Isn’t Malta lucky? In terms of natural disasters, it is one of the safest places to live in. Its economy is doing well and it ranks 30th out of 157 countries in the world’s happiness report. It is also one of the safest holiday destinations. No wonder then it is regarded as the third best place where to live.

On the face of it, everything appears to be going swimmingly, except that there is more than one fly in the ointment. Sharp income inequality is a major concern and so is the ever-present threat of continued overdevelopment. The social fabric is undergoing strains and stresses with new modes of living and moral standards deteriorate under the pressure of foreign influences and sharp hedonistic trends.

But there is another disquieting matter that is gaining increasing relevance and which has not yet filtered through the sieve of international country assessments: the country’s image. So far, Malta may well have been regarded as a top scorer in various fields but how will those monitoring the situation on the ground now consider the implications on the island of the revelations of the Panama Papers insofar as these concern the government?

It is not enough for the government to put in place institutional arrangements to ensure accountability and transparency if it fails to act correctly in matters that impinge on its moral character. Stripping a minister of his portfolio in a Cabinet reshuffle but making him responsible for the same sector (energy) for which he was responsible before is a farce. Arguing that this constituted enough punishment, as it were, for the minister’s decision to have a company in Panama is unconvincing. Despite any assertion to the contrary, in keeping the minister in his Cabinet, the Prime Minister has given the seal of approval to a decision seen to be injudicious.

Equally baffling is his decision to keep in place his chief of staff, who has also been found to have a company in Panama. He may well have resigned from the boards of directors of the companies in which he has a strong financial interest and he may also not be an elected person, as the Prime Minister has said in his defence, but the fact that he occupies a very important post calls for the highest level of propriety.

Is not the Prime Minister giving the worst possible example? How are the people supposed to react to such blatant impropriety?

To diehard Labour Party supporters, the episode may no longer mean much since the impression is being given that the minister has paid for his mistake. However, to many others, as well as to uncommitted voters who voted Labour – perhaps for the first time – in the last election, the story grates to the bone.

Joseph Muscat is clearly banking on the belief that, by the time Malta goes to the polls, the issue would have been long dead and buried. That is unlikely to be the case, especially if more cases of impropriety, misdemeanors, and scandals crop up between now and then.

This administration has been marked by a string of scandals the thought of which would have been unimaginable three years ago when Labour promised a squeaky clean administration.

Malta’s image is bound to suffer if Dr Muscat keeps acting in a manner that gives the impression that choosing a secretive tax destination, even by people very close to him, is not all that bad after all.