1.    Executive Summary

Malta Employers is a prominent voice in Malta’s socio-economic landscape. It actively engages in discussions and initiatives concerning the nation’s evolving demographics and their implications for the labour market.

This report examines eight key activities organised by Malta Employers over the years and four ongoing activities, ranging from position papers and national symposia to parliamentary sessions and forums. It brings together these activities under the heading of the COMPASS initiative, explaining the various stages of this project and the core business activities impacted by it.

Furthermore, it outlines the overarching impact of Malta Employers work on the Maltese business environment, specifically focusing on workforce planning, skills development, and addressing the nation’s multifaceted demographic challenges. The findings indicate that the Malta Employers initiatives raise awareness, stimulate crucial dialogues, and influence policy considerations related to Malta’s demographic future and its interconnectedness with the business sector.

The report concludes by highlighting the effectiveness of Malta Employers engagement in creating a more resilient business environment capable of adapting to Malta’s changing demographic realities.

2.    Introduction to Malta Employers

Malta Employers stands as a leading voice in social dialogue within Malta, particularly concerning the significant demographic shifts the nation experiences and their profound implications for the labour market. Malta Employers core mission revolves around fostering a modern, pro-business climate characterised by unity among employers and optimal relations between employers and their employees and between individual employers. A crucial aspect of Malta Employers mandate involves actively influencing national policymaking and legislation concerning terms and conditions of employment, industrial relations, and social policy, all while safeguarding the legitimate interests of employers.

Malta’s business environment is significantly intertwined with its demographic composition. Demographic changes, such as declining birth rates, an ageing population, and evolving migration patterns, exert considerable pressure on the nation’s labour market and overall economic growth. These shifts necessitate careful consideration of workforce planning strategies, the imperative for continuous skills development, and proactive measures to address the broader demographic challenges that can impact the competitiveness of Maltese businesses. Given Malta’s limited natural resources, its sustained economic growth particularly depends on the quality and availability of its human resources.

In response to these critical demographic trends, Malta Employers have undertaken a series of initiatives over the course of the past years, forming part of the COMPASS initiative. The table below summarises the key demographic challenges facing Malta, their specific impacts on the business environment, and how the Malta Employers have responded to these challenges through targeted initiatives:

Demographic Challenge	Business Environment Impact	Malta Employers Response
Declining Birth Rates	Shrinking local talent pool, changing consumer demographics	Low Birth Rate Conference (2023), Policy recommendations for workforce planning
Ageing Population	Changing market needs, workforce gaps, and new sector opportunities	Ageing Population Round Table Forum (2024), promoting business innovation in senior-related sectors
Migration and Foreign Workers	Integration challenges, skills recognition, and administrative barriers	Identity Malta Project, National Conference on Foreign Workers in Logistics, streamlining recruitment processes
Infrastructure and Resource Strain	Property market distortions, congestion, operational obstacles	Position Paper “Malta’s Demographic Challenges,” policy recommendations addressing infrastructure limitations
Labour Market Rigidities	Skill mismatches, inefficient matching of labour supply/demand	National Symposium on Job Mobility and Skills Portability, validation of non-formal learning

 Table 1 – Demographic Challenges and Business Impacts

 

Having established Malta Employers role and the demographic challenges facing Malta, we now turn to the Malta Employers strategic response through the COMPASS initiative.

3.    Overview of the initiative

In response to the demographic challenges outlined in the previous section, Malta Employers developed the COMPASS initiative, a comprehensive, strategic approach to addressing Malta’s demographic challenges by improving the business environment and promoting the entrepreneurial spirit.

The following schematic illustrates how Malta Employers has systematically built a multi-faceted programme from 2017 to the present, creating a cohesive, long-term initiative that perfectly aligns with Category 1 of the National Supporting Business Awards: “Improving the business environment and promoting the entrepreneurial spirit.”

The following sections of this document will outline this project’s various phases and the activities that formed part of each phase.

The following timeline details how the COMPASS initiative has evolved since its inception, highlighting key milestones and activities.

3.1.   Timeline of Events

3.1.1.     Foundation Phase (prior 2019)

The initiative began with the National Symposium on Job Mobility and Skills Portability in November 2017, which served as a critical launchpad. This symposium brought together key stakeholders, including employers, unions (represented by FOR.U.M Unions Maltin), government officials, and educational institutions to identify barriers in the business environment created by demographic challenges.

During this event, Malta Employers identified several critical business environment constraints hindering growth and entrepreneurship in the face of demographic shifts. The symposium addressed how rigid administrative processes for accessing foreign talent limited business expansion and created artificial barriers to market entry and growth. Business leaders across various sectors reported excessive permit processing times, duplicative documentation requirements, and unpredictable administrative outcomes, making workforce planning nearly impossible.

Before the symposium, Malta Employers had published its influential Position Paper “Malta’s Demographic Challenges“, identifying critical demographic shifts affecting Malta’s business environment. The symposium provided a platform for stakeholders to engage with the paper’s findings, resulting in widespread acknowledgement and consensus on the importance of addressing these demographic challenges. This forward-thinking document provided early warning of demographic barriers to growth and proposed concrete policy recommendations to improve the business climate. The paper specifically highlighted how demographic constraints affected key business environment factors:

• Property market distortions – Rising costs of commercial space and housing for workers due to population changes
• Infrastructure limitations – increasing congestion and utility strain, creating business operation obstacles
• Labour market rigidities – Administrative barriers preventing efficient matching of labour supply and demand
• Regulatory frameworks – Outdated rules not designed for a demographically changing business landscape

These insights from the symposium and position paper informed the initial business environment focus of the COMPASS initiative, which centred on:

• Identifying demographic risks that could hinder business growth
• Analysing barriers to employment and economic growth in a tight labour market
• Conducting comprehensive labour market analysis
• Developing initial policy recommendations to stimulate entrepreneurship
• Documenting the financial and administrative burden imposed by existing processes
• Measuring the opportunity costs of delays in workforce acquisition
• Identifying regulatory inconsistencies across different government agencies.

The position paper highlighted how businesses were spending significant time on administrative processes related to workforce acquisition, potentially creating a competitive disadvantage compared to European counterparts. It also addressed how rigid, outdated administrative processes were particularly challenging for SMEs, who often lack dedicated resources to navigate complex bureaucracy.

These early efforts were crucial for raising awareness of how demographic challenges were creating impediments in the business environment that would require entrepreneurial solutions.

The impact of this foundational work was immediate and significant. Within weeks of the National Symposium, the Minister for Education announced that Malta Employers position paper had been presented to a Cabinet meeting, elevating demographic challenges to the national agenda. This high-level government engagement demonstrated the resonance of Malta Employers approach with policymakers. The symposium also initiated important cross-sectoral work, including early development of protocols for cross-cultural skills assessment and validation. It established ongoing cooperation between employers, unions (particularly FOR.U.M), government agencies, and educational institutions. This multi-stakeholder collaboration would prove crucial for the initiative’s long-term success.

3.1.2.     Expansion Phase (2019)

Building on this foundation, Malta Employers organised the SME National Forum in 2019, which featured three specialised symposiums:

1. Sustainable Employment through Education
2. Employment in a Fast-changing Demographics Scenario
3. Employment Strategy and Its Ripple Effect on the Economy

This forum expanded the focus to address how demographic shifts were affecting the business environment for SMEs. The workshops identified bureaucratic obstacles and regulatory burdens limiting entrepreneurial responses to demographic challenges.

The business environment focus evolved to include:

• Examining administrative processes affecting business operations
• Identifying cross-sector cooperation opportunities to improve market conditions
• Proposing entrepreneurial responses to demographic challenges
• Developing more favourable conditions for business adaptation

3.1.3.     Implementation Phase (2022)

By 2022, the initiative entered an implementation phase:

1. “Ensuring Skills for Future Competitiveness” National Conference – This event focused on removing obstacles to workforce development caused by demographic shifts and addressed administrative barriers to accessing foreign workers, a critical response to demographic shortages.
2. Identity Malta Project – This groundbreaking collaboration created practical flowcharts and process improvements to simplify foreign worker recruitment, directly improving the business environment by reducing administrative burden and red tape.

The business environment focus, during this phase became more practical and implementation-oriented:

• Administrative simplification for workforce recruitment
• Improving access to foreign workers
• Process streamlining for business operations
• Reducing red tape in government procedures
• Formalization and expansion of skills validation frameworks

This phase demonstrated how Malta Employers was actively working to remove barriers in the business environment that were hindering entrepreneurial responses to demographic challenges.

