The country urgently needs a cohesive economic vision with clear milestones and deliverables, CEO of the Malta Chamber of Commerce Marthese Portelli said.
She spoke during the presentation of its Pre-Budget 2025 document titled ‘Time up’.
The Malta Chamber is urging the government to ‘connect, plan and reform’.
Accompanied by President Chris Vassallo Cesareo and several Council Members, Portelli emphasized that while economic indicators like GDP growth, per capita income, and unemployment rates are important, “they often fail to capture the broader societal costs of pursuing growth at any cost – a hallmark of the current economic model.”
She stressed the importance of shifting from a superficial assessment of economic performance to a broader and deeper analysis of the population’s well-being, now and in the foreseeable future, “to ensure that economic policies prioritise sustainable development and enhance the quality of life for all citizens.”
Portelli further highlighted the need for diligent management of taxpayer funds, underscoring the Government’s obligation to ensure a good return on investment and “avoid wasteful spending that provides little or no value to taxpayers.”
In his opening statement, Chamber President Chris Vassallo Cesareo stated that it is crucial to move away from labour-intensive activities to an economic model that is not dependent on population growth. It is also critical to invest in worker training and upskilling, as well as to invest in technology to boost efficiency and increase productivity, he said.
The Malta Chamber identified 12 key policy areas requiring urgent attention, with three critical proposals outlined for each. The 12 key policy areas are: 1. Competitiveness 2. Fiscal Discipline 3. Utilities 4. Renewables 5. Traffic Congestion 6. Sustainable Tourism 7. Planning and Upkeep of Public Areas 8. Value-Added Employment 9. Third Country Nationals (TCNs) 10. Low Income Earners and Pensioners 11. Public Procurement 12. Proper Enforcement of Laws and Regulations.
With regards to ‘Traffic Congestion’, the Chamber said that the overarching goal is for a strong infrastructural foundation to address the root cause of the problem, instead of expanding road networks to accommodate more private car commuters, whilst improving a mass transport system. This may be done through the Introduction of an “e-mobility wallet” by which the government allocates an annual amount to every e-wallet to be used for various environmentally sustainable or shared transportation options by land and sea, it said. Following the introduction of parking fees in central urban areas, the fees paid would be returned to e-mobility wallet for use of sustainable means of transport. Furthermore, the Transportation Deduction Act to encourage more car-pooling should have its number of pooling employees decreased and an overall improvement of the public transport service for all workers, it said.
For ‘Sustainable Tourism’ though Malta is a unique destination, to remain competitive against other competing Mediterranean countries quality should be sustained throughout the supply chain, the Chamber said. It added that a moratorium on applications for tourism accommodation to prevent oversupply and boost quality is recommended, as well as clear policies for encroachment with no room for interpretation.
When it came to ‘Planning and Upkeep of Public Areas’, the Chamber said that: “the ad hoc planning approach adopted over the years has uglified Malta” and for this reason SPED 2015 must be reviewed immediately and in tandem with a review of clear planning policies which align with it. Furthermore, it recommended that systematic, cleaning is necessary and ideally more centralised as it is currently “sporadic” and under a number of governmental remits, it said.
With the aim of a new economic model for Malta pointing towards a high value-added economy, the Chamber said that Third Country Nationals (TCN’s) must be capped by a percentage that the business can employ, unless such work is essential such as for the healthcare system. This will, “Ensure the right balance between human resource needs and the country’s capacity to accommodate them sustainably”, it said. Furthermore, whilst temping agencies must be continuously monitored, employment licenses should be extended by 3 years under a permanent employer, it added.
The Chamber also recommended that Low-Income Earners and Pensioners should receive targeted assistance to those that need it, rather than distributing handouts such as the infamous pre-election cheques. It added that the COLA should not be taxed.
For proper enforcement of laws and regulations, the Chamber recommended “Proactive, co-ordinated and unselective enforcement at all levels” and the taking of the European Commission’s July 2024 Rule of Law report seriously. Furthermore, it called for a clamp down on the “culture of clientelism” and the lack of transparency.
For ‘Competitiveness’, the Chamber said that currently, legitimate businesses are being penalised whilst those operating illicitly are being rewarded, “when it should be the other way around” and leading to an uneven playing field. It said this must be addressed. This tied in to the point of ‘Fiscal Discipline’ which aims to improve tax collection, reduction of and more value-added public spending, “while ensuring a more sustainable economic growth safeguarding a level playing field in the interest of all” by the government and public sector and not just by “well-intended consumers and legitimate businesses,” it said.
The Malta Chamber conveyed a strong sense of urgency, calling on the Government to move “beyond mere listening and adhere to principles of good governance.”
“The erosion of good governance is severely impacting ethical businesses and society at large. Government must decisively address unethical practices that undermine fair competition due to inadequate enforcement. Ethical businesses have had enough of this unfair competition,” Portelli asserted.
This year, The Malta Chamber’s focus is twofold, it said. “First, the tangible transformation of the current economic model into a well-being economy that benefits society as a whole; and second, the elimination of unethical operators whose misconduct is undermining ethical businesses.”
The Malta Chamber said that it has consistently raised these issues in various fora year after year. While there have been sporadic improvements, much work remains to be done.”
Of the 219 proposals submitted last year, it said, only 1.8% have been fully implemented, 18.7% have been partially implemented, while 74.9% remain pending without a decision. It said only 4.6% were rejected.
The Malta Chamber of Commerce, Enterprise and Industry reiterated that over the past years, it has presented numerous documents and proposals, consistently highlighting concerns and offering solutions.
The Malta Chamber insists that “Time is up” and that Government needs to go beyond ‘listening’. “Timely action to address genuine concerns is required. Weak policy responses to major red flags have induced a culture of complacency and lack of healthy ambition within the public sector that is impacting the performance of businesses and ordinary citizens as well. Critical issues need to be dealt with expeditiously: CPR is called for.”
The Malta Chamber of Commerce’ full pre-budget document can be read here