In December 2013, Jobsplus counted 18,691 foreign workers in Malta. Of those, 6,410 came from outside the European Union. Twelve years later the same register shows 135,417 foreign workers, and 94,130 of them are third-country nationals, or TCNs as the paperwork calls them. That last figure is nearly fifteen times what it was. I cannot think of another change in Maltese life during my working years that comes close.
I have argued for a while now that the country should aim for fewer arrivals, better pay and more investment behind each worker. I have not changed my mind. What I have grown tired of is hearing that case made as though the present arrangement were a blunder from which nobody gains. Plenty of us gain. You gain if you let a flat in Gżira, if you run a kitchen in St Julian’s, if you are a minister presenting a budget, and you gain if you draw a pension from a fund that foreign contributions help to keep in balance.
So I will count what the model pays for first, then look at Britain, where the inflow has just been cut hard, and only then say what I would change here and who would lose by it. A plan that hides its losers is not one I would trust if somebody else wrote it.
What the model pays into the Treasury
Start with the Treasury, because that is where the dependence shows most plainly. General government revenue was €3.1 billion in 2013. Last year it was €8.6 billion, on Eurostat’s figures. Taxes on income and wealth alone went from a little over €1 billion to €3.7 billion. The economy roughly doubled in real terms over those twelve years, and when I split that growth using the same national accounts the source is not hard to find. The number of people in work rose by 77%. Output per worker rose by about 17%. About three quarters of the employment growth between 2013 and 2023 came from foreign workers, and that is the government’s own Pension Strategy Group talking, not me.
With that money, one finance minister after another could put pensions up each year and widen the income tax bands. They could hold energy prices down too, at a cost the IMF puts at 0.8% of GDP, and still come out with a deficit of 2.2% of GDP for 2025 and debt below 47%. Take the extra workers out of the sum and those budgets do not add up the way they were presented.
Pensions are where it bites hardest. The strategy group counts 283,000 people paying social security contributions in 2023, up from 151,000 in 2008, and only 166,420 of them were Maltese. MaltaToday, reporting the group’s review this January, found that out of nearly 245,000 foreigners who paid in at some point during those fifteen years, 5,736 had earned any pension entitlement. That is 2.3%. About half leave within two years. They pay national insurance into a pay-as-you-go scheme and go home long before they could claim from it, and I doubt an actuary could design a kinder arrangement for the Maltese pensioner. The finance ministry’s own fiche for the EU Ageing Report says that if net migration ran a third below its assumption, pension spending in 2070 would be higher by around one point of GDP.
Who else collects: hotels, builders and landlords
The private side is easier to see from the street. At the end of 2025 there were 14,641 TCNs on the Jobsplus books in hotels, restaurants and bars. Back in 2013 it was 1,073. Construction went from 788 to 9,853. Professional, administrative and support services, the heading that takes in the temping agencies, the cleaners and the security firms, went from 1,424 to 23,306. Malta received just over four million tourists last year and it did not serve them with Maltese hands alone.
Then there is property. Five years ago, at the end of 2020, the Housing Authority’s register held some 27,000 rental contracts. By October 2025 it held over 71,000. The Central Bank went and surveyed that market in 2023, and what it found was Maltese landlords nearly everywhere it looked, 97% of them, letting mostly to people from outside the EU, who came to about three quarters of the tenants it sampled. Rents as Eurostat measures them are up 53% since 2015, against 20% across the EU.
And the wages are low. In February the finance minister tabled the 2024 income records in Parliament, sorted by citizenship into thousand-euro brackets. Go looking for the middle Maltese employee and you find him or her somewhere between €27,001 and €28,000. Do the same for TCNs and you stop at €14,001 to €15,000, which is about half. Three out of four TCNs were on €20,000 or less. Output tells the same story. Each job in accommodation and food produced about €42,000 of value added in 2025 and each construction job about €44,000. The figure for the whole economy was €67,000. For information and communication it was €181,000.
Put those three things together and you can see who collects. The work gets done at wages few Maltese would take. The Treasury has the tax and the contributions, landlords have the rent, and firms that need a lot of hands get them cheaply. With that many people on the receiving end, I am not surprised that neither party in government has been in any hurry to stop it.
Britain has already run the experiment
Britain shows what happens when the tap is turned down, and I watch it closely. Net migration peaked at 944,000 in the twelve months to March 2023, and the latest count from the Office for National Statistics, for calendar 2025, is 171,000. The Office for Budget Responsibility had already done the sum for a fall of that kind. Its answer, back in March 2024, went like this. Take 200,000 a year off net arrivals, leave spending plans alone, and by year five the government is borrowing £19.9 billion more. Trim the departments to fit the smaller population and it is still £13.1 billion more.
