Malta Chamber insists on economic ‘reset’, says growth relies too much on labour imports
The Malta Chamber on Monday called for a fundamental economic reset in its pre-Budget 2027 document, warning that Malta’s growth has relied overwhelmingly on importing labour rather than improving productivity, and that public trust in institutions has been eroded by weak enforcement and a lack of accountability.
Launching the organisation’s document, titled Reset and Lead, Chamber President William Spiteri Bailey said Malta had reached “a point where adjusting around the edges is no longer enough,” and that the country needed the courage to reset what was not working while leading through the realities it faces.
The document, which contains more than 150 proposals split across two sections, argues that Malta must shift “from volume to value” – moving away from an economic model built on continuously expanding the workforce and towards one driven by productivity, skills and higher value-added activity.
Central to the argument is a call for government to overhaul the work permit system rather than import additional labour. Spiteri Bailey said the Chamber was “not asking to import more labour,” but instead wanted administrative waste removed so that people already living and working in Malta could be better used. He cited the case of third-country nationals left unable to work for weeks after changing employer purely because of bureaucratic delays, describing the removal of such obstacles as a productivity measure in its own right.
The Chamber’s economic case rests heavily on data showing that Malta’s growth has relied disproportionately on adding workers rather than raising output per worker. According to the document, gross value added grew by 81.9% with 68.9 percentage points of that growth attributable to an expanding workforce, 9.9 points to a shift towards higher value-added sectors, and just 3.1 points to genuine productivity improvements.
The Malta Fiscal Advisory Council’s own projections, cited in the document, illustrate the scale of the dependency on labour supply. Sustaining economic growth of around 4% would require approximately 14,000 additional workers every year if productivity remains close to its historical trend. If productivity growth were to rise to 3%, that requirement would fall to around 6,000 workers annually- underlining the Chamber’s argument that productivity, not headcount, should be the priority.
The document sets out a series of structural concerns underpinning that argument. Labour market participation rose from 70.6% in 2016 to 82.6% in 2025, while female participation climbed from 58% to 75.5% for further expansion through participation alone. Unemployment stood at 3.3% as of July 2026, while Malta’s job vacancy rate is put at three times the EU average, pointing to a labour market under sustained pressure.
Skills gaps also featured prominently. The document points to weak performance in core competencies – mathematics, reading and computational problem solving – with Malta scoring 24 points below average in Mathematics, 46 points below average in reading, and 37 points below average in computational problem-solving. It notes that three in ten people barely reach baseline proficiency, while fewer than one in ten reach the highest levels of attainment, with no improvement recorded between 2022 and 2025. Research and development investment is put at just 0.54% of GDP.
The Chamber further highlights a widening gap between wage and productivity growth. Compensation in Malta is projected to rise by 4.4%, while labour productivity growth is forecast at just 0.1% – compared with a projected EU average of 1.0%, a divergence the Chamber argues threatens competitiveness if left unaddressed.
The energy policy drew some of the most pointed criticism in Spiteri Bailey’s speech. He said the Chamber had long argued that blanked subsidies on fuel and energy could not be a long-term solution, acknowledging that the government’s intervention had protected families and businesses but questioning what had been done in the intervening years to reduce Malta’s exposure to future shocks. Had even part of the substantial sums spent on subsidies instead been directed towards renewable energy, efficiency, storage and resilience incentives for households and businesses, he said, Malta would be less exposed to international energy shocks today. He warned against a pattern of spending heavily to manage the consequences of a problem without investing sufficiently in reducing the problem itself.
Beyond economics, the Chamber framed institutional reform as inseparable from economic policy. Spiteri Baileysaid institutions existed to serve the public, not governments, political parties or individuals, and called for regulators to regulate, enforcement authorities to enforce, and the courts to deliver justice within a reasonable time. He argued that inconsistent enforcement penalised ethical businesses that followed the rules, and said transparency around public spending should be automatic rather than something extracted from Government. Malta, he said, was good at producing strategies, reports and recommendations, but weaker at implementation, adding that “a strategy without execution is simply a document” and that accountability without consequences was not accountability at all. Trust, he said, has economic value, and its loss carries an economic cost.
The proposals document itself is organised into two sections. Section A covers measures the Chamber wants implemented within the first year of the coming legislature, spanning funding and taxation, investment support, human resources and education, technology and artificial intelligence, infrastructure — including planning, mobility, energy, water and waste — tourism, market distortions, EU and island-state issues, and internationalisation. Among the specific measures proposed are venture capital tax credits, a student voucher system for post-secondary education, incentives for students pursuing STEM and healthcare courses, a comprehensive electronic medical records system, and an export readiness fund to support domestic businesses expanding abroad.
Section B sets out longer-term structural reforms the Chamber wants pursued through to the end of the legislature, covering planning and construction, mobility and transport, energy, waste management, digital transformation, education and skills alignment, public procurement, pension sustainability, and public governance and parliamentary reform. These include updating Malta’s Strategic Plan for Environment and Development, introducing a national architecture and landscape policy, enacting a long-delayed Fire Safety Act, and moving towards liberalisation of energy distribution and supply after 2035.
Spiteri Bailey said that none of the issues raised were being aired for the first time, noting that the Chamber had repeatedly flagged them across successive budgets and governments. Acknowledging Malta’s shortcomings, he said, was not talking the country down but a necessary precondition for fixing what was not working. He framed the document’s call for reform as a national rather than partisan position, saying it belonged to neither the Labour nor the Nationalist parties but to Malta as a whole, and urged Government to move from complacency to accountability and from announcement to execution.
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