3.1.4.     Deepening Phase (2023-2024)

As the initiative matured, it focused on creating new entrepreneurial opportunities within demographic challenges:

1. “Low Birth Rate” Conference (2023)—This conference examined how demographic shifts created new business opportunities and markets. It identified emerging sectors and niches entrepreneurs could target and highlighted regulatory barriers that needed to be addressed to allow these opportunities to flourish.
2. “National Conference—Foreign Workers in the Logistics Industry (2023)”—The conference specifically focused on integrating foreign workers into the Maltese labour market and addressing challenges within the logistics sector. It aimed to provide a platform for discussions and solutions regarding the employment of foreign workers, particularly in the logistics sector, and to promote actions, change, and future planning.
3. “Ageing Population” Round Table Forum (2024)—This forum addressed the business potential within an ageing population, promoting entrepreneurial responses to demographic change. The forum identified specific regulatory reforms to facilitate business innovation in senior care, healthcare technology, accessible housing, and other growing sectors.

The business environment focus during this phase advanced to:

• Identifying innovation opportunities within demographic challenges
• Developing new business opportunities in changing demographic markets
• Adapting policies to support entrepreneurial responses
• Exploring market expansion possibilities within demographic niches
• Proposing regulatory frameworks that encourage rather than inhibit innovation
• Developing incentive structures for entrepreneurial responses to demographic challenges
• Creating sandboxes for testing new business models under modified regulatory conditions
• Establishing public-private partnerships to address market gaps

These actions demonstrate how the Malta Employers moved beyond merely addressing obstacles to actively promoting entrepreneurial spirit in response to demographic challenges.

The benefits for the business environment and the business community are explained in the following sections.

3.1.5.     Ongoing Mechanisms

Throughout the initiative’s lifecycle, Malta Employers maintains several ongoing mechanisms to ensure continuous improvement of the business environment:

1. Continuous Consultation Process – Regular engagement with stakeholders to identify evolving business obstacles
2. Employment Law Courses – Training on regulatory requirements, reducing compliance costs
3. One-to-one meetings with SMEs – Personalised support for entrepreneurs facing demographic challenges
4. MEA TV Programmes – Promotion of entrepreneurial culture through public awareness.

These ongoing activities focus on:

• Building regulatory awareness to reduce compliance costs
• Sharing business information to improve market functioning
• Facilitating public-private dialogue to improve the business climate
• Promoting entrepreneurial culture in response to demographic challenges
• Maintaining and strengthening multi-stakeholder collaboration

The chronological activities described above have systematically addressed six interconnected areas of business environment improvement, which are detailed below.

4.    Core Business Environment & Entrepreneurship Categories Developed

The initiative systematically addresses six interconnected areas of business environment improvement, all of which directly align with Category 1 requirements as per guidelines related to the National Supporting Business Awards 2025:

4.1.   Regulatory Environment

Malta Employers actively shapes the regulatory environment to respond more effectively to demographic shifts. This includes:

• Administrative Burden and Regulatory Streamlining: Malta Employers advocates for and contributes to reducing administrative complexities and procedural inefficiencies that impact businesses’ time, energy, and convenience, recognising that navigating demographic change requires agile regulatory frameworks.
• Streamlined Processes for Foreign Worker Recruitment: A key focus is streamlining processes to enable businesses to recruit foreign workers efficiently and address labour shortages and skills gaps. The Identità flowchart initiative exemplifies this approach.
• Rationalisation of Government-Induced Costs: Malta Employers consistently champions the review and optimisation of government-imposed financial obligations, recognising that unnecessary monetary burdens can impede business adaptation, innovation, and growth in response to demographic challenges.

4.2.  Policy Development

Malta Employers plays a vital role in shaping policy development related to demographic change and its impact on the business environment:

• Forward-Looking Demographic Policy Recommendations: Malta Employers provides forward-looking policy recommendations to ensure that Malta’s policies are aligned with evolving demographic realities.
• Labour Market Interventions: Malta Employers advocates for strategic labour market interventions to improve the business environment, addressing skills mismatches and workforce shortages.
• Strategic Planning Frameworks: Malta Employers contributes to developing strategic planning frameworks that help businesses, and the government adapt to demographic change.

4.3.   Entrepreneurial Culture

Malta Employers actively fosters an entrepreneurial culture that embraces the challenges and opportunities presented by demographic shifts:

• Raising Awareness of Demographic Opportunities: Malta Employers raises awareness of the new business opportunities that emerge from demographic change, encouraging entrepreneurs to explore new markets and solutions.
• Promoting an Innovation Mindset: Malta Employers promotes an innovation mindset, encouraging businesses to develop new products, services, and processes to meet the needs of a changing population.
• Encouraging Risk-Taking and Adaptation: Malta Employers fosters a culture that encourages risk-taking and adaptation, recognising that businesses must be agile to succeed in a dynamic demographic landscape.

4.4.   Market Access

Malta Employers works to improve market access for businesses in the context of demographic change:

• Improving Access to Labour Market Information: Malta Employers facilitates improved access to labour market information, providing businesses with the data they need to make informed decisions about workforce planning and recruitment.
• Streamlining Foreign Worker Recruitment Channels: As mentioned earlier, Malta Employers actively works to streamline foreign worker recruitment channels, making it easier for businesses to access international talent.
• Providing Demographic Market Data: Malta Employers provides businesses with demographic market data to support their strategic planning and help them identify new opportunities.
• Validation of Non-Formal Learning: Malta Employers supports the validation of non-formal learning, expanding the available talent pool and recognising the skills of individuals who may not have traditional qualifications.

4.5.   Business Support Structures

Malta Employers strengthens business support structures to help businesses navigate demographic challenges:

• Facilitating Cross-Sector Cooperation: Malta Employers facilitates cooperation between different sectors, enabling businesses to share knowledge and resources.
• Strengthening Public-Private Dialogue: Malta Employers fosters strong public-private dialogue, ensuring that policymakers hear businesses’ needs.
• Developing Information-Sharing Networks: Malta Employers develops information-sharing networks, informing businesses about the latest demographic trends and best practices.

4.6.   New Business Models

Malta Employers promotes the development and adoption of new business models that are adapted to demographic change:

• Promoting Demographic-Adapted Business Strategies: Malta Employers encourages businesses to develop strategies tailored to demographic shifts’ specific challenges and opportunities.
• Supporting Innovative Recruitment Approaches: Malta Employers supports adopting innovative recruitment approaches to attract and retain talent in a competitive labour market.
• Developing Adaptable Workforce Models: Malta Employers promotes the development of adaptable workforce models that can respond to changing demographic realities, such as flexible work arrangements and lifelong learning opportunities.

The six business environment categories detailed above are directly linked to specific COMPASS activities. The following table summarises these connections and their resulting outcomes:

Business Environment Category	Related COMPASS Activities	Outcomes
Regulatory Environment	Identity Malta Project (2022), Position Paper “Malta’s Demographic Challenges” (2017)	Streamlined processes for foreign worker recruitment, reduced administrative burden, elimination of red tape
Policy Development	National Symposium (2017), “Ensuring Skills for Future Competitiveness” Conference (2022)	Forward-looking demographic policy recommendations, labour market interventions, strategic planning frameworks
Entrepreneurial Culture	Low Birth Rate Conference (2023), “Ageing Population” Forum (2024), MEA TV Programmes	Awareness of demographic opportunities, innovation mindset, encouragement of risk-taking and adaptation
Market Access	SME National Forum (2019), “Foreign Workers in the Logistics Industry” Conference (2023)	Improved labour market information, streamlined recruitment channels, demographic market data, and validation of non-formal learning and skills
Business Support Structures	Continuous Consultation Process, One-to-one meetings with SMEs, Employment Law Courses	Cross-sector cooperation, strengthened public-private dialogue, information-sharing networks.
New Business Models	Ageing Population Round Table Forum (2024), “Low Birth Rate” Conference (2023)	Demographic-adapted business strategies, innovative recruitment approaches, adaptable workforce models

Table 2 – Business Environment Categories and Related COMPASS Activities

 

This integration illustrates how Malta Employers strategic approach systematically addresses Malta’s demographic challenges through a comprehensive focus on improving the business environment and promoting entrepreneurial spirit.

