Updated Tuesday 9 am
Social partners had mixed reactions to Clyde Caruana’s 2025 budget speech on Monday.
There was broad praise for the move to slash income tax rates, but also concern about the Budget 2025 failure to tackle growing issues such as traffic, overpopulation and businesses.
Chamber of SMES: What about small businesses?
The Malta Chamber of SMEs said while the budget continued energy subsidies and the extension of work-life balance measures, none of its proposals were taken up and businesses were barely mentioned in the Budget document.
“While the SME Chamber welcomes the widening of tax brackets for the lower bracket, the SME Chamber notes that the electoral manifesto promise to reduce tax for businesses from 35% to 25% has for another year not been fulfilled. This continues to place local businesses at a disadvantage when compared to foreign-owned businesses who are effectively taxed at 5%.”
The Chamber said the Budget fell short of addressing serious employment-related issues, such as job-skill mismatches and recruitment challenges.
UĦM: 'Hard-headed' government still taxing COLA
The UĦM Voice of the Workers said the government remained "hard-headed" and continues to disregard the union’s call to stop taxing the COLA increase.
“While the government has reduced the tax, the middle class will not be benefitting any more from those with low incomes,” UĦM said, pointing out how the measure will help around 165,000 workers earning less than the median wage, but not the middle class.
The union said it was surprised that no consultation took place for the measure to add a further year of social security payments for those born from 1976 onwards.
“The budget ignored the health sector, especially on how the government will give back the €400 million to the hospitals, and mentioned nothing concrete regarding traffic.”
Malta Chamber: A budget that fails to address quality
The Malta Chamber of Commerce, Enterprise and Industry said the budget paid lip-service to the push for quality over quantity, but failed to provide necessary measures to address such changes.
“This is a budget that incentivizes consumption but does not address productivity, competitiveness and attractiveness for investors. The focus is on distributing wealth rather than generating it sustainably.”
“While the budget remains a fundamental annual financial planning exercise aimed at reviewing taxes, subsidies, and social benefits; allocating funds for ministries and government projects; and forecasting government borrowing needs, a budget needs to be developed within the context of a comprehensive strategic plan with a broader long-term outlook.”
Gozo Business Chamber: What about the hospital?
The Gozo Business Chamber praised the budget measures introducing an OHSA centre in Gozo and the additional €1,000 grant for scrapping old vehicles in Gozo.
But it was disappointed there was no mention of a new hospital for Gozo.
The Chamber also pointed out how while several investments in Malta were mentioned, there were no mentions of investments in the sector in Gozo.
“The Chamber believes that the Gozo Innovation Hub has a strong potential that is currently underutilized,” the Chamber said.
It praised the investment in the restoration of historical sites, the carnival and the new museum in Gozo.
MEA: More focus on social measures than economic ones
The Malta Employers Association said that, “once again” the budget emphasised social measures over economic measures that push for economic growth.
Tax cuts were being balanced by the introduction of opt-out second-pillar occupational pension schemes, which would channel some of that added income into savings, it predicted.
The MEA said it had no objection to raising public sector employees' work conditions, but said those improvements had to be matched by productivity gains and better accountability.
It also welcomed Malta Vision 2050, but like others, noted that the budget made no concrete reference to how the economy will be transformed through the introduction of new technologies and reskilling.
MHRA: Wage regulations should not shock restaurant sector
The Malta Hotels and Restaurants Association welcomed the budget as it placed significant emphasis on social measures and addressed sustainability, innovation and infrastructure, which according to the association all serve as the backbone for several sectors, including the tourism one.
It also welcomed talks of revising wage regulation orders and emphasized the need for these changes to reflect the realities of the hotel and restaurant business.
“It is crucial that wage regulations do not create shocks in the restaurant sector; they should be evaluated to consider the unique nature of the industry, which often experiences concentrated activity on weekends. Additionally, the principle of equal pay for work of equal value must account for the nature of temporary workers in this sector.”
MUT: Failure to address growth in school populations
The Malta Union of Teachers noted that the budget mentioned a new collective agreement for teachers and work on the 2024-2030 education strategy.
It also noted the emphasis on wellbeing and the importance being given to literacy.
Yet, it said measures to address the growth in school populations and others to address a better work-life balance through the right to disconnect were missing.
Forums Union Malta: A mixed bag
Forums Union Maltin welcomes the income tax reductions and increase in children's allowance to support employees and families. It's also pleased with incentives for retired workers to provide mentoring.
They are disappointed, however, with the 1976 measure that has sparked so much controversy on social media feeds.
Cassola: Will the budget truly improve the quality of life?
Independent politician Arnold Cassola had mixed reactions to the budget.
While he welcomed the extension of tax bands and the increase in children’s allowances, he questioned if these benefits would be enough to cover the rising costs of essential goods and housing.
He said the increase of €2.75 per week for pensioners is an “insult” and that they will not benefit from the widening of tax brackets.
He asked if the widening of tax bands would make up for the exploding cost of living and if traffic jams would disappear on 1 January.
“Will the construction mayhem stop? Will we start breathing clean air on 1 January 2025? My fear is that the answer will be…no.”
ADPD: Government continues to increase public debt
The Green Party said the government continued to accrue debt "without justification" and seemed to have an open door policy to sectors that offer low-paid jobs and exploit workers.
It was critical of a government decision to continue fuel subsidies while not promising any alternative to private cars, such as a mass transportation system.
“There is a need not only for a change for electric cars but also for a modal shift that leads to fewer cars from the roads,” the party said.
“This leads to a better quality of life as a result of changing our attitudes towards transport.”
GWU: Budget promotes work and social solidarity
The General Worker’s Union said it was satisfied with the budget, noting that many of its own proposals had been incorporated into the government’s vision.
What was presented, they said, is a sustainable plan that rewards work and promotes social solidarity.
“The GWU is satisfied that, thanks to the workers’ contributions and the government’s leadership, the current economic situation is fostering growth. This growth leads to increased benefits for workers and all members of Maltese society, helping everyone to move forward,” GWU general secretary Josef Bugeja said.
“Despite the challenges we face, the Government will inject approximately € 550 million into the community, while the country’s deficit continues to decline sustainably. This effort is achieved without raising taxes and by reducing tax rates,” he added.
MDA: Budget lacks ideas and investment commitments
The Malta Developers Association said that while it was pleased to see the budget that continued to support social solidarity but is disappointed by its lack of tangible idea and investment commitment.
It said that its clear that the economic growth generated in recent years, which they say was “substantially” supported by the property industry, had translated into greater wealth distribution for Maltese families.
The MDA said it was pleased to see the first-time buyers, second-time buyers and the urban conservation areas had been extended again.
However, it said that it lacked “tangible ideas and investment commitment”.
“It is good to mention topics like green spaces, better quality of life, clean energy, and infrastructure investment, the MDA made several proposals to address these issues, but since these were not implemented, we are sceptical as to how these goals could be achieved.”
MUMN: Budget overall positive but upgrades needed in health sector
The Malta Union of Midwives and Nurses said that while overall it believed the budget would have a positive and beneficial impact on society, more investment is needed in the country’s health sector.
They said that several areas in the country’s health infrastructure needed to be upgraded, including the emergency department and the ITU.
They also pointed to the bed situation at both Mater Dei and Mount Carmel hospitals as “major issues”.
“MUMN is acknowledging that the foundations for these objectives are being laid so that the issue of bed shortages can be tackled in the next stage when it comes to the upgrading of the health facilities in the country,” the union said.