Prime Minister Joseph Muscat pledged to increase benefits for disabled people who cannot work to a level “at least on par with the minimum wage”.

“The government’s next challenge is to ensure that people who genuinely cannot work have enough money to live a decent life,” he said in a speech to close Labour’s regional congress in Marsalforn. “Workers might consider it unfair that people without a job are earning as much money as them, so we must ensure that these benefits are only given to people who genuinely cannot work.”

He reiterated his call for a national debate on the minimum wage, following a report by Caritas who have urged government to gradually increase it.

“The debate must take into account issues of competitiveness and ascertain the minimum amount of money that people need to live,” he said. “As the movement that introduced the minimum wage in Malta, Labour lead the debate ourselves.”

Muscat pledged “to do all he can” to eradicate poverty, and cited the Caritas report as proof that recent government incentives – such as in-work benefits – to encourage people to find a job are effectively countering poverty.

In his speech, he also outlined his vision for Gozo as an economic powerhouse, pledging that Maltese professionals will opt to work in the sister island following the revamp of its general hospital.

“The new hospital will be better than Mater Dei, it will offer all the essential medical services, and its workers will remain on the government’s payroll,” Muscat said. “People may be skeptical, but I guarantee you that Maltese workers will soon start choosing to work in Gozo, as they will recognize that it offers top-quality jobs.”

The Gozo General Hospital falls within a €200 million private public partnership with Vitals Global Healthcare. The number of beds will increase from 291 to 450, 100 of which will be used for medical tourists. The project will also see Barts Medical School open its first overseas medical campus by the hospital.

Muscat said that Gozo’s economy will continue to grow after tapping into the medical tourism niche, which he described as an “environmentally sustainable market that doesn’t require a lot of construction”.

“The students will live in Gozo for nine months of the year, they will bring their families over, and will create a new market with regards property, transport and services,” he said.

He said that Harvard University has been roped in to advise the management of the hospital, so as to assure US insurance companies that medical standards at the Gozo standards will be on par to those at US hospitals.

Muscat toasted Malta’s economic growth under his stewardship, noting that credit rating agency Moody’s recently forecast this year’s GDP growth at 4.1%.

“Credit rating agencies are to investors what TripAdvisor is to tourists; nobody wants to invest their money in a country with financial problems, a shrinking economy and a government that doesn’t keep its word. A strong economy allows us to increase social benefits and pensions without having to raise taxes, and as such these reports represent the start of a virtuous cycle.”

He said that the recent rise of crude oil to $50 a barrel – its highest in seven months – justifies the government’s fuel hedging policy that has so far seen fuel prices reduced by a few cents every couple of months. The Opposition has repeatedly insisted that fuel should be cheapened so as to match the low market price of oil, claiming that the excess cost was equivalent to the public “paying for corruption”.

“If it were up to Simon Busuttil, we’d have had to increase electricity tariffs and fuel prices this week,” Muscat argued.