Constituted Bodies have issued their initial reactions to Budget 2026.

Budget 2026 increases disposable income for Families, supports Businesses to embrace AI, but Leaves Traffic Congestion Issues Unresolved - The Malta Chamber of Commerce

The Malta Chamber of Commerce, Enterprise and Industry welcomed the Budget's focus on supporting families and improving their disposable income, as well as the social assistance for pensioners and vulnerable persons.

The Malta Chamber also welcomes the measures aimed to address the business community's transition towards AI adoption, automation, and digitalisation, as well as the continued investment in employee training.

"These initiatives align with The Malta Chamber's long-standing call that digitalisation should be prioritized in order to increase productivity and competitiveness on an international level. The 60% capital investment tax credit, the tax write-off incentive, the widening of the micro-invest scheme and the 175% R&I deduction create strong levers for companies to (i) adopt automation, (ii) take up AI and (iii) invest in strong cybersecurity frameworks aimed at modernising their operations and improve supply-chain visibility, intended to increase efficiency and efficacy," it said in its reaction to the Budget.

"Other areas where The Malta Chamber's advocacy has borne fruit include Government's commitment to establish a new logistics free zone near the airport directly linked to the Freeport - this is a strategic step toward positioning Malta as a Mediterranean hub for trade, distribution, and re-export."

With respect to clean energy, The Malta Chamber acknowledges the introduction of a revised policy in respect of photovoltaic installations on industrial rooftops. "However, the Budget stops short of outlining a comprehensive strategy for cleaner energy and long-term sustainability, which remains a national priority and to meet our EU obligations."

Despite these positive elements, The Malta Chamber believes that Budget 2026 represents a missed opportunity in several critical areas.

It said that the Budget fails to address Malta's chronic traffic congestion, which continues to have a daily negative impact on families, productivity, and business operations.

It said that public procurement reform remains unaddressed.

It said that the decision to tax the Cost-of-Living Adjustment (COLA) undermines the intended purpose of this measure, which is to help employees maintain their purchasing power amid inflationary pressures. It also said that the continued postponement of the auto-enrolment with an opt-out mechanism for occupational pension schemes marks yet another missed opportunity to strengthen Malta's long-term pension sustainability.

"From a macroeconomic standpoint, the Budget's restraint deserves recognition. No new consumption taxes or import duties were introduced, ensuring inflationary pressures remain contained and consumer purchasing power stable. However, the increase in public debt, puts pressure on hitting the forecasting of GDP growth to maintain a reasonable debt-to-GDP ratio. Any increase in debt should be on capital investment which gives the country the return on investment (ROI) required for increased productivity, enhanced competitiveness and a better quality of life for all."

 

Malta Employers Association says Budget 2026 balances social measures, falls short on addressing significant sectoral issues

The Malta Employers' Association's initial reactions have acknowledged Budget 2026 as one that "judiciously balances the country's social imperatives with measures designed to enhance productivity." Simultaneously, it noted that more must be done to acknowledge demographic challenges, support the environment and education, and improving tourism.

The Malta Employers said that this Budget aligns with the country's economic vision for 2050 and the guiding principles of the Draghi report - both of which speak of the importance in resilience and innovation.

It welcomed the announcement that Malta is expected to emerge from the excessive budget deficit procedure placed onto Malta by the European Commission by the end of 2026. It commended that this "fiscal progress is being driven by stronger efficiency in tax collection."

The Association spoke positively of the productivity enhancing measures announced during Monday's budget, saying that these policy instruments are consistent with the Draghi report's calls for increased competitiveness, improved economic resilience, and accelerated technological adoption.

Such measures include the accelerated write-off scheme, a tax write-off over a two-year period for qualifying AI expenditure, digitalisation incentives, cybersecurity, associated professional training; an expanded Malta Enterprise Microinvest Scheme with extended tax credits; and a profits reinvestment measure to introduce a 60% tax credit on qualified investments executed in the next two years, with the credit realised over four years at 15% annually.

