Clyde Caruana's 2023 budget speech on Monday was met with support for government's efforts to cushion the country from inflation and rising energy prices, but criticism that it fell short of delivering fresh ideas for a long-term economic vision. 

The Malta Chamber of Commerce said it had been expecting “more ambition” in the area of sustainability and the budget was simply a continuation of the current economic model - with all its strengths and weaknesses. 

The Chamber added that it was positive that the government was acknowledging the persistent traffic problem and was seeking to limit the circulation of service vehicles before 9am. 

It remarked that a longer-term vision for the country is necessary to maintain economic stability. 

“The bulk of proposals are actually directed at maintaining spending power rather than improving quality of life. While subsidising energy and maintaining spending power is good for business, the country needs a longer-term strategy to be future-ready,” they said.

"We would also have liked to see more tangible support with respect to innovation and new economic niches that can guarantee sustainable economic growth."

'More needed for challenges facing businesses'

While commending the government for extending the safety net on international energy price hikes, the Chamber of SMEs said that more action is needed to tackle other challenges faced by businesses. 

“When it comes to SMEs this budget is simply a continuation of the 2022 budget,” they said in a statement. 

“Disappointingly, the budget fails to effectively tackle other major challenges which are choking businesses. Very serious issues have merely been given a mention in this budget speech, which falls too short of the action that Malta should be taking at the moment.”

Citing an employment crisis, bureaucracy and impossible traffic as serious issues affecting productivity, the Chamber said that these merited more than a passing mention and that solutions are needed immediately. 

Employers commend budget of ‘stability’ 

The Malta Employers Association said that the government's decision to focus such a large chunk of the budget on shouldering the increase in fuel and energy prices is crucial in ensuring economic stability and price competitiveness in the country.

“This is fundamental in a global scenario where many countries are experiencing rates of inflation which have been unheard of for more than 40 years,” the MEA said.

However, it cautioned discipline in public spending and to "curtail unnecessary expenditure such as unproductive employment in the public sector and extravagant activities of dubious national benefit."

While the budget addresses immediate issues, the MEA said that this must be accompanied by a long-term economic vision for the country. 

Photo: Jonathan Borg

'Keep Air Malta flying'

In its reaction to the budget speech, the Malta Hotels and Restaurants Association commended the government’s €600 million investment in the energy sector, calling it the “most important budgetary measure towards ensuring the continued sustainability of the tourism industry.” 

Noting that air connectivity is integral to a successful tourism sector, MHRA president Tony Zahra stressed that it is imperative that the national airline Air Malta continues flying without any interruptions. 

With reference to the measure to restructure the Tourism Zones Foundation, Zahra said that urgent attention must be given to ensure better upkeep and cleanliness in tourism areas. 

The association also welcomed investment towards infrastructure and was pleased to note that work on the ITS campus would begin next year, as labour supply remains “a critical success factor” in the tourism industry. 

Teachers want better salaries

The Malta Union of Teachers said that it is satisfied that the government made reference to a new sectoral agreement for educators in the budget speech, saying that it is crucial that this important electoral pledge is fulfilled. 

“MUT calls back to the electoral pledge, that is now on the government agenda, to substantially better salaries and conditions for educators. We look forward to the start of these negotiations,” the union said. 

The MUT also welcomed initiatives to increase public sector employees’ wages and the cost of living allowance. 

The UĦM Voice of the Workers trade union welcomed measures aimed at cushioning the impact of inflation, but like the other bodies, it complained of the absence of a long-term economic vision and environmental measures.

It welcomed the fact that the government had taken on board measures it had proposed and other unions had supported,  to protect the relativity of public workers' salary in the high inflation scenario.

The union said the budget did not say how investment could be attracted to new sectors. Nor were there any proposals to ease traffic congestion, increase public spaces or increase workers' training.

The union regretted that no further improvements were announced to the work-life balance.