So yes, fewer immigrants means less public money, at least for the first several years. Anybody in Malta who promises lower numbers and the same budgets is promising something the British figures say cannot be had.
The British evidence has a second half, though, and I think it matters more. Last December the independent Migration Advisory Committee worked out lifetime contributions by visa route. A main applicant on the Skilled Worker route is worth a net £689,000 to the public finances over a lifetime. A health and care worker is worth £54,000, and an adult dependant on that route costs £67,000. The OBR says the fiscal impact of a migrant over the life cycle is “heavily dependent on their earnings level”. Denmark’s finance ministry has published the same kind of split: in 2019, immigrants and descendants from Western countries paid in DKK 11 billion net, while those from non-Western countries cost about DKK 27 billion.
Japan, which kept immigration low for decades, is the warning from the other direction. Its working-age population is down to under 74 million, output per hour is about three quarters of the OECD average and public debt is above 200% of GDP. Shutting the door does not make a country productive.
Why cheap labour puts off the upgrade
Read the two halves together and the question for Malta is less how many than who, and to do what. There is also a cost in the present mix that never appears in a budget speech, which is that cheap labour puts off investment. The economist Ethan Lewis showed this for American factories in 2011. Plants in areas that took in more low-skilled immigrants bought noticeably less automation machinery. I see no reason why a Maltese contractor, hotelier or care home owner should behave any differently. When another pair of hands can be had for about €14,500 a year, a dishwashing line, a prefabricated wall system or a decent rostering program is hard to justify to the bank.
The national numbers fit. Output per hour worked in Malta was 80% of the EU average last year, which is lower than it was in 2015. We put 0.6% of GDP into research and development, where the EU average is 2.3%. Denmark, which is far choosier about whom it admits, spends over 3% and produces 138% of the EU average per hour. In June the European Commission’s country report said that only 13.8% of our post-secondary graduates come out of science and technology courses, against 25.2% across the Union.
So I would point the next ten years at work that earns several times its wage bill. Software and applied AI come first on my list. Then machines to do the plastering, the dish pit and the stock count, jobs we cover today by adding heads. Then medical devices and bio-health, then satellite data and space services, and the regulated end of finance, where a small English-speaking EU state starts with an edge. Information and communication already produces four times the value per job that hotels and restaurants do. I want that to be the normal Maltese job and not the exception, and that gets decided in classrooms and at MCAST long before it reaches a visa desk.
What I would change, and who pays
What would I change? Four things, and then I owe you the bill.
One, price low-wage permits the way Singapore does. A services firm there pays a monthly levy of between S$300 and S$800 for every work-permit holder, the rate climbs as foreigners take up more of its payroll, and it may not go past 35%. Malta’s 2025 migration policy doubled the first permit fee to €600 and capped how fast a firm’s permit numbers can grow. A flat fee does not tip an employer towards buying a machine, though, and a rising levy does, with the money raised going to help pay for it. Budget 2026 put €100 million towards digitalisation, which is the right idea on too small a scale.
Two, shrink the state through retirements and not through redundancies. Full-time public sector jobs went from about 41,900 in 2013 to 55,195 last October, and the government pay bill from €1.0 billion to €2.4 billion. Malta already comes first in the EU’s eGovernment benchmark, so the plumbing exists. The British government reckons full digitisation is worth 4% to 7% of public sector spending. I would replace one leaver in two for ten years and hand the form-checking to software.
Three and four are the things eating the island. In June there were 463,734 licensed vehicles, 34 more every day, and the national transport plan costs congestion at €770 million a year. Last autumn there were 9,376 Airbnb listings against 7,116 licensed holiday homes, and a study of Barcelona found short lets had pushed rents up by about 7% in the busiest districts. I would charge for road space at peak hours and cap short lets locality by locality.
Now the bill. Revenue growth will slow before productivity makes up the difference, and my guess is that the gap lands on whoever is finance minister between about 2028 and 2034. Landlords, hoteliers and contractors feel it first. A restaurant meal, a care home bed and a tiled bathroom will all cost more. With a fertility rate of 1.01, the lowest in the EU, Malta will still need people from abroad, nurses and carers above all, and I would keep those routes open and pay the people on them properly.
There are fair objections and I would sooner end on them than hide them. Luxembourg has a far bigger foreign-born share than Malta, Switzerland about the same, and both are much more productive, so immigration as such did not hold them back. Then there is America, which shut out Mexican farm labourers at the end of 1964 on the promise that farm pay would go up. Three economists went back over the records in 2018 and found it had not. Growers bought machines or switched crops. A levy can shrink a sector as easily as upgrade it. To me both points argue for phasing the change in and for bringing in skill ahead of volume, which is a long way from carrying on counting heads and calling the total growth.
Common questions
How much does Malta’s economy depend on third-country nationals?