On the subject of economic diversification, the Malta Employers welcomed that the government is considering establishing a free-zone logistics hub at the airport area. It acknowledged the increased eco-contribution paid by tourists, from €0.50 to €1.50 per night spent in Malta, but stated that it "expected more concrete e measures and direction towards increasing quality and enhancing visitor experience through improvements in the general environment, friendliness, professional service, relevance and upkeep of attractions."

The Malta Employers commented that in Budget 2026, "there does not seem to be any concrete commitment to steer away the economy from excessive construction to other sectors."

While it commended increased public expenditures towards education, the Malta Employers criticised that "the Budget Speech falls short of announcing tangible measures in the area of reviewing Malta's Education system to support an economic transformation that the country requires."

The Association praised the "generous" tax credits for parents, but observed that Malta's low and declining birth rate "requires a national, cross-sectoral response." The Malta Employers called for a holistic plan to accompany Monday's announced measures that includes awareness-building initiatives, incentives for flexible work arrangements, and stronger childcare and parental support infrastructure to support parents with professional aspirations.

While praising measures encouraging the voluntary extended participation of older persons in the workforce, it concluded that Budget 2026 falls short of "ironing out the remaining fiscal anomalies that encourage people who have accumulated enough social security contributions to exit the labour force at the age of 61." It stated that presently, the country can ill-afford to lose our on "precious" human resources.

 

MHRA says Budget 2026 is 'balanced, responsible, and forward-looking'

MHRA said that the Budget, as presented by Finance Minister Clyde Caruana is "balanced, responsible, and forward-looking", the Malta Hotels and Restaurants Association stated in its reaction to the budget announcement.

The MHRA said that this budget is one which protects people through higher pensions, family support, and energy stability. It added that the budget also gives employers the fiscal certainty needed to invest, innovate, and create quality jobs. It commended the government's commitment to no new taxes, stronger public finances, and the pursuit of sustainability as a national priority.

"This is a Budget that recognises the strong economy," commented MHRA President Tony Zahra. He said that through combining fiscal discipline with social care, Minister Caruana "has laid the groundwork for Malta's Vision 2050, one centred on stability, sustainability, and shared prosperity".

The MHRA said that the government has acknowledged Malta's demographic challenges and is taking steps to address workforce shortages and skills gaps, including through education, training, and legal migration measures. It continued that these initiatives are vital to support sectors such as tourism and hospitality, which it commented rely on a skilled and stable workforce.

MHRA stated that it welcomes continued investment in green transition incentives, skills development, and tourism diversification, which it said ensures Malta's growth remains inclusive, sustainable, and future-proof. It continued that the association looks forward to further policy measures that chart a clear path for the long-term sustainability of tourism by addressing supply challenges such as tourism accommodation, workforce availability, infrastructure capacity, environmental management, and the impact on local communities.

Zahra concluded by stating that financial stability is the best investment in the economy. "This Budget strengthens confidence, protects livelihoods, and positions Malta to realise Vision 2050 for both the people and the employers who drive our nation forward."

 

MUT welcomes Budget education measures, but says its feedback during consultation phase was 'useless'

In reaction to Budget 2026, the Malta Union of Teachers said that the budget for the education sector for next year is a continuation of the work done in the past years, with a consolidation of work and the announcement of further investment.

"However, the MUT notes that feedback provided during the consultation phase through its position paper was not included in this year's budget," the union said.

The MUT said it welcomed the continued investment in school infrastructure, the promotion of physical activity in schools and the strengthening of the Family-Community School Link programme.

It also noted that this budget announced the expansion of the outreach programme of educators to an Integrated Outreach Engagement Programme from 2026 to 2030.

"The budget also announced the revision of the curriculum to be carried with OECD, and the announcement of the vision 2030-2035 for a modern, inclusive and innovative education based on research and collaboration," it said.

