The world is grappling with economic uncertainty, geopolitical tensions, technological disruption, and environmental challenges. Malta is not an exception.
With the economy showing signs of growth but also facing several risks, the 12 key recommendations of the Malta Employers’ Association (MEA) for the government to consider in the upcoming budget are food for thought. These recommendations touch on economic models, taxation, governance, infrastructure and sectors crucial to the future of the Maltese economy.
While these points address employers’ immediate concerns they also offer an opportunity to reflect on Malta’s long-term strategy to build a socially, environmentally and economically sustainable economy. Malta can create a more resilient, future-proof economy and society by aligning these recommendations with high-value-added industries, reducing reliance on low-skilled immigration, enhancing behavioural and technical standards across sectors, more investment in digitisation and green technologies, and improving governance.
This is my analysis of the MEA’s recommendations in the context of these broader objectives.
Economic, social model
One of the central recommendations from the MEA is the need for a more comprehensive economic and social model. While economic growth is essential, the focus should not only be on GDP but also on the broader social and environmental impact. Malta must develop a model that prioritises inclusivity, reduces inequality and promotes long-term sustainability.
In practice, this means expanding the economy beyond traditional sectors like tourism and real estate, and investing in knowledge-driven industries such as technology, research and development (R&D) and green energy. These sectors can provide high-value jobs, reduce dependence on the big number of low-skilled immigration, focus on excellence, and increase Malta’s social cohesion and competitiveness in the global economy.
Balanced taxation
While the MEA advises against revising tax bands at this moment due to the risk of increasing the deficit, there is still an opportunity to implement smart taxation reforms that can stimulate growth in key sectors. For instance, the government could offer more tax incentives for businesses that invest in green technologies or digital infrastructure that solve local issues, like inefficiencies in public governance, and better noise, traffic and space management.
Additionally, these reforms should be carefully designed to avoid overburdening low-income workers, ensuring that taxation remains equitable while promoting growth in strategic sectors.
The government should introduce targeted tax incentives that reward businesses for making locally-focused and export-oriented sustainable and innovative investments. At the same time, a balance should be reached to maintain protections for lower-income workers by avoiding broad-based tax increases that could exacerbate inequality.
Building the future
The MEA calls for capital expenditure on infrastructure, which is essential to support a growing, modern economy. However, rather than simply focusing on traditional infrastructure projects, such as roads and bridges, the government should prioritise investments in digital infrastructure, renewable energy grids, and smart city projects. These projects would support Malta’s long-term economic competitiveness and align with sustainability goals that are becoming more important than ever for growth purposes in the EU and beyond.
Workforce rationalisation
The MEA’s emphasis on workforce rationalisation is particularly relevant in an era where automation, artificial intelligence and digitisation are reshaping the labour market, and which will be impacting directly the number of workers required for existing jobs. While Malta’s economy has historically relied on immigration to fill labour shortages, this is not a sustainable solution for a high-density country, and a high-value-added economy. Instead, the focus should be on upskilling and reskilling the domestic workforce, investing aggressively in AI and high-end technology, particularly in digital and technical fields.
This can be achieved through partnerships with private sector companies and educational institutions. An example of this is South Korea, which is changing its education curriculum towards AI because it understands the future belongs to those who embrace AI technology.
Tourism and beyond
Tourism has long been a cornerstone of Malta’s economy, but the MEA’s recommendation to re-examine the sector is timely. With rising concern about over-tourism and its environmental impact, the future of Malta’s tourism industry lies in quality rather than quantity.
Unfair advantage undermines investor confidence- Stefan Gauci Scicluna
Malta should aim to attract higher-spending, eco-conscious tourists rather than simply increasing accommodation capacity. As an example, one should look at Denmark, which has invested heavily in higher-value, innovative cuisine to attract tourists from all over the world who are prepared to spend money to experience innovation.
It’s becoming more important to shift the focus to sustainable tourism by encouraging the development of eco-friendly resorts, renewable energy-powered accommodations, and initiatives that promote cultural and environmental preservation.
Green maritime transport
The MEA highlights the need for a strategy in the maritime transport sector. This sector has the potential to contribute significantly to Malta’s economy if aligned with green objectives. Investments in sustainable maritime transport, such as electric ferries and eco-friendly port infrastructure, could reduce emissions and position Malta as a leader in green maritime technologies.
This is where investing in green maritime technologies, such as electric vessels and sustainable port infrastructure, would be more important to reduce the environmental footprint of the maritime sector and create new economic opportunities.
Protecting local produce
The MEA’s recommendation to allocate more resources to agriculture is important, particularly considering concerns over food security and the environmental impact of excessive development. Sustainable agriculture practices can protect Malta’s fertile land while ensuring a steady supply of local produce. Encouraging farmers to adopt sustainable practices through financial incentives and training programmes would obviously help in this regard.
Trust and efficiency
One of the most critical recommendations from the MEA is the need for improved governance and transparency. Better governance practices are essential to ensure that public resources are used efficiently, and that corruption is minimised. This is especially important in areas like public procurement, where transparency can attract higher-quality investments, foster competition and reduce public sector waste.
Party financing
The MEA’s call for greater regulation around political party financing is essential for reducing political interference and ensuring fair competition. Unfair advantage undermines investor confidence and can lead to inefficient use of public resources, particularly in sectors critical to Malta’s future, such as digital technology and renewable energy.
I believe it is time for stricter regulations around political party financing, including transparency in donations and spending. I also think that the issue of public funding of political parties should be explored further as soon as possible. This would help reduce the risk of special interests influencing government decisions and create a level playing field for all businesses.
Sustainable future
Malta’s economic future depends on making strategic investments in high-value-added industries, fostering innovation and embracing social and environmental sustainability.
I think that the MEA’s recommendations provide a solid foundation for discussion, and they must be aligned with broader national goals, such as social cohesion between Maltese citizens and foreigners, digitisation, green technology and improved governance.
By investing in these high-value and more stable areas, Malta can build a more resilient economy that benefits all sectors of society and ensures long-term prosperity.
The future of Malta’s competitiveness lies in embracing technology and innovation, improving transparency and fostering collaboration between the public and private sectors.
Stefan Gauci Scicluna is a finance and management lecturer.