Prime Minister Robert Abela has announced that Budget 2027 will be presented on Monday, 26 October, marking the