With regards to students and families, the MUT also said it welcomed the €500 increase for the allowance for families with students in post-secondary, the €500 grant to families of students in Years 10 and 11 to assist students in digital areas, the distribution of digital resources to students in secondary schools and the 15% increase in stipends.

 

UHM says parents also need time to spend with their families

The Union Ħaddiema Magħqudin (UHM) has welcomed certain measures in the 2026 Budget while urging the government to do more to address work-life balance and demographic challenges. The union noted that the Budget includes initiatives to encourage parents to have and raise children, responding in part to UHM's proposals for a national demographic policy.

Despite these measures, UHM stressed that financial support alone is insufficient. Parents also need time to spend with their families, a need which the Budget did not fully address. The union highlighted ongoing pressures on households despite strong participation in the labour market.

UHM welcomed increases in the minimum wage, pensions, child allowances, and birth and adoption bonuses, as well as proposals for AI training and certification. Discussions on improved maternity, parental, and paternity leave, along with the potential introduction of an occupational pension, were also praised.

The union called for further reforms, including a 36-hour workweek and expanded remote working options, to improve work-life balance and reduce traffic congestion. It also criticised the lack of recognition for seniority among contract workers and insufficient support for part-time and overtime employees.

Pensions remain a concern, UHM said, noting that rigid structures leave many retirees with inadequate income. The union also highlighted the need for better policies addressing childcare and eldercare pressures.

UHM concluded by urging the government to prioritise flexible working hours, support for part-time employees, recognition of long-serving workers, and initiatives that allow parents more time with their children. Such measures, the union said, are essential to ease pressures on Maltese families and ensure a better balance between work and family life.

 

Budget with a strong commitment to families and future generations - GWU

The General Workers' Union (GWU) has expressed its approval of the announced budget, highlighting its focus on economic growth for a more secure future for families. The union described this budget as both economically and socially sustainable.

GWU Secretary General Josef Bugeja stated, "This budget comprises a range of proposals that leverage our country's lowest unemployment rate to enhance the quality of life for citizens. It aims to create greater wealth for families, pensioners, youths, business owners, and future generations."

Highlighted measures proposed by the GWU and included in the budget are continued subsidies for energy, fuel, and cereal prices, benefits for digital research, innovation and artificial intelligence, it said. Additionally, it said that the budget includes increases in contributory and non-contributory pensions and social benefits, investments in businesses and enterprises, and initiatives designed to further support family incomes and assist vulnerable groups.

"This budget offers more support to families by implementing a significant tax cut for parents with children, reducing their burden by €160 million. It also includes an increase in the Children's Allowance, in-work benefits, and a rise in the birth bonus, among other measures," added Bugeja.

He further emphasized: "We are pleased to see substantial investments in families, pensioners, workers, and initiatives addressing the demographic challenge."

The GWU also welcomed the new mechanism introduced by the government, which, through the Micro Invest scheme, will assist the private sector to enhance workers' wages. This initiative is expected not only to improve wages but also to support workers in continuing their training and skill development in the workplace, the GWU said.

"It is important to note that, despite the aid and incentives, the deficit rate is projected to continue declining while the economy is expected to grow. These benefits are made possible by economic growth without any increase in taxes."

"Through this budget and its forward-looking vision, the government is providing support to families and the most vulnerable groups in society through a substantial increase in social benefits, while also addressing the needs of the private sector and enterprises willing to invest," concluded Josef Bugeja.

 

Malta Chamber of SMEs welcomes Budget 2026

The Malta Chamber of SMEs has welcomed the 2026 Budget, stating on Monday evening that the announced measures "will assist SMEs to grow and remain competitive."

The SME Chamber noted that improvements in the Micro Invest Scheme, increased support for digitalisation, and the incentive to invest in research and development (R&D) are among measures that will help businesses grow and expand.