5.    Results obtained through the project

Demographic Challenge	Results/Policy Response	Quantifiable Impact
Declining Birth Rates and Ageing Population	Voluntary Post-Retirement Employment Scheme. The government adopted Malta Employers recommendation to allow voluntary post-retirement employment. This measure helps address workforce shortages linked to Malta’s ageing population.   National Strategic Policy for Active Ageing: Malta 2021-2027: This policy, launched after 2017, builds upon Malta’s history of prioritising ageing policy. It aims to enable the expanding older population to remain healthy, stay in employment longer, and participate actively in society. This was also primarily influenced by the narrative adopted by Malta Employers since 2017.   Increased Children’s Allowance (Budget 2025): The 2025 National Budget included an increase in children’s allowances, providing an additional €250 per child annually to benefit approximately 10,500 families. This ties in with the significant push towards incentivising families to have larger families, as advocated by the Malta Employers.   Adjusted Birth and Adoption Bonuses (Budget 2025): Birth and adoption bonuses were increased to €500 for the first child, €1,000 for the second, and €1,500 for the third and subsequent children.   New Tax Rate for Parents with Multiple Children (Proposed 2025): Finance Minister Clyde Caruana proposed creating a new tax rate specifically for families with two or more children to provide significant annual tax relief as an incentive. The specifics and implementation of this proposal are still under discussion.	Out of approximately 135,000 people aged 60+ in Malta (2023), an estimated 20,250 older workers could benefit from post-retirement employment.                                     Malta recorded approximately 4,600 births in 2023, with these families eligible for birth bonuses (€500 for 1st child, €1,000 for 2nd, €1,500 for 3rd+); 10,500 families receiving an additional €250 per child annually through the increased children’s allowance.                       From an estimated 45,000 families with children in Malta (2023), several thousand with multiple children will benefit from the proposed new tax rate.
Migration and Foreign Workers	New Labour Migration Policy (2023-2025) – Malta Employers were a key stakeholder in developing Malta’s new labour migration policy. The association’s recommendations for streamlining work permits for third-country nationals (TCNs) and improving migrant integration were reflected in the official policy consultation launched in 2025. Malta Employers advocacy has helped shape policy principles on aligning migration with labour market needs.	There were approximately 84,000 foreign workers in Malta (2023), representing about 30% of the total workforce of 280,000. Many of these workers are third-country nationals directly impacted by the new migration policy.
Infrastructure and Resource Strain	Malta Employers have consistently highlighted the strain on Malta’s infrastructure due to rapid economic and population growth, calling for a shift from quantity-driven to quality-driven economic models. Their advocacy has contributed to the government’s increased focus on infrastructure investment and sustainability in national strategies, such as Malta Vision 2050, which now prioritises infrastructure resilience and sustainable development.	Nationwide impact benefiting all 542,000 residents (2023 population) through improved infrastructure and sustainable development.   Particularly relevant for urban areas where over 95% of the population resides
Labour Market Rigidities	Malta Employers’ advocacy for flexible work arrangements, job sharing, and telecommuting has influenced both business practices and government policy. The association’s initiatives have helped normalise flexible work and post-retirement employment, and their training programmes have supported SMEs in adapting to a more dynamic labour market.   National Skills Council (NSC): Established in 2019, the NSC is crucial in aligning skills development with labour market needs. It aims to create a more transparent and standardised system for recognising skills acquired both formally and informally, which benefits foreign workers seeking to have their qualifications acknowledged in Malta. This council was established as a direct follow-up to the action of the Malta Employers.   Training and Support: Malta Employers training programmes have equipped SMEs to implement flexible work practices and manage diverse workforces, enhancing labour market responsiveness and inclusivity.	From Malta’s workforce of approximately 280,000 (2023), an estimated 70,000-84,000 employees (25-30%) are experiencing improved work-life balance through flexible work arrangements.           Enhanced skills recognition through the NSC, benefiting both local and foreign workers.

 

Agenda Setting: Malta Employers proved highly effective in raising the national profile of complex, long-term issues. Its conferences and position papers on demographic challenges (low birth rate, ageing workforce) significantly shaped the national discourse, bringing these topics to policy attention. Similarly, it played a role in highlighting the potential impacts of specific external policies, such as the EU Emissions Trading System for shipping, prompting discussion at the MCESD level.

Policy Consultation and Refinement: Malta Employers consistently engaged in formal consultation processes for major government policies, notably the Labour Migration Policy. By providing detailed, evidence-based feedback reflecting employer perspectives, Malta Employers likely influenced the practical implementation details and fine-tuning of regulations, aiming to ensure workability and mitigate potential negative impacts on businesses.

Representing Employer Concerns: Across all four areas, Malta Employers served as a crucial voice articulating the specific challenges, costs, operational needs, and perspectives of the employer community regarding government policies, market dynamics, and regulatory burdens.

5.1.   Number of sectors directly impacted

Directly affected sector	How It Was Affected by COMPASS
Logistics	Addressed in the 2023 “National Conference – Foreign Workers in the Logistics Industry”, focusing on integrating foreign workers and streamlining recruitment processes.
Healthcare/Senior Care	Targeted in the 2024 “Ageing Population” Round Table Forum, identifying business opportunities and regulatory reforms to facilitate innovation in senior care
Education	Addressed in the “Sustainable Employment through Education” symposium as part of the SME National Forum, linking education to demographic workforce needs.
Tourism	Impacted through broader economic discussions on foreign workers and changing demographics affecting the service industry workforce availability.
Construction/Property	Affected by Malta Employers position on “property market distortions” and “infrastructure limitations” caused by demographic shifts.
Healthcare Technology	Identified as a growth area in the “Ageing Population” forum, promoting entrepreneurial responses to demographic change.
SMEs (across industries)	Specifically targeted through the SME National Forum and ongoing one-to-one meetings, addressing how demographic shifts affect small business operations.
Accessible Housing	Highlighted as an entrepreneurial opportunity in response to the ageing population’s needs.

5.2.   Number of Ministries influenced by COMPASS

Ministry	Collaboration Area with COMPASS Initiative
Ministry for The Economy, Enterprise and Strategic Projects	Overarching economic policies related to demographic challenges, entrepreneurship promotion, and business environment improvements
Ministry for Finance and Employment	Employment-related initiatives, labour market interventions, National Symposium on Job Mobility
Ministry for Home Affairs, Security, Reforms and Equality	Identity Malta (Identita) Project (2022) for streamlining foreign worker recruitment processes
Ministry for Education, Sport, Youth, Research and Innovation	Sustainable Employment through Education symposium; skills development initiatives
Ministry for Social Policy and Children’s Rights	Social policy aspects related to demographic shifts, ageing population concerns, and workforce planning
Ministry for Foreign and European Affairs and Trade	Foreign worker integration, international recruitment channels, market access improvements
Ministry for Transport, Infrastructure and Public Works	Infrastructure planning related to demographic shifts and workforce mobility
Ministry for Tourism	Tourism workforce planning in the context of demographic changes and foreign worker integration.

 

5.1.   Results Dashboard

 

Reference:
Electronic update

Position Paper published by the Malta Employers

References:

Brochure of the event
Electronic update publication

References:

July 2022 – Parliament Stakeholders’ Session – introductory video

2022 – Parliament Session: FORUM NAZZJONALI TAN-NEGOZJI ŻGĦAR 2022

November 2022 SMEWeek – Theme Video

2022 – SMEWeek – 4 minute – Post Event Video

November 2022 SMEWeek – Whole event – part 01

November 2022 SMEWeek – Whole event – part 02

Background Dossier: Compass 2022 – Ensuring the Skills for Future Competitiveness

Publication: 2022 – Ensuring Skills

Electronic update: ENSURING SKILLS UPDATE

5-step-flowchart, which explains and guide an employer during a TCN job engagement process

 

References:

13^th July 2023 Parliament session on low birth rate – whole session link

13^th July 2023 – low birth rate – theme video

Publication:

Maltese version / English version

References:

31^st October 2023 Foreign Workers in the Logistics Industry – Addressing HR Challenges Whole fb live stream

31^st October 2023 Foreign Workers in the Logistics Industry – Addressing HR Challenges Promo

31^st October 2023 Foreign Workers in the Logistics Industry – Addressing HR Challenges Theme video

31^st October 2023 Foreign Workers in the Logistics Industry – Addressing HR Challenges Post-event video

Publication digital link

References

Event: Adapting Our Labour Market to an Ageing Population – SMEs National Round Table Forum
Date: 9th October 2024
Live Stream Recordings:

• Part 1: Watch here

• Part 2: Watch here

• Part 3: Watch here

Additional Materials:

• Promotional Video: Watch here

• Theme Video: SME WEEK 2024 Theme Video

• Post-Event Highlights: Watch here

Publication:

• Digital Version: Final web version – SME Week 2024 Publication (PDF)

Reference:
For information on available courses, please visit our webpage

Participation Statistics:

It is estimated that, MEA TV, as part of this COMPASS initiative, in the last seven years contributed with over than 180 minutes of business knowledge, entrepreneurship guidance, and business support related to existential Demographic shift.

