At long last, an editorial (Times of Malta, November 1) which really goes to the core of the serious property and development problem in Malta. And notice I boldly present it as a national problem whereas those with vested interests will erroneously keep on harping that we are talking about a national asset.

The main virtue of the editorial is that it shows how wrong we – as a nation – have been about the economics of the whole thing and this mainly because we choose to keep on pumping national assets into an activity that is not producing adequate return and this simply because of an unclearing market.

It is indeed worrying that there is €5 billion worth of vacant property (Bicc estimate). Nobody is calculating the opportunity cost of this pile of national money, the cost of work time involved, national stone and other materials and other form of investment incomes totally lost. All we are putting into the calculation and looking at (typically only short term and as far as our noses) is the sales or rental incomes, even if foreign sourced, which so-called development is alleged to produce. And, naturally, all of that at the expense of not only what I have just mentioned but also the environmental damage and the ever-increasing uglification of these islands (because the disaster has now solidly encompassed Gozo too).

I have argued here and elsewhere before that there is now only one way left out of this self-inflicted morass. The sooner the powers-that-be in Brussels wake up and impose it upon us – even as part of their now unavoidable hold on what we do or do not do in our national budgeting – the better for all concerned. This is via taxing long-held unutilised and/or vacant property.

In a small country like ours property cannot be given the same status as antiques

Even if the number of such properties is not 72,000, but half that number, there is still a dire need for getting this stranglehold on our national economy out of its present state of stagnation and into the productive part of the same economy.

As I once wrote, in a small country like ours (beset by lack of badly-needed open spaces and daily becoming ever more ugly, Mistra and St Julian’s being the latest examples) property cannot and shouldn’t be given the same status as racehorses, jewellery or antiques. Its ‘collecting and retaining unused’ must become activities subject to hefty taxes for the grave external diseconomies that it is causing.

I had designed a blueprint of at least one form of such property tax that can be brought into effect by any government in Malta and both parties are aware of my documented model.

It starts from a proper (location, owner, form of title and current registered use), and constantly updated, de rigueur cadastre of every single piece of property that make up the Maltese islands and then proceeds into a permission to sell licensing system where owners establish and declare their wanted price, this, however, only being valid for a period of three years.

If the property remains unsold at that or any other price after the three years, then renewal of the selling licence will only be made for a further two years and with the permitted price having to be reduced by at least 25 per cent... and then further annual compulsory renewals for periods of only one year with the price having to be cut by 10 per cent every year.

Just imagine the earthquake, but a positive one, that such a system would bring to the whole property scenario in Malta. Just imagine all the blubbering estate agents, the so-called tourism operators, the MDA, architects and notaries, all saying that this will kill them (and their employees).

They will oppose such a scheme with as much might and media clout as they can. And, of course, they will also use the lobbying strength of their connections with all sides of the political spectrum to the limit.

Yes, I know, this is path-breaking, indeed revolutionary thinking but then I have always refused to think within the box but always outside of it. And, by the way, right from the official launch of such a system being put in place, two things will start to happen: (a) property sales will start picking up and (b) the Government will rake in nice sums via the licensing for our ever-bleeding Budget from the new tax.

I may not live to see it happen but, as sure as eggs are eggs, it is coming. It only needs honest, brave, forward-thinking and intelligent politicians to decide to put it in place and implement it seriously.

John Consiglio teaches economics and banking regulation at the University of Malta.