Finance Minister Edward Scicluna makes an important point in today’s Business Observer: data is crucial for planning purposes.

This is of particular importance when you consider that when it comes to government decisions, every action has an equal and opposite reaction. Take, for example, the disastrous decision to allow additional floors to be added to houses which resulted in the wholesale destruction of two-storeyed terraced houses.

Or the heavy-handed decision to tax host families which resulted in a dramatic decrease in the number of households willing to take in English-language students – which took years to recover even after a hasty compromise was made.

The decision to reduce the tax on income from the rental of properties was a pragmatic way to address the rampant tax evasion that was clearly eating into government revenue. Tax Commissioner Marvin Gaerty had explained two years ago that there was a considerable amount of enforcement, with automated systems able to search through individual taxpayers and identify those who have more than one property.

“The more properties the taxpayer has, the more likely it is that he is renting them out. You have to prioritise and audit the cases where there is most risk of irregular activity,” he had told The Business Observer at the time. However, enforcement was clearly not enough and not only the stick but a carrot was needed.

The government needs to assess whether this policy change had the desired effect, and if so, to what extent. It needs to know how many people are now declaring rental income that was previously lost to the black economy and how many people are now renting that did not, encouraged by the easier and lower flat rate. This has to be offset against the revenue lost because those who actually were declaring their rental income (net of expenses) and paying 35 per cent now only pay 15 per cent.

Even these numbers only tell part of the story. They have to be weighted against the number of properties coming on to the rental market, increasing demand (and the higher wages these tenants earn which make landlords salivate), and the way higher prices at the top end of the market drag up those at the lower end.

This newspaper has tried repeatedly to get figures which would shed light on these trends but these are either not available or not forthcoming. From what the Finance Minister said, the lack of statistics is also frustrating him.

The government needs to model forecasts before it takes decisions and it also needs to be able to check that policies deliver the ‘intended consequences’ while watching out for unintended ones.

Is the Malta Developers’ Association right to say that rental income was being underdeclared and that prices have therefore not really gone up that much (from 23 per cent to 38 per cent for three-bedroom and one-bedroom apartments respectively between 2012 and 2015)?

Understanding all of this is important because of the conclusion drawn by anti-poverty groups that lower-income households were being squeezed out of the market. It is important because this has led to calls for the government to intervene – which would be a disaster unless there were a clear indication of market failure causing social injustice.

The more dynamic a sector, the more important it is to have timely and comprehensive information. This is nowhere more true than in the property sector. Prof. Scicluna may not have been referring to the property sector but he was right: “We need better data for planning purposes.”