The news reported in the Times of Malta that the Labour administration is trying to conclude deals with certain chosen contractors to buy up their unwanted and unsold property in exchange for tax owed by the contractors is economic folly of the highest degree.

It is beyond the absurd that anyone with the best interests of the nation at heart, would seek to conclude such arrangements that have the potential to massively distort our already inflated property market, to the detriment of ordinary Maltese struggling to own their home.

It is more than simply manipulating the property market. It is a blatant move to enrich chosen contractors who cannot find buyers for the mammoth amount of flats they put on the market.

Instead of promoting sustainable growth, the regulator has suddenly also become the buyer. This is the opposite of what a responsible government’s role should be.

It is sending a message that contractors should not pay tax, that they can build more than the market can absorb and to sell at prices that are beyond most people – and to do it all without any element of risk.

Once the risk has been removed from the transaction, contractors can then continue to build as many flats as they want to (and as high as they want to), try to sell them at whatever price they want to and if they fail to find a seller, go to Joseph Muscat and get him to use taxpayers’ money to buy the unwanted and unsellable property off them under the guise of increasing social housing.

Any person with a small degree of understanding of the situation would realise immediately that it would be infinitely cheaper for the government to build purpose-built social housing units itself or use some of the property it already owns.

Uncalled for State-meddling in the market could have ripple effects that are felt for years to come

The absurdity of the situation only becomes more farcical when you consider that the price of concrete was raised in the Budget. The tax on concrete is a tax on the public, not on construction magnates. If it becomes more expensive to build, the cost is passed on to the buyer and any unaffordable units will simply be snapped up by the government at above market value. The taxpayer loses out but friends remain grateful.

Of course it is a recipe for untold corruption, but it is infinitely worse than that.

We are almost accustomed – to the point of many being immune – to the constant corruption allegations that have engulfed Muscat’s administration but this is market interference at its worst and at its most short-sighted.

Forget for a moment the incentive for unscrupulous people not to pay their taxes. Forget also the almost-open invitation to corruption and favouritism and think about what this short-termism could do to Malta’s property market – when wealth among people and banks is massively tied up in property. Any uncalled for State-meddling in the market could have ripple effects that are felt for years to come.

It is not about this single transaction, it is about the mindset of those in charge of leading the nation and the dangerous precedent it sets for Malta’s economic outlook.

What this administration is planning is the start of what could artificially inflate the market and make it grow at an unsustainable rate. Politically, the administration will reap the immediate quick benefits of a construction fuelled boom but people who should know better are ignoring all the signs that a bubble can burst and seem to be forgetting how quickly a boom can turn to bust.

It is the same signs that were ignored in some countries worst affected by the 2008 economic crisis, where one of the issues faced was the short-termism of politicians desperate not to take accountability. They pushed the ‘bust’ as far down the road as possible, saving their own political skin, sometimes even winning the next election, but condemning a generation years after they were in power, leaving other people to pick up the pieces and untangle the web of mistakes and missed opportunities, at a huge cost to the nation.

It is ignoring the most basic of economic lessons and pushing forward discredited and outdated business and governance models for short-term partisan political advantage.

It cannot be allowed. It is wrong. It is unsustainable and exposes the country to unprecedented economic pitfalls.

Roberta Metsola is a Nationalist MEP.