European Commissioner for Jobs and Social Rights Nicolas Schmidt during his recent visit to Malta called for more investment in skills to boost wages and prevent a brain drain.

“To increase productivity, you need to invest in people’s skills. This allows you to upgrade the economy in terms of better value-added and an increase in wages will follow,” Commissioner Schmidt told Times of Malta. His call was accompanied by a stern warning: failure to adopt this approach will inevitably lead to younger, more skilled workers seeking pastures new abroad, noting that several Eastern European countries had faced a similar exodus.

Unfortunately, there are worrying signs that this brain drain has started already. A couple of years ago the EY annual survey had sounded the alarm bells after it transpired that the majority of Maltese youths saw little prospects for their future and would seriously consider leaving for good, if they came across the right opportunity. This trend emerged again last November whereby the main finding was that 60% of Maltese youths were very concerned about inflation with almost three quarters saying they would rather live abroad.

Apart from the employment opportunities or the lack of them, another major concern is property prices. While on one hand, our economy seems to be growing mainly due to the importation of third country nationals to the detriment of Maltese workers who are being driven away from certain jobs due to the poor conditions on offer, buying a house is becoming more expensive. According to the latest data published by the National Statistics Office, in the first three months of this year apartments rose by 6.8% when compared to the corresponding quarters of 2022. In other words, in just 12 months an apartment which at the turn of last year cost €200,000 – an entry level price for a 2-bedroom property in a modest area – has increased by almost €15,000.

Meanwhile, the traffic situation is getting no better with arterial roads becoming gridlocked throughout the day and not just during rush hour. In short, the sharp increase in population is negatively affecting the quality of life.

Consequently, unless there is no change in direction this brain drain will only increase. The 2024 Budget offers the possibility to start steering away and head towards a more sustainable economic model. Unfortunately, in recent years the Budget has focused on short-term targets with no sustained efforts to look beyond the following 12 months. While this approach might have been justified in the wake of the economic shocks cause by the Covid-19 pandemic, we have now reached a stage whereby we cannot postpone these decisions any further. This time of the year, which normally marks the presentation of the pre-Budget document could be a good window of opportunity for the government to convey a strong signal on its long-term economic plans.