During Monday's Budget, Finance Minister Clyde Caruana announced that an "unprecedented" €100 million investment will be made by the government towards digitalisation and adoption of technological services like AI, Internet of Things (IoT), cybersecurity, AR/VR, blockchain, and robotics.

In reference to the Micro Invest Scheme, a new mechanism will be created for workers who have been with the same company for over four years. The government will finance 65% of wage increases for two years for such persons in Malta (up to a maximum of €780 annually) and 80% with a cap of €960 annually for Gozo. In addition, the Micro Invest benefit limit is increasing from €45,000 per year to €65,000 for Malta and up to €80,000 annually for Gozo.

Tax credits within the Micro Invest Scheme shall also increase to €65,000, up to a maximum of 65% of eligible expenditure. For businesses in Gozo, the supplementary 20% bonus shall be retained, while the total aid for specific existing categories of businesses will rise to a maximum of €85,000.

The Chamber said that prior to Budget 2026 on Monday evening, the Ministry for Finance consulted with the SME Chamber and other stakeholders through several consultation meetings beforehand.

In its statement, the SME Chamber urged the government to continue addressing issues highlighted by businesses in is SME Barometer over past months, including employee shortages, unfair competition, good governance, and traffic congestion. It added that its own proposals were built on the insights gathered through the quarterly SME Barometer.

 

For.U.M. calls for more work-life balance measures in 2026 Budget

Forum Unions Maltin (For.U.M) has welcomed several measures announced in the 2026 Budget, while calling for stronger efforts to improve work-life balance for Maltese workers.

In its response, the confederation noted that the budget introduced positive changes including increases to the minimum wage, child allowance, and pensions - with the latter rising by €10 per week. It also welcomed the rise in birth and adoption bonuses, tax reductions for families with children, and government proposals for training and certification in Artificial Intelligence (AI).

For.U.M. highlighted discussions announced in the budget regarding enhanced maternity, parental, and paternity leave, as well as the possible introduction of an occupational pension scheme, acknowledging that these measures were made possible thanks to the dedication of Malta's workforce.

However, the union reiterated its call for the government to adopt a 36-hour workweek, arguing that such a change would create a healthier balance between professional and personal life. It also stressed the importance of recognising remote working as a key tool for achieving work-life balance while alleviating Malta's ongoing traffic problems.

For.U.M. concluded by urging the government to give due attention to these proposals, stating that better flexibility and family-oriented policies would contribute to a more sustainable and productive workforce.

 

MDA welcomes Budget social measures, but warns on lack of capital investment

The Malta Developers Association (MDA) has welcomed the 2026 Budget positively, particularly from a social perspective, but expressed concern over the lack of capital investment.

"The government is able to deliver this type of Budget because it can substantially reduce income tax for families, increase spending on pensions and other social measures, and even refrain from introducing new taxes due to continued economic growth," it said.

The MDA said that the property and construction sector, despite controversies, supports this type of economy, which also drives growth in other sectors.

"We remind that the property and construction sector contributes 14% of the value added both directly and indirectly," it said.

The MDA said that social measures like those announced in the Budget are sustainable only because of the economic growth the country has experienced, which needs to continue in the coming years.

"Among other things, and above all, property and construction, which some underestimate or undervalue, are crucial and benefit everyone, budget after budget," it said.

The MDA said it was satisfied that this sector will be able to benefit from new and improved programs for machinery modernisation and digitalisation.

It said it was also pleased with the measure that will assist employers in paying wages to employees who have been with them for a number of years, and who will benefit from increases.

The MDA also noted with satisfaction the mention of the Property Malta Foundation initiative, which will expand the Property Price Register project, a dynamic online platform that will, for the first time in Malta, give users access to comprehensive and metric data related to contractual property transactions in Malta.

"On the other hand, the MDA is disappointed that capital expenditure continues to decrease, which could lead to various problems in the future," it said.