More than most people realise. When Jobsplus did its count last December it found 135,417 foreign workers on the books, and 94,130 of those had come from outside the EU. Go back to 2013 and you find 18,691 and 6,410. Roughly three of every four jobs added between 2013 and 2023 went to a foreign worker, which is the Pension Strategy Group’s own estimate.
Does lower immigration mean less money for public services?
For the first few years it does. The British fiscal watchdog, the OBR, did this sum in March 2024. Take 200,000 a year off net arrivals and, with spending plans left alone, the government is borrowing £19.9 billion more by year five. Look over a whole lifetime and it comes down to pay. On the Migration Advisory Committee’s numbers a Skilled Worker main applicant puts in a net £689,000, while a health and care worker puts in £54,000.
What would replace the foreign-worker model in Malta?
Getting more out of each worker, and I will not pretend that is as quick as stamping a permit. My own order would be a levy on low-wage permits that climbs the more a firm depends on them, then a public sector that gets smaller as people retire and software takes the form-checking. After that comes research, where we spend 0.6% of GDP, and a lot more students in science and technology.
Who loses if Malta relies less on imported labour?
The finance minister, to begin with, because revenue stops growing so fast well before productivity makes up for it. Then anyone who lets property, runs a hotel or builds, since tenants and cheap staff both get scarcer. The rest of us pay more to eat out, to place a parent in a care home or to have a bathroom tiled. Pensions feel it as well. In 2023 about four in ten of the people paying social security contributions were not Maltese.
Sources: Jobsplus, Foreign Nationals Employment Trends, totals and sector tables to December 2025; Eurostat, government revenue and expenditure (gov_10a_main), with national accounts (nama_10_gdp, nama_10_pe, nama_10_a64), productivity per hour (tesem160), R&D intensity (rd_e_gerdtot), actual rentals (prc_hicp_aind), fertility (demo_find) and foreign-born population (migr_pop3ctb), all extracted 10 October 2026; Pension Strategy Group, 2025 Strategic Review of the pension system, consultation version; MaltaToday, Immigration keeps Malta’s pensions afloat, 8 January 2026; MaltaToday, Income data reveals sharp disparities by citizenship, 15 February 2026, reporting the finance minister’s parliamentary reply; International Monetary Fund, Malta: 2025 Article IV consultation, 6 February 2026, with the energy subsidy cost as reported by MaltaToday on 7 February 2026; Ministry for Finance, 2024 Ageing Report country fiche for Malta, November 2023; its Table 16 gives 0.8 points of GDP for lower migration and its text gives 1.3, so I have said around one point; National Statistics Office, Inbound Tourism: December 2025, NR 020/2026; National Statistics Office, Registered Employment: October 2025, NR 047/2026, and NR 169/2014 for the 2013 public sector figure; National Statistics Office, Motor Vehicles: Q2/2026, NR 144/2026; Housing Authority, Rental contracts more than double in five years, 29 October 2025; Central Bank of Malta, Quarterly Review 2024:3, Box 2, rental market survey; European Commission, 2026 Country Report: Malta, SWD(2026) 218, 3 June 2026, for graduates and the congestion estimate it takes from the National Transport Master Plan 2030; Office for National Statistics, Long-term international migration, provisional: year ending December 2025, 21 May 2026; Office for Budget Responsibility, The impact of migration on the fiscal forecast, Economic and fiscal outlook, March 2024, Box 4.5; Office for Budget Responsibility, Fiscal risks and sustainability, September 2024, correction slip, 14 November 2024, for the quotation; Migration Advisory Committee, Annual Report 2025, 17 December 2025; Finansministeriet (Denmark), Indvandreres nettobidrag til de offentlige finanser i 2019, revised 29 September 2023; Statistics Bureau of Japan, Statistical Handbook of Japan 2025, with the OECD Productivity Database and IMF press release 26/105 of 3 April 2026; Lewis, E., Immigration, Skill Mix, and Capital Skill Complementarity, Quarterly Journal of Economics 126(2), 2011; Clemens, M., Lewis, E. and Postel, H., Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion, American Economic Review 108(6), 2018; Ministry of Manpower (Singapore), Services sector: Work Permit requirements, read 10 October 2026; Jobsplus, Implementation of the Malta Labour Migration Policy, July 2025; Ministry for Finance, Budget Speech 2026, 27 October 2025; Public Service of Malta, Malta maintains top position in Europe for digital government services, 26 June 2026; Department for Science, Innovation and Technology (UK), State of digital government review, 21 January 2025; Amphora Media, Lawless Lets, 3 October 2025, using Inside Airbnb and Malta Tourism Authority licence data; Garcia-López, M.-A. and others, Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona, Journal of Urban Economics 119, 2020. Figures are official estimates and are revised from time to time. Where I have divided one official series by another, the caption says so.