Social partners had mixed reactions to Clyde Caruana’s 2024 budget speech on Monday. They were happy with the government’s decision to retain energy subsidies but said the speech fell short of providing a long-term vision for the country.

The Malta Employers’ Association said it expected a sharper focus on restructuring Malta’s economy for a more sustainable and competitive future. 

While it praised incentives for pensioners to remain active in the labour force - where pension top-ups are being given -  the employers’ lobby pointed out the budget’s lack of emphasis on investment in vocational skills and tourism.

The MEA said it was also unimpressed about its members having to fork out almost €13 a week per worker in the cost of living allowance (COLA) and warned that the ‘unprecedented increase’ could affect many businesses negatively and may fuel further inflation.

A deceitful and ‘treasonous’ budget

The UĦM Voice of the Workers said it was “very disappointed” that the government did not accept its request to no longer tax COLA. The union was one of several social partners that had called for the COLA to be tax free.

The union also complained that the government deceived trade unions after it promised to introduce a mechanism to adjust COLA for employees in the public sector. 

“While the government did not find funds for measures proposed by UĦM, it had no problem spending more than €500 million on the hospitals agreement,” the union said with regard to the Vitals/Steward hospitals deal recently struck down by the courts. 

The Forum Unions Maltin also said it felt betrayed and described the budget as a “treasonous” one.

It too said it was upset that public sector workers would not get COLA increases.

“It is clear that the government has not kept its word and betrayed workers,” President Paul Pace said.

“This is a big blow for all workers against the backdrop of an unbridled cost of living.”

What about small and medium businesses? 

In a brief statement, the Chamber of SMEs praised the government’s focus on maintaining energy subsidies, but said SMEs should have been given a more prominent role in the budget.

While it was important to target high-value sectors to attract economic growth, the government should not forget that the absolute majority of businesses that contributed to the Maltese economy were small and medium-sized businesses, it said. 

On the other hand, The Malta Chamber of Commerce said that the budget was another missed opportunity to introduce concrete measures to disincentive private car use in congested areas and during rushed hours. 

During the budget speech, Caruana said the government is 'finalising a plan' to reduce rush hour traffic. 

The Chamber said it was glad to see a focus on maintaining energy subsidies and helping lower-income families but it was concerned about a growing "subsidy culture".

"Subsidies now constitute such a substantial portion of our GDP that our economic growth is being fuelled largely by subsidies," it says, warning that the government was creating a culture of dependency by doing so.

What about education?

The Malta Union of Teachers (MUT) began their statement by asking:

"Where is the vision of the education sector in the 2024 budget?"

The union said that the budget fell short on new initiatives for the education sector, highlighting how the only three items related to education mentioned in the speech - the National Education Strategy, laptops for Year 7 students and the completion of infrastructure work on a number of schools- were already announced. 

The speech failed to mention whether the government would provide a relativity adjustment for COLA for its employees in the public service and the public sector.

The Union of Professional Educators (UPE) dubbed the Budget as "irrelevant to education" and that there were no measures for educators.

A fair budget...for who? ADPD

ADPD, the Green Party said the increase in the minimum wage was in the right direction but far from enough for those who needed help for a decent living.

It was also not convinced that subsidising everyone’s energy bills was the best way to spend public money.

While basic and essential consumption of electricity for homes should continue to be subsidised, subsidies to others should be revised, with money saved reinvested in areas such as education and the transition to renewable energy, APDD chairperson Sandra Gauci argued.

Nothing specific to help the tourism industry

The Malta Hotels and Restaurant Association (MHRA) said that the Budget speech failed to mention any particular initiatives in relation to tourism. 

"MHRA reiterates that the government needs to revise the tourism policy for next year and ensure that existing incentives for more hotel developments are discontinued," president Tony Zahra said.

The statement highlighted that labour staff shortages will remain one of the sector's biggest challenges and that nothing was said to put the union's mind at rest.

Good but not enough - Gozo Tourism Association

The Gozo Tourism Association noted that the Budget aimed to cushion the economic challenges while safeguarding and sustaining economic growth.

It continued to subsidise the increase in the price of energy and cereals, measures that besides helping families, will also keep businesses afloat.

It acknowledged the measures aimed to curb over-development in Gozo but said it should have included more measures that steer Gozo towards economic prosperity while protecting the island’s unique characteristics.

The association said the Budget included a measure it piloted, intended to attract long-stay tourists to the island, particularly between November and March.

Moreover, the Gozitan tourism product stood to gain from the €58 million being allocated to Gozo from the Sustainable Urban Development fund under the ERDF regulation. 

Budget lacks green building incentives - MDA

The Malta Developers Association said it is satisfied to see the extension of existing incentives pertaining to the property sector, particularly the schemes offered to first-time and second-time buyers.

However, it was disappointed at the absence of new incentives aimed at encouraging sustainable development, notably incentives related to green buildings.

The MDA was also concerned about the lack of measures to address bureaucratic inefficiencies that impeded progress and failed to yield value. 

'Dangerous deceit' - ABBA

The Budget was just "dangerous deceit" to stop the haemorrhage of PL voters, political party ABBA said in its reaction.

The PL was facing a disastrous European Parliament election result and this seemed like a pre-election Budget, it said.

Germany, it noted, declared a bigger than expected deficit for the coming years and this would strongly and directly affect the other EU countries, including Malta.

But rather than telling the Maltese what they should be hearing, that there were tough economic times ahead, the government was saying the opposite to justify its existence in the administration of the country.

Such madness could lead the current alarming deficit to explode. This, ABBA said, reflected a populist governance that hid the truth from the people.