relation to work incentives 

regarding the minimum and the average wages. Bearing in mind the related 

objectives of poverty prevention and a balanced budget, this study would 

result in appropriate recommendations and regulatory proposals 

1.3 Conduct a skills audit of the working age population in Malta and Gozo, to 

identify the type and level of skills and qualifications available and how 

these skills are being utilised 

1.5 Support employees in micro-enterprises where workplace training is 

generally low, through a training grant available to the individual rather than 

to the firm 

1.6 Encourage the inclusion of lifelong learning opportunities in collective 

agreements 

2.1 Continue to strengthen the safety nets in both primary and secondary 

school to ensure that all young people leave school with key competencies 

2.2 Provide remedial training for young persons who leave school without 

qualifications

National reform programme 2008-2010 Malta - European Commission

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