 

Gozo Business Chamber welcomes Budget, says 'there must be an active effort to establish value-added niches in Gozo'

The Gozo Business Chamber said it noted with satisfaction that this year's Budget is a socially oriented one, but which also continues to incentivise businesses to move forward.

"The Chamber believes that social measures, such as income tax brackets that ease the burden on families, are welcome initiatives that support a better quality of life. A strong economy must go hand in hand with the well-being of society. The Chamber also notes the measured approach being taken by the Government regarding the private sector's contribution to occupational pensions, as well as maternity, paternity, and parental leave. The Chamber believes that this approach fosters a comprehensive discussion, where decisions on how to introduce new measures are made without placing excessive burdens on the private sector or increasing disparities with the public sector."

The Gozo Business Chamber welcomes the emphasis on start-ups, particularly in high value-added sectors. However, the Chamber calls for a clear commitment to ensure that this start-up framework is also implemented in Gozo, particularly in fields such as medtech, clean tech, and green tech.

"Gozo needs a fully developed start-up ecosystem, centred around the Gozo Innovation Hub, which is currently not being utilised to its full potential. Given Gozo's current lack of economic diversification, this is an essential step to establish value-added niches on the island."

The Chamber also welcomed the Government's commitment to make the opening of a bank account a legal right. "This is a significant development, considering past cases where companies - especially those which were foreign-owned - faced major difficulties in opening bank accounts."

The legal amendments being proposed to allow young people aged 16 to 18 to become entrepreneurs in a regulated manner are also an important step forward. Family Businesses and the Self-Employed, it said.

The Chamber also welcomed the extension of succession benefit schemes for family businesses. It noted that self-employed individuals will now also be entitled to Bereavement Leave and Miscarriage Leave. "This is an important step toward greater equity in a sector that is crucial for Malta's economy."

It said that the new Micro Invest mechanism, which will offer support of up to 80% (max €960/year) for employees who have worked for more than four years with the same company in Gozo, is another positive step for Gozitan businesses. "The same applies for the new thresholds for Gozitan businesses which will now cover a maximum expenditure of up to € 85,000. Tourism."

Among other things, it noted positively the investment in equipment and care at the Gozo General Hospital, and the Government's clear commitment to the implementation of the Health Care Campus Masterplan. "The Chamber reiterates that a new hospital is essential both for the Gozitan community and for the Queen Mary Malta University Campus in Gozo. Public Transport."

It welcomes the planned extension of the fast ferry service to include Ta' Xbiex and Buġibba. "However, it also calls for a long-term strategic plan for Mġarr Harbour and the development of a second port in Gozo. In this regard, the Chamber welcomes the establishment of a task force to analyse how Mġarr Harbour can be better utilised. The Chamber also notes the clear commitment for investment in both Ċirkewwa and Mġarr terminals. The Chamber maintains that no meaningful improvements can occur without strong infrastructural and strategic investment in the Port of Mġarr, which has become too small for the island's needs. Therefore, the land reclamation being considered for the Freeport area in Malta should also be considered for Gozo."

The Chamber also welcomes the investment plan for roads in Gozo and the commitment to initiate works on the rural airfield, among other things.

The Chamber said it welcomes the measure to provide a €280 monthly allowance to Gozitan students pursuing post-secondary or tertiary education in Malta, as a continued incentive to support their educational journey. It believes that while this Budget will "undoubtedly have a strong positive economic and social impact, Gozo must now move toward regional structures that can determine spending priorities and strategic projects independently. Economically, there must be an active effort to establish value-added niches in Gozo, to ensure that the level of development that is being spurred at a national level also takes place in Gozo."

 

ADPD-The Green Party reacts to Budget 2026: "a Budget with a regressive core"

ADPD-The Green Party has dubbed the Government's 2026 Budget as a missed opportunity to invest in Malta's sustainable future and instead warned that the country is accumulating debt while failing to promote wellbeing. The Budget continues to finance growth through unsustainable borrowing rather than channeling funds into long-term social and ecological investments.

"The Government is borrowing against our children's future," ADPD stated. "We are piling up debt to support a growth-model that exploits resources, deepens inequality, ignores our ecological limits and hampers future generations from taking their own decisions. This is fiscal irresponsibility, not sustainability."

Whilst the motivation for the family-friendly income tax measures in the budget speech may be laudable, the actual proposals are regressive and consequently do not implement social justice - those who are at the lower end of the income bracket should benefit much more than those at the upper brackets, for the simple reason they require much more help. This inversion seems to be beyond the Minister of Finance's so-called socialist vision. It is a myopic vision. 

ADPD-The Green Party reiterates that real prosperity demands a shift to a wellbeing-economy based on fairness, justice and ecological limits. The central plank of this vision is dignified wages: the minimum wage must become a living wage. We remind the Minister that the current minimum wage levels are roughly 40% below what studies identify as necessary for a decent standard of living for a typical household. This has not been addressed in this Budget.

Momentum welcomes many positive measures, highlights shortcomings and the urgent environmental crisis that fueled public protests outside parliament
Momentum has issued its reaction to the government's latest measures. Carmel Asciak, Momentum Treasurer, gave the following assessment on behalf of Momentum.

Momentum views the introduction of the seven-day bereavement fund for the loss of a child as a positive and compassionate measure that can help ease the immense pain couples face during such a tragedy.

Furthermore, the increase in grants for new births or adoptions is a most welcome step, as is the circa €100 a month rise for Gozitan students studying in Malta.

While new income tax brackets for parents are welcome, Momentum notes that the €4.66 COLA, which remains subject to income tax, is certainly not sufficient to make up for rising food and medicine prices.

It must also be noted that larger families are not only a financial decision. Stress and the impact of both parents needing to work long hours has an impact on their mental health and the wellbeing of families.

Regarding pensions, it is commendable that a new tranche of money (19.23 cents) has been reserved for the 25,000 pre-1962 born pensioners who paid the highest rates of contributions. However, this means the discrepancy with their post-1962 counterparts still stands at €41 a week (down from €82 in 2023).

It is, however, very disappointing that the other 50,000-60,000 pre-1962 born pensioners have again been left with zero euros, instead of being given a fair pro-rata increase. These pensioners must contend with the daily inflation of 2025 and 2026. It is very disappointing that the Maltese state continues to discriminate against them because of their age.

Momentum welcomes with great positivity the removal of the discrimination against people between the ages of 16 and 18 regarding their social security contributions. Momentum had long advocated for this change, and it is good to finally see it corrected. This is a clear example of our policy proposals having an impact.

It is also positive that the Qormi and Gzira Health Centres will be kept open 24 hours a day.

The planned AI training course and the free AI subscription are definitely needed. This will help those who cannot afford it and mitigates the risk of AI creating a further gap between the haves and the have-nots.

Momentum would have liked to see the Minister kickstart more opportunities for working from home, flexi-hours, and similar measures. Such policies can lead to greater productivity, reduced traffic, and more leisure time for families. Unfortunately, the government has kept completely silent on this.

Finally, we believe the Government has lost yet another opportunity to address the transport and traffic issues. Simply stating that a Mass Transport System would "royally screw" up finances is not enough.

The government should have long ago started the process to expand our bus fleet, including feeder buses, whilst also increasing routes, frequency, reliability, and punctuality. It is only by getting private cars off the road, thanks to an efficient public transport system, that progress can ever be registered in this area.

Momentum notes the large public outcry, highlighted by the protests surrounding the controversial planning reforms. We firmly believe that any economic progress is fundamentally undermined if it comes at the cost of irreversible environmental degradation. The government cannot ignore the clear link between its flawed planning policies and the long-term well-being of the country, which is being eroded by the destruction of our natural and urban landscapes. True progress must be sustainable, not destructive.