2018 – Programme 12 – Malta’s Demographic Challenges

2019 – Programme   9 – Shortage of Workers in Malta

2019 – Programme 22 – More elderly population

2022 – Programme   4 – In-Nuqqas ta’ Ħiliet

2023 – Programme   8 – Birth Rate

2024 – Programme   7 – Employment after Retirement

Dr. Anglu Farrugia

Hon. Dr. Paula Mifsud Bonnici

Hon. Dr. Malcolm Paul Agius Galea

Citations from Third-Party Stakeholders And other articles reported by the Media

Malta Employers’ work under the COMPASS initiative has been cited or acknowledged numerous times by prominent external stakeholders, demonstrating its national impact.

Below are key examples of Malta Employers’ influence being recognised by government officials, unions, and other organizations:

Speaker of Parliament (Anġlu Farrugia) – On 13 July 2023, Speaker Farrugia opened a national conference (co-organised with Malta Employers) on Malta’s low birth rate, explicitly crediting the Malta Employers’ Association as a partner. In his speech, he praised the MEA for raising an “existential challenge” for Malta and bringing diverse stakeholders together in Parliament to debate solutions.

​https://www.gov.mt/en/Government/DOI/Press%20Releases/Pages/2023/07/13/pr231109.aspx

President of Malta (George Vella) – On 14 March 2023, the President welcomed Malta Employers delegation to San Anton Palace, where they presented him with the “Ensuring Skills for Future Competitiveness” report – a compilation of COMPASS efforts and recommendations.​ By receiving the first copy of this publication, the President formally acknowledged Malta Employers’ work. He commended the association’s research and its 13 policy recommendations on skills and labour market needs, underscoring their relevance to Malta’s future​.

https://businessnow.mt/malta-employers-association-discusses-skills-and-competitiveness-with-president-george-vella/

Trade Unions have echoed and reinforced Malta Employers’ proposals, showing cross-sector buy-in. In March 2022, the General Workers’ Union (GWU) joined Malta Employers in urging government to allow flexible early retirement options. Both unions supported the Malta Employers’ long-advocated idea that those taking an early pension at 61–64 should be allowed to keep working (with a partial pension), instead of the rigid “stop working or lose pension” rule​. The unions publicly concurred with Malta Employers that such a “flexi-retirement” scheme would benefit the economy and retirees – a rare instance of employers and unions aligning on policy.

https://www.maltatoday.com.mt/news/election-2022/115877/chamber_gwu_want_flexiemployment_for_retirees_who_want_to_work_after_65

Ministry for Home Affairs & Employment (Government): The Maltese government directly engaged with Malta Employers on labour migration reform. For example, on 13 Nov 2024, Minister Byron Camilleri (Home Affairs and Employment) held consultations with Malta Employers’ leadership specifically on the new Labour Migration Policy​.

The Ministry’s decision to seek Malta Employers’ feedback – and later incorporate several employer-centric measures (faster work permit processing, skills-matching programs, etc.) – indicates that Malta Employers’ expertise was formally recognized in policy-making. (Indeed, the official policy document notes it “builds on recommendations” from social partners in the National Employment Policy​.

https://www.facebook.com/photo.php?fbid=1064357141728604&id=100044629832192&set=a.400970701400588

https://www.maltatoday.com.mt/news/national/133060/malta_labour_migration_policy_principles_discussed_with_mcesd

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‘Lower birth rates led to necessity to resort to private pensions’ – social security department chief

By

The Malta Business Weekly

 –

Thursday, 30 June, 2022 at 9:00 am

Grazio Barbara, Director General of the Social Security Department

‘The EU and every government must intervene to regulate anything connected to abuse within the workplace’

It has become necessary for people to resort to private pensions from a young age due to the lower birth rate, Grazio Barbara, director general of the Social Security Department said.

Pensions and social benefits have gone through significant changes over the years, with the Social Security Department striving to discuss and put forth policies which can be sustainably put into practice for the benefit of most citizens.

The Malta Independent on Sunday spoke with Barbara regarding social benefits for the self-employed, as well as the issue of sustainable pension schemes which have proven to become an increasing problem for countries due to a lower birth rate. Barbara took part in a conference organised by the Malta Federation of Professional Associations which dealt with issues faced by the self-employed.

Barbara was asked about future pensions and their sustainability, to which he replied that this has become a problem in several countries due to the current low birth rate.

“It has become difficult for the birth rate to increase to how it used to be, reason being that having children has been postponed by at least 10 years. Whereas before, women decided to have children in their 20s, nowadays it has been postponed till their 30s. This will impact the future pensions of these children,” Barbara said.

Barbara said that the country’s economy must continue to grow by increasing jobs and having enough workers to contribute their social security contributions, which will then benefit future pensions. He said that nowadays, according to statistics, one fourth of the labour force in Malta is made up of foreign workers as there are not enough Maltese people for the jobs available.

“It is an advantage that foreigners come here to work and pay social security contributions as they tend to not spend a long period of time living and working in Malta. It benefits the pension scheme as they are contributing to the pensions but do not stay long enough in Malta to gather at least the minimum social contributions,” Barbara said.

Barbara also said that government has been encouraging private pension schemes, as well as giving incentives on tax credits to attract more people towards private pensions.

“State pensions will not be enough for future pensions as there are not enough people to contribute to social security contributions. It would be ideal for a person to resort to private pension schemes from a young age to ensure they do not have a large amount of money in arrears to pay,” Barbara said.

Barbara was asked whether there are additional social benefits alongside the pension, to which he replied in the affirmative, saying that the Maltese law provides two important pillars; one which is contributory and one which is non-contributory.

“A person can receive additional benefits which are non-contributory but are means tested, to increase their income in addition to their pension. Such an example is the supplementary allowance which has brackets of how much a person can be paid,” Barbara said.

He said that pensioners who have a chronic condition may apply for medical aid where it entails that they pass from a medical panel and start receiving an additional allowance, which would cover any extra medicine without having to take away from their pension.

Barbara spoke about self-employed persons, defined in legal notice number 44 of 2012 issued under the Employment and Relations Act (Cap. 452) as a worker who meets five of eight pre-established criteria. The self-employed has certain benefits of choosing their work hours as well as pay rates, while the employed person is subject to certain rules within a workplace.

The world of work has changed significantly on a global level. Asked if he would define this as progress, and should the European Union legislate to stop certain developments, Barbara said that the EU, as well as any government, must focus on stopping abuses within the working world.

“The EU and every government must intervene to regulate anything connected to abuse within the workplace, with regards to pay, hours and conditions,” Barbara said. He said that the social security department is doing its utmost with the social benefits it issues, and more can be done.

“One would want to do more with regards to benefits, but we must hold back as if you do not impose certain restrictions, there will be more abuses,” Barbara said. He added that if a new type of benefit is to be established, one must foresee its consequences and try to limit abuses as much as possible, as they cannot be totally eradicated.

Asked if he sees additional risks which have arisen with the development of platform work and the gig economy, Barbara reiterated that unfortunately abuses remain and will continue with new types of jobs. He said that abuses are done at a quicker pace than it takes for the legislator to be made aware of these abuses.

“Abuses are usually highlighted once they are reported, if they are not reported it is difficult to notice, and certain preventative actions cannot be taken,” Barbara said.

He mentioned as an example a group of drivers who have been facing bad conditions of work. He said that they have been branded as self-employed rather than employees so that the employer can avoid paying for their social security contributions and strip them of sick leave entitlement. Moreover, in cases where these people are injured, the employer holds no responsibility. This is the type of abuse some suffer, he said.

Self-employed persons can benefit from social benefits when they stop work to raise children, Barbara said, adding that such a person can benefit from Child Credits. This means that if a person had children and has stopped working to raise them, once it is time for that person to receive a pension, child credits will be awarded to cover for the time they “lost”.

“We must make a distinction between those who were born before 1962 and those who were born after. Those born before receive two years per child and those born after can have four years per child. The period can go up to six years after the birth of the child,” Barbara said.

