The Chamber of Commerce has called for a major rethink of Malta's economic model, warning that low productivity, energy subsidies, labour market pressures and governance challenges must be addressed if the country is to remain competitive.

The Chamber presented more than 150 proposals for Budget 2027 to Prime Minister Robert Abela during a pre-Budget consultation meeting at Castille. Its "RESET and LEAD" document contains measures proposed for the first year of the legislature as well as longer-term reforms over the next five years.

Chamber president William Spiteri Bailey acknowledged Malta's economic success and the resilience shown by businesses, but warned against assuming that current growth could simply continue unchanged.

He said the Chamber had received differing messages from government, pointing to assurances that "everything is going well" alongside Finance Minister Clyde Caruana's more cautious assessment of energy costs, deficit pressures and limited room for additional spending.

Spiteri Bailey said the public and businesses deserved "the whole story" and argued that difficult decisions should be anticipated rather than postponed.

Energy subsidies were a central concern. The Chamber is not calling for subsidies to be removed immediately, he said, but argued that they should not be treated as a permanent policy. Citing calculations by the Chamber, he said almost €300 million had been spent on fuel subsidies between 2022 and 2025, arguing that a different allocation of resources could have supported significantly greater investment in renewable energy.

Productivity was another major concern, with Spiteri Bailey highlighting a 0.1% increase in labour productivity compared with a 4.4% rise in employee compensation. He said future growth could not depend simply on increasing the number of workers, but needed greater investment in technology, automation, artificial intelligence, skills and innovation.

The Chamber also called for greater efficiency in the process for third-country nationals changing employment, arguing that workers already in Malta should not be prevented from working for months because of bureaucracy.

Governance, however, was described as fundamental to the country's economic prospects. Spiteri Bailey said investors looked beyond tax incentives to institutional independence, the rule of law, stability and certainty. He argued that businesses complying with the rules should not be placed at a disadvantage against those that do not.

Abela said Malta's economy remained resilient, with European Commission forecasts pointing to real growth of 3.7% in 2026 and 3.6% in 2027, while unemployment is expected to remain around 3%.

He said the government's objective was to move towards more sustainable growth, higher productivity and greater value added, including through digitalisation, artificial intelligence, upskilling and reskilling.

The Chamber's message was summed up by Spiteri Bailey in three words: "RESET" what is not working, "LEAD" where difficult decisions are needed, and, above all, implement them.