Malta Employers Unveils Proposals for Economic Transformation Ahead of 2026 Budget

As the country prepares for the 2026 budget, the Malta Employers Association today announced a suite of forward-looking proposals designed to steer Malta towards sustainable economic transformation — one that strengthens competitiveness, supports social well-being, and aligns with the country’s physical and demographic realities.

President Ivan Refalo explained that “Our vision extends far beyond short-term fiscal adjustments and immediate employer interests, focusing instead on securing Malta’s long-term competitiveness and social well-being.”

The Association said that Malta should aspire to smart economic growth through the integration of productivity-enhancing investment, innovation, education and training.

Driving Economic Transformation

Long-term economic transformation must start with Education because people are the Islands’ only national resource.  Smart economic growth requires a radical transformation in the country’s education system – one which extends to the educator.  a renewed emphasis is required transversal skills as opposed to rote learning and exam-based teaching, focusing instead on transversal skills, adaptability, digital agility, and critical thinking.  The teaching profession must be supported and valued through continuous professional development. Moreover, work-based learning should be expanded across all levels of education, giving students real exposure to the workplace, teamwork, communication skills, critical thinking and practical problem-solving.

Commenting on an increasing trend whereby employees are resisting training, the Association called for Budget measures for employers and employees to invest in lifelong learning, upskilling, and quality assurance to strengthen workforce adaptability and innovation.

Director General, Kevin J Borg explained that in tandem with Education restructuring, Malta’s economic transformation required targeted incentives to boost productivity, especially through investment in digital tools and automation, thereby enhancing resilience and quality across both new and traditional sectors.  Statistics show that Malta’s economic growth relies on labour productivity to a much higher extent than capital.  This may and needs to be reversed through the appropriate Budget measures to incentivise investment in digitalisation, automation, AI, and robotics across all sectors. These technologies are the foundation of Malta’s next leap in competitiveness, resilience, and value creation within new and traditional sectors alike.

Sectoral Proposals

Key amongst Malta’s traditional sectors in manufacturing where the above technologies and re-skilling may significantly contribute towards overcoming current pressures on operating costs which are intensifying due to labour shortages and international dynamics.

With respect to Tourism – another key traditional sector – Malta Employers called for quality enhancement and sustainable planning to align growth with the Islands’ carrying capacity and ensure a positive visitor experience.

Whilst recognising Malta’s reliance on maritime transport, the Association called for further investment in maritime freight infrastructure to address current bottlenecks and anticipate future demand.

Looking further ahead, Malta Employers supports the call for the development of a regional logistics hub that would leverage the Islands’ strategic location and attract the business of multinational operators.  A project of this type and magnitude can support Malta’s economic diversification reinforcing the Islands’ role as a maritime and trading gateway in the Mediterranean.

Addressing Socio-Economic Challenges

Malta Employers has consistently advanced policies that address Malta’s demographic and socio-economic challenges.  In the context of Malta’s declining birth rate, the Association continued to call for a national, cross-sectoral response. “Family-friendly fiscal measures, childcare and parental support infrastructure, and flexible work arrangements must form part of a holistic plan to make family life more compatible with professional aspirations” it said.

At the other end of the demographic spectrum, Malta’s ageing population must be seen not as a burden but as an opportunity and a partial solution to Malta’s shortage of talent. Older workers should be encouraged — on a voluntary basis — to remain active through fiscal incentives, retraining schemes, and flexible work arrangements. This approach will benefit workers, employers, and the national economy alike.

“The National Budget is not just an accounting exercise — it is the government’s annual opportunity to translate national vision into tangible outcomes.  Malta Employers stands ready to work hand-in-hand with the policy makers and social partners to chart a sustainable, competitive, and inclusive future for Malta” it concluded.

The full text of Malta Employers 2026 Budget Proposals document is available on this link:
Proposals-for-National-Budget-2026.pdf

ENDS

14 October 2025