He said that a person cannot spend 10 years without working and be covered for the entire period, but at least, a part of it can be covered.

Barbara said that there is the facility that those aged 59 years and over can ask to pay for their missing social contributions in arrears, provided that they have not received a pension and are in employment.

Asked about a possible increase in the invalidity pension rates, which is given to persons who are not of retirement age and have to be medically boarded out of work due to an illness or injury, Barbara said that this is a fixed rate pension, as it is not income related as that of the retirement pension.

Barbara said that the number of people who are medically boarded out has been decreasing since the system was changed from people physically appearing before a medical panel to the current one where documentation of the case is being viewed and either an invalidity pension is recommended or rejected by a medical doctor.

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One third of people in Malta will be over 65 by 2050

Tuesday, 3 December 2024

One in five people in Malta are aged 65 or older and by 2050, that number will rise to one in three, according to estimates by the United Nation’s population unit.

This would mark a 50% increase between 2024 and 2025, or in real terms, from 108,000 people to 163,000 people aged 65 or older.

These figures were highlighted by the chief of the population unit Lisa Warth, at a conference organised in Malta by the International Institute on Ageing United Nations – Malta (INIA) and Healthmark.

The conference, held on 28 November at Salini Resort in St Paul’s Bay, brought together more than 150 local and international experts to discuss the emerging challenges and opportunities associated with Malta’s rapid population ageing.

Warth discussed various global initiatives which Malta could take inspiration from as she highlighted the importance of promoting active and healthy ageing throughout life, offering citizens with long-term care and support, and integrating ageing issues across all policy fields.

A keynote speech by Prof. Alexiei Dingli, AI expert from the University of Malta, delved into the transformative potential of AI senior companions.

“These intelligent technologies can reduce isolation, improve health monitoring and enhance independence,” Prof. Dingli said.

Mark-Anthony Vassallo, Consultant Geriatrician, addressed the critical medical and ethical dimensions of elderly care.

“Advance care planning, dignity, and freedom are cornerstones of effective ageing policies,” Vassallo noted, highlighting the role of collaboration between patients, families, and healthcare providers to uphold older persons’ rights.

CEO of Healthmark Charlotte Sant Portanier highlighted the fact that it is in everybody’s interests to make sure the rights and dignity of older persons are safeguarded and people are empowered to live safe, active and healthy lives.

“These are our parents, our grand parents, our great grand parents, and if we are lucky, we too will one day make it to our pensionable age,” she said.

Marvin Formosa, Director of INIA, urged all stakeholders to work together to address the emerging challenges, by examining global trends and applying success stories to Malta’s specific context.

Parliamentary Secretary for Active Ageing Malcolm Agius Galea also participated in the conference.

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Archbishop Scicluna calls for proactive steps to address Malta’s declining birth rate

December 13, 2024

Archbishop Charles Scicluna emphasized the need to address the low birth rate in Malta, which has fallen below the population replacement level.

He made this observation during his homily at the state pontifical mass celebrating the 50th anniversary of the Republic of Malta, held this morning at St John’s Co-Cathedral in Valletta.

The Archbishop noted that 60 years ago, in the year of Independence, Malta’s birth rate was 2.74, and 50 years ago, when Malta became a Republic, it had decreased to 2.08. Since then, he explained, the fertility rate has continued to decline, dropping to 1.11 this year.

“We need to examine the roots and causes of this decline,” Archbishop Scicluna stated. “In the interest of preserving our heritage and ethnicity, we must be proactive in promoting the blessing of children within our families.”

The Archbishop acknowledged that the latest incentives in the budget are a positive step forward, but stressed the importance of supporting young couples in fulfilling their natural vocation of parenthood. He highlighted the need for fair wages, affordable housing, and recognition of the vital role parents play in raising children.

Concluding his homily, the Archbishop posed a fundamental question: “On this day, we are duty-bound to ask ourselves—who will represent the Maltese identity and wave the national colours of our country when our generation comes to an end?”

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Addressing Malta’s demographic challenge:  The need for a strategic pro-natal policy

With Malta’s fertility rate at a concerning 1.1, experts stress the urgent need for a strategic pro-natal policy.

BY NICOLE ZAMMIT
4 FEBRUARY 2025

Malta’s declining birth rate and its long-term economic implications have once again come under the spotlight, with leading management consultants and policy advisors emphasising the urgent need for a strategic pro-natal policy.

David Spiteri Gingell, a management consultant and non-executive director, has been vocal about the island’s failure to implement concrete pro-natal policies despite repeated recommendations over the years.

David Spiteri Gingell / LinkedIn

Reflecting on his experience chairing the 2010 pensions reform strategic review and his tenure on the pension reform strategy group until 2021, he recalled that one of the key recommendations was to develop a well-defined, long-term pro-natal policy. However, he noted that despite the groundwork laid by demography expert Maja Miljanic Brinkworth in 2015 as part of the strategy group’s corpus of work, these recommendations have yet to be implemented.

“There is no doubt that a long-term pro-natal policy is of strategic importance for Malta,” Mr Spiteri Gingell stated.

“The fact is that Malta’s fertility rate stands at 1.1, far below the 2.1 rate required for a sustainable population. Without such a policy, discussions around migrants – whether from the EU or Third Country Nationals – become not only dangerous but also unfounded,” he said.

The economic and social implications of a shrinking local population are far-reaching.

As Malta’s workforce continues to evolve, an increasing number of Maltese citizens are pursuing higher education and shifting towards high value-added roles. This raises an important question: Who will fill the essential low value-added jobs that are crucial for the economy’s day-to-day functioning?

Mr Spiteri Gingell further underscored the risks of divisive rhetoric surrounding migration, highlighting the indispensable role of Third Country Nationals in sectors such as health, care, leisure, and entertainment. “Consider the potential chaos if Third Country Nationals were to go on strike – even for a day. The current populist discourse initiated by the PN only exacerbates these challenges.”

At a recent National Round Table Forum on Adapting Malta’s Labour Market to an Ageing Population, Mr Spiteri Gingell, discussed strategies to mitigate the effects of Malta’s demographic decline. In addition to reinforcing the necessity of a pro-natal policy, he advocated for more inclusive workforce planning measures, particularly to accommodate older workers.

These measures include:

• Flexible retirement models, allowing gradual transitions rather than abrupt exits from the workforce.
• Age-friendly workplaces, ensuring both physical and mental well-being for older employees.
• Retraining and upskilling opportunities, enabling older workers to remain relevant in the job market.
• Financial incentives, to encourage extended workforce participation while ensuring pension adequacy.

“Addressing these challenges is not just an economic necessity but a social imperative. Malta must act now to secure a sustainable, inclusive future for all generations,” he added.

Moving beyond financial incentives

Edward Mizzi / LinkedIn

Edward Mizzi, another management consultant, weighed in on the topic, questioning the effectiveness of financial incentives alone in reversing Malta’s declining birth rate.

While acknowledging that monetary support plays a role, he argued that the decision to have children is not purely transactional.

“Governments are scrambling for solutions, and inevitably, financial incentives – cash bonuses, tax breaks, childcare subsidies – keep resurfacing,” he observed.

“But here’s the real question: Do families just need more money to have more children?” he asked.

Mr Mizzi contended that families prioritise long-term stability over short-term financial boosts. He highlighted two key considerations that influence parental decisions:

• Work-life balance– Can parents spend quality time with their children, or are they forced to choose between a stable income and raising a family?
• Healthcare & wellbeing– Are there adequate support systems in place for parents throughout pregnancy and beyond?

“If we truly want to reverse the birth rate decline, we need to stop thinking of it as an economic transaction,” Mr Mizzi stated. “People don’t have children because they’re paid to—they have them when they feel secure about their future.”

On Monday (yesterday) economist Stephanie Fabri spoke to MaltaCEOs.mt about this matter, and outlined the challenges faced by Maltese parents, particularly the mismatch between school hours and standard working schedules. “Malta’s school day ends relatively early, leaving many parents scrambling to find adequate care for their children.”

In conclusion, the experts agree that Malta needs a multi-faceted approach to its demographic crisis. A well-structured pro-natal policy should go beyond financial incentives and focus on creating an environment where families feel supported.

Mr Spiteri Gingell emphasised that without such policies, the nation’s economic and social sustainability would be at risk. At the same time, Mr Mizzi’s perspective suggests that fostering family-friendly policies, enhancing healthcare support, and promoting work-life balance are just as crucial as financial incentives in addressing the issue.

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Urgent, drastic action needed to reverse Malta’s low birth rate, minister says

In 50-years’ time, the population of native Maltese will drop from the current 406,000 to 240,000, of whom 40% will be elderly

NationalParliamentPopulation

12 February 2025| Times of Malta |1282 min read

Finance Minister Clyde Caruana is calling for drastic action to stop the population decline.

The country needs to take urgent, drastic and expensive action to reverse the worrying downward trajectory of its native population numbers, Finance Minister Clyde Caruana told parliament on Wednesday.

Picking up on a public discussion sparked by the presentation of a report by professors Anna Borg and Prof Liberato Camilleri on perceptions towards a work-life balance with a specific focus on family size, the minister said he had done his own research and come up with worrying results.

Malta’s native population was currently 406,000 of whom 24% were aged over 65, he said. In 25-years’ time, the native population would be 336,000 with 34% being elderly. And in 50-years time the Maltese population would be just 240,000 of whom 40% would be elderly.

A country could only develop when it had a young population, he said, but the figures for Malta were worrying, with 55% of couples only having one child.

The study by the two professors, as well as his own research, confirmed that a household’s income was a major factor in having children.

He had found from official data that in couples who only had one child, the average age of the father was 32.4 and that of the mother 31.4 when the child was born. Where couples had two children the father was 31 when the first child was born and the mother 29.

Families that decided to only have one child had an average household income of €50,812. Those with two children had a household income average of €58,500.

It was clear that those who had more than one child had a better education, which led to better income, and therefore the option to start having children earlier, and have more than one.

The question was what could be done to change the trajectory of population decline.

“We need to act now. The growth of the country can only come about on the back of a young well-prepared population and the figures do not show this,” the minister said.

Families needed to be encouraged to have a second child. It was not a question of adding €150 a year to children’s allowance, that only helped them raise their children, not have more.

To be able to have more children, couples needed thousands of euro per year, in support, he said, such as a new tax compilation for those having more than one child.

“It will cost many millions (of euro) to make a difference. We need bold, drastic and immediate measures to make a difference, a change that would go down in history for changing the population trajectory,” Caruana said.

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Malta’s low birthrate cannot be ignored, Abela says

By

Monique Agius

–

February 16, 2025 1:21 PM

Malta’s low fertility rate, which is among the lowest in the European Union, cannot be ignored, Labour leader Robert Abela said on Sunday echoing concerns by finance minister Clyde Caruana on the same issue.

The prime minister said the country would eventually have to face the realities brought about by this trend.

On Sunday, Abela participated in a PL-organised discussion dubbed “Room4Ideas” which saw the participation of athlete Neil Agius and business woman Donna Cardona.

Abela acknowledged that many people, including himself and his wife, prioritised their careers after leaving university. He also argued that child-rearing should be a joint responsibility.

He then referred to Caruana’s proposal of a new tax rate that incentives parents to have a second child. He said that this was one of a number of possible solutions, adding that he was not of the opinion that it was just a matter of financial incentives.

Last week, Caruana told parliament that urgent, drastic and expensive action is needed to reverse this trend.

The Malta Women’s Lobby called for a dedicated task force aimed to study Malta’s low fertility rate.

The lobby issued a strong response to Caruana’s proposal to combat Malta’s plummeting fertility rate through tax incentives for parents with multiple children, arguing that financial measures alone won’t solve the nation’s demographic crisis.

The intervention comes as Malta grapples with one of Europe’s lowest fertility rates, standing at just 1.15 births per woman in 2022. Recent projections shared by Caruana paint a stark picture: Malta’s native population of 406,000 could shrink to 240,000 within 50 years, with 40% being elderly.

While Caruana’s parliamentary address highlighted household income as a crucial factor – noting that families with two children typically earn €58,500 compared to €50,812 for single-child households – the MWL argues this focus on finances overlooks crucial social factors.

“Raising children involves more than just financial expenditures,” an MWL spokesperson said. “It places a considerable physical, emotional, and mental burden on parents, particularly mothers.” The organisation emphasised that tax rebates without expanded family leave policies and flexible work arrangements would fail to achieve meaningful impact.

Women’s lobby challenges minister’s tax plan for boosting birth rate

On Sunday, Abela also questioned whether students’ current educational curriculum is sufficient to meet the needs of today, and noted that many children only practise physical activity once a week in school. The Labour leader underlined that students should do physical activity everyday.

He also touched on people’s nutritional habits and said there was not enough awareness on the topic. Abela then touched upon school homework and said that the amount of homework given leave students without any time to do any extra-curricular and physical activities.

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Multidisciplinary task force necessary to tackle low fertility

Women’s wombs are not a problem to be solved through financial incentives alone, Malta Women’s Lobby

NationalFamilyFertility

14 February 2025| Times of Malta |132 min read

Tax incentives are not enough to address low fertility issue. Photo: Shutterstock

The Malta Women’s Lobby has called for a dedicated task force to examine the issue of low fertility through a multidisciplinary lens.

Responding to the Finance Minister’s proposed tax rate for parents with multiple children to tackle low fertility, the MWL said on Friday that while such a measure “may offer some financial relief to families, this singular incentive alone will not address the complex roots of Malta’s demographic challenges”.

The lobby group urged a more holistic approach is required rooted in the importance of supporting families to adopt a “proper work-life balance”.

“While financial incentives are helpful, they shouldn’t be the only focus. A more comprehensive approach, grounded in the idea that “it takes a village to raise a child,” could make a real difference,” a spokesperson for MWL said.

A dedicated multidisciplinary task force would take into account financial, social cultural, housing and gender equality considerations.

“Tax incentives, while potentially beneficial, are just one piece of a much broader and more complex puzzle. Having a second child significantly amplifies a family’s responsibilities, especially in light of Malta’s limited support structures for working parents. If the government’s goal is to sustainably reverse the declining birth rate, the MWL urges a more holistic approach.”

“Raising children involves more than just financial expenditures—it places a considerable physical, emotional, and mental burden on parents, particularly mothers,” the MWL added.

Earlier this week, Finance Minister Clyde Caruana called for “urgent drastic and expensive action” to reverse the worrying downward trajectory of its native population numbers.

The debate on low fertility was sparked by the presentation of a report by professors Anna Borg and Liberato Camilleri on perceptions towards a work-life balance with a specific focus on family size.

The MWL said that introducing a tax rebate to encourage multiple births will “fail to achieve a meaningful impact on fertility rates” if they are not introduced in conjunction with an extension of family leave allowances, including maternity, paternity and parental leave, more flexible work arrangements and addressing the imbalance in gendered caregiving between the parents.

“We must move beyond what appears to be a masculine perspective that treats women’s wombs as a problem to be solved through financial incentives alone.”

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Economist Stephanie Fabri: Addressing Malta’s fertility rate ‘extremely difficult’ and should be top national priority

Here, in Malta we are experiencing one of the lowest fertility rates in the EU, and the uphill battle is increasingly steep.

by Sam Vassallo

20 February 2025

Low birth rates have become one of the most pressing demographic issues in the European Union. Fertility rates have dropped below replacement levels, raising the alarm on ageing populations, economic sustainability, and the long-term viability of social welfare systems.

Here in Malta, we are experiencing one of the lowest fertility rates in the EU, and the uphill battle is increasingly steep.

“It will be extremely difficult to reverse the trend because this somewhat became a social norm.  Addressing fertility rates should become one of our national priorities,” Stephanie Fabri, economist, tells MaltaCEOs.mt.

The decline in birth rates across Europe and Malta, Dr Fabri explains, is largely driven by economic and labor market instability. Economic uncertainty, high youth unemployment, and the rising cost of living discourage young couples from having children.

“Financial instability, particularly in Southern Europe, results in delayed family planning as young adults prioritise securing stable employment before starting a family. In Malta, the financial burden of raising a child remains a key factor affecting fertility rates, alongside high living costs and economic constraints,” she says.

Another critical challenge is the difficulty of balancing work and family life.

“In many European countries, parents struggle to maintain careers while raising children due to limited parental leave policies and insufficient childcare support.

Women, in particular, bear a disproportionate share of childcare and domestic responsibilities, which hinders their professional growth. As a result, many delay childbirth or choose to have fewer children. Malta faces similar issues, with calls for more robust work-life balance policies to ease the burden on parents,” the economist explains.

Cultural and social shifts have also played a role in the decline of fertility rates.

Contemporary societies in Europe have increasingly prioritised career advancement, personal fulfilment, and financial stability over early parenthood. Changing gender roles and declining rates of marriage also lead to smaller families and declined childbearing.

Changing gender roles and declining marriage rates have further contributed to the trend of delayed childbearing and smaller families.

“Malta is no exception to these societal changes, as many young adults opt to focus on professional aspirations before considering parenthood,” Dr Fabri says.

Many women postpone having children until later in life, which can lead to lower total fertility rates due to biological constraints or changing life circumstances. This pattern is evident in Malta, she explained, where young professionals are increasingly prioritising their careers before starting families.

Another factor is housing and financial constraints that further complicate family planning decisions.

High property prices and limited access to affordable housing discourage young couples from starting families. Countries like Germany and the Netherlands have seen declining birth rates due to financial stress, and Malta faces similar challenges. The country’s high property prices and rising cost of living create barriers to parenthood, making it difficult for couples to secure a stable home before having children.

Addressing low fertility rates through policy

Several EU countries, including Malta, have introduced policies aimed at supporting families.  The island could take notes from its European counterparts when taking the issue.

“France has been one of the most successful in implementing pro-natalist policies, offering generous child allowances, tax benefits, and childcare subsidies. The French Government provides direct financial aid to families, along with incentives for working parents and financial bonuses for families with multiple children.

Germany has also introduced measures such as parental leave reforms and financial incentives.

“This includes the Elterngeld program, which compensates parents for lost income during parental leave. Similarly, Hungary has taken an aggressive approach by offering interest-free loans for married couples, mortgage forgiveness for families with multiple children, and extended maternity leave benefits.”

In Malta, the Government has introduced financial incentives to encourage childbirth.

Dr Fabri mentioned that the 2025 national budget included an increase in children’s allowances, providing an additional €250 per child annually to benefit approximately 10,500 families. Birth and adoption bonuses have also been adjusted, with families receiving €500 for the first child, €1,000 for the second, and €1,500 for the third and beyond. Additionally, a new tax rate has been proposed for parents with multiple children as part of a broader strategy to combat declining fertility rates.

However, reversing this trend will be “extremely difficult” because it has become a social norm.

“Changing social norms and attitudes toward childbearing have also been a focus of policy efforts. Scandinavian countries have normalised dual-income households with equally shared parental responsibilities, reducing the career sacrifices often made by women. In Malta, Prime Minister Robert Abela has emphasised the need for targeted incentives to address demographic challenges.

However, demographic projections indicate that if the country’s birth rates continue to decline, Malta’s native population could shrink from 406,000 to 336,000 within 25 years, with one-third of the population being aged 65 or older. This stark projection highlights the urgent need for effective measures to support family growth,” she says.

Beyond financial incentives, work-life balance policies have been a key focus in several EU nations. Nordic countries, such as Sweden, Norway, and Denmark, have successfully implemented extensive parental leave programs and high-quality childcare services.

“Sweden, for instance, provides 480 days of paid parental leave, which can be shared between parents to encourage greater paternal involvement in childcare. France has also introduced affordable daycare options and incentives for shared parental responsibilities, while Germany and the Netherlands promote flexible working arrangements, such as part-time and remote work, to help parents balance careers and family life,” Dr Fabri adds.

In Malta, advocacy groups such as the Malta Women’s Lobby argue that financial incentives alone will not be enough to reverse declining birth rates. They emphasise the need for more comprehensive policies, including accessible childcare, parental leave reforms, and initiatives that foster a better work-life balance for families.

Housing and employment support measures have also been implemented in various European countries to address financial concerns related to raising children. Italy and Spain have introduced housing subsidies and tax deductions for families, while Germany has focused on improving employment security for young workers. Austria has prioritised affordable housing programs by providing low-interest mortgage options and rent subsidies. Malta, however, continues to face challenges in this area, as high property prices and limited access to affordable housing make it difficult for young families to establish stable living conditions suitable for raising children.

Addressing low fertility rates in the EU and Malta requires a comprehensive approach that includes economic security, work-life balance initiatives, and social incentives. While policies implemented in France and Nordic countries have shown positive results, other nations, including Malta, still face significant challenges.

“The introduction of financial incentives and proposed tax reforms in Malta marks an important step toward encouraging childbirth. However, experts argue that a broader strategy that includes better employment security, housing support, and shifts in societal attitudes toward family life is necessary. Moving forward, a coordinated European and national approach that integrates financial, employment, and social policies may be the key to reversing declining birth rates and ensuring demographic sustainability,” she finishes.

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Malta’s Declining Fertility Rate:  A Demographic Challenge

Eurostat continues to confirm that Malta has the lowest fertility rate among European countries. In 2023, the country recorded the lowest total fertility rate in the European Union, with just 1.06 live births per woman. This places Malta at the bottom of the EU rankings, followed closely by Spain (1.12). In contrast, Bulgaria (1.81) and France (1.66) had the highest fertility rates within the bloc. However, even these figures remain below the replacement level, and Bulgaria, in particular, has one of the highest average ages in Europe. British demographer Paul Morland said Bulgaria’s population will shrink by half in the coming years.

Malta’s fertility rate has been steadily declining over the past decades. This trend is not merely a reflection of broader European demographic patterns. A closer examination of the statistics reveals that Malta and Spain consistently rank at the lowest end of fertility rates. Digging deeper, one finds that the organisations, academics, and NGOs advocating for policies that do not promote higher fertility rates in Malta have been working closely with their Spanish counterparts, who share the same ideological outlook. Spain has notably some of the most biased laws against men in the EU, and Malta has adopted these legal frameworks within its civil and criminal codes in recent years. It is unlikely to be a coincidence that young men and women in both Malta and Spain are increasingly reluctant to marry and have children.

The government has acknowledged the demographic challenge, yet given the current socio-cultural climate, it seems unlikely to propose practical solutions to encourage young couples to marry. A profoundly ingrained cultural shift against marriage and the traditional family has taken root, and reversing this trend will be difficult. Any proposals addressing this issue must consider Malta’s stark figures, particularly when compared to the EU average of 1.38 live births per woman in 2023, down from 1.46 in 2022. This ongoing decline signals mounting demographic pressures for the country.

Factors Behind Malta’s Low Fertility Rate

While economic pressures and rising living costs undoubtedly contribute to Malta’s declining birth rate, these factors alone do not explain the trend. While the government has introduced commendable childcare initiatives, both young and married couples remain hesitant to start or expand their families. The soaring cost of housing further exacerbates this issue. The government sought to implement countermeasures, such as subsiding rent leases, but these were insufficient to reverse the trend.

A fundamental change in social norms is necessary. However, this would require dismantling the gender-based narratives that have dominated Maltese discourse over the past decade. These narratives have frequently portrayed the family as patriarchal despite historical evidence to the contrary. The issue extends beyond couples prioritising career advancement, education, and financial stability before having children. In many ways, the broader legal framework has waged a silent war against parenthood. The result is that Malta now has the lowest fertility rate in Europe.

It would be misleading to attribute this solely to women’s increased participation in the workforce. France, for example, has a high female employment rate yet maintains a significantly higher fertility rate than Malta. The Maltese government has introduced numerous support measures, yet couples still do not perceive having children as financially feasible. Perhaps it is time to investigate whether young people are increasingly rejecting marriage as a viable life choice.

With fertility rates at such low levels, immigration alone will soon be insufficient to counteract demographic decline. While Malta has experienced a notable population increase due to migration, Morland has warned that this resource will not be sustainable in the long run. The country must prepare for a fundamental shift in its demographic composition.

The consequences of this demographic shift are already evident. Malta’s ageing population puts immense pressure on the healthcare system, pensions, and social services. Even essential nursing assistance is becoming increasingly strained.

More concerning is the long-term sustainability of the welfare system. At present, foreign workers are helping sustain the system. Still, as already mentioned, they, too, are contributing to the growing burden on healthcare services, and this resource will soon be running out.

Finally, the labour market already feels the effects of a shrinking workforce, impacting productivity and economic growth.

Addressing the Issue: Policy Considerations

Theories taught at university suggest that the issue can be addressed by implementing family-friendly policies to encourage higher birth rates. These typically include affordable childcare, parental leave incentives, and financial support for working families. The Maltese government has already introduced many such measures, including free childcare, yet these efforts have failed to reverse the declining trend.

Housing policies also play a role. Theoretically, making housing more affordable should encourage family formation. While the government has implemented initiatives to ease the financial burden on young couples, the impact has been limited. Further measures could be considered, but whether they would significantly alter current trends remains uncertain.

Workplace flexibility is another key area of focus. Policies designed to help parents balance careers and family life have already been introduced in Malta, yet they have not yielded substantial results.

Demographers also emphasise the importance of cultural shifts that promote shared parental responsibilities and a better work-life balance. While some measures in this regard are already in place, the fundamental cultural shift that needs to occur is a shift away from “woke” ideologies and a renewed focus on family structures. Instead of implementing laws that undermine the family unit in the name of progressivism, policymakers should recognise that strong family structures are essential for societal stability and long-term demographic sustainability.

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Speaker of the House of Representatives launches publication by the Malta Employers, addressing labour market adaptation to an ageing population

“This publication marks not the end of a journey but the beginning of a broader discussion” stated the Speaker of the House of Representatives when earlier today he officially launched a publication by the MEA titled Adapting our Labour Market to an Ageing Population – Comprehensive Analysis and Strategic Framework.

Speaker Anglu Farrugia emphasised that while ageing poses challenges, it also presents unique opportunities for innovation and solutions that ensure a sustainable future. He urged stakeholders and all interested parties to thoroughly examine the document and integrate its recommendations into their work.

In his address, Malcolm Paul Agius Galea, Parliamentary Secretary for Active Ageing said that workplace adaptations must be grounded in medical evidence to effectively support the physical and psychological well-being of Malta’s older workforce, including the critical need for adequate recovery and leisure time to prevent burnout and maintain cognitive health.

Paula Mifsud Bonnici, shadow Minister for Active Ageing, said that while she appreciates that the Malta Employers Association’s instrumental role in bringing together social partners to discuss active ageing, we urgently need a comprehensive policy framework that effectively addresses both workplace conditions and support systems for our older workers. This cannot be dealt with in silos, but we need an integrated approach.

MEA President Joanne Bondin emphasized that promoting silver employment is not only a necessity but a strategic advantage for the economy. She highlighted that senior workers bring invaluable skills, mentorship, and institutional knowledge, while also reducing reliance on foreign labour. Rather than viewing the ageing workforce as a challenge, Ms Bondin presented it as an opportunity to build a stronger, more resilient labour market.

MEA Director General Kevin J Borg added that rationalizing the labour force means encouraging continued participation beyond retirement. However, this should not be through coercion, but by making work more rewarding and adapting workplaces to suit the needs of older workers.

Joseph Farrugia, MEA’s Consultant, emphasised the psychological importance of work for older individuals. He explained that many people face a crisis when asked to retire abruptly, experiencing feelings of being unappreciated and struggling with the newfound abundance of free time. This can negatively impact their psychological well-being.

In his concluding remarks, Speaker Farrugia emphasised the need to view the ageing population not as a burden but as a valuable resource rich in experience and wisdom. He cited examples from across Europe, where older workers significantly contribute to economic and social well-being, showcasing the potential for similar achievements in Malta.

Speaker Farrugia concluded by stating that this comprehensive framework is an invitation for collective action, as Malta adapts its labour market to meet the realities of an ageing population while ensuring a sustainable and inclusive future for all.

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I would like to thank Malta Employers for organising this event which I believe is a very good follow-up from last year’s event in the Maltese Parliament where we discussed Malta’s low birth rate and the impact this has on various sectors.

As an organisation which is based in Gozo I am obviously going to discuss this topic from an island region perspective.  As already highlighted last year Gozo faces specific challenges. Between 2017 and 2022 the population in Gozo increased by 5,618 more inhabitants or a growth rate of 16.2 per cent when compared to 2017.

It is interesting to note however that over this six year period while in all the regions in Malta the highest percentage increases were observed in the age cohorts of 30 to 39 and 40 to 49 years, Gozo experienced the highest percentage increase in the 30 to 39 cohort, followed by the 70 to 79 age group.

Moreover in Gozo there was a decline in the 10 to 19 age group and the lowest increase in the 50 to 59 age cohort (NSO, Regional Statistics 2024, pp. 13-14), when compared to other regions.

Obviously this points out to an increasingly ageing population in our island region. Here we are trying to answer the question on how we can adapt our labour market to an ageing population.  However, this is neither an easy question and for surely one which merits a multifaceted answer.  In our case I also believe that this merits an answer which also draws on some regional insights.

While from the concept note distributed and the research presented it is evident that from a mental health perspective it would be beneficial for elderly people to remain involved in the workplace, it is important that this issue is analysed and tackled carefully.

How are we going to increase the apetite of an increasingly ageing population to remain involved in the workforce?  I believe that this calls for specific incentives which would enable them to remain actively involved while also be in a position to reap the benefits for which they have worked all their life. Another important question which I believe remains very relevant to us is:

How is an ageing population going to remain relevant to the ever changing demands within the workplace, and with skill-set requirements which are 1 continuosly changing.  In this aspect training will be crucial.

However, another crucial question which we need to answer is how will we convince people to continue train when we also find difficulties to train our existing workforce.  In this case the incentive factor will play a very important part.

Nonetheless another important point which I would like to highlight today is that we need to ensure that the ambience at the workplace is favourable to elderly people, welcoming them both from a physical perspective and also from a social perspective.  Sometimes we focus our perspective only on the number crunching aspect of things.  Pope Francis refers to this as an intergenerational dialogue.

We cannot expect people over 60 to remain involved if they do not feel accepted at the workplace. We must encourage youth to reap the benefits of working with people in old-age. Another question which we would also need to answer is: What type of work are we going to offer to people who are more than 60 years old?

At present the economy in Gozo is based mainly on the tourism and construction sectors.  For an ageing population involved in these sectors which are labour intensive but who are also more demanding physically we must also ask ourselves on: how can people continue to work in these sectors but perhaps in less physically demanding roles?  Also can their skills be used in other sectors which are less physically demanding?  In this case how are we to assist them to make the transition to other sectors?

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Malta population in 2070 to grow to 811,000

Better life expectancy, decline in births will see one in every three persons aged over 65

6 May 2024, 6:30am
by Matthew Vella

2 min read

The old-age-dependency ratio – those aged over 65 relative to those aged 20-64 – will increase from 30.5% to 65.4% in 2070

Healthier life years after retirement, older workers, and unprecedented population increase: this is the picture of Malta over the next half-century.

Population projections from the finance ministry’s annual report on ageing submitted to the European Commission place the island’s population in 2070 at just under 811,000 – a 53% increase over present figures of 527,000.

Not only will Malta host even more people in what is already one of the densest places on earth – 1,666 people per square kilometre – but there will also be fewer young people being born as a healthier population grows older.

Indeed, the share of very young people aged up to 14 will decrease from its current 13.4% share, to 11.1% in 2070, while those aged over 65 will increase from 19.3% to a whopping 33.6%.

Medical advancements will also guarantee greater life expectancy for men, rising by over six years to reach 87 in 2070, and for women to reach close to 91.

And net migration, the difference between incoming and outgoing migration, will fall from 11,456 in 2022 to just under 4,000 in 2070.

With one person in three aged over 65 towards the end of the next century, this demographic change means a greater share of the working population aged 20-64 will be bearing the financial ‘burden’ of the elderly: from 63.2% currently financing the pension pot and healthcare cost, that ratio will fall to 51.5% in 2070.

Dependency ratios – those who are likely to be “dependent” on the support of others, youths and pensioners, for their daily living – better illustrate the kind of ageing society Malta will be living in, in 2070.

The old-age-dependency ratio – those aged over 65 relative to those aged 20-64 – will increase from 30.5% to 65.4% in 2070; while that for those aged over 75, relative to the 20-74 age bracket, will also grow from 11.5% to 30%.

In this scenario however, there will be more people gainfully employed in the labour market. For example, there will be far more workers aged 55-64, increasing from 55.3% to 71.8% in 2070.

Men’s average exit age from work, currently at just under 63, will edge up to 63.6 years in 2070, and women from 63.1 to 63.6, an increase that reflects the rise of the statutory retirement age by 2027, lengthening the contributory period by 2034, and the incentives to defer retirement. This should result in more people with full contribution postponing retirement by one to four years.

With an ageing population comes a higher spend to finance the national pension pot, currently costing 6.2% of Malta’s GDP. By 2070, it will be 10.5% of GDP while revenue from contributions would have fallen from 7.6% to 7.2% of GDP. By increasing retirement age and the contribution period for full pension eligibility, the projected increase in pension expenditure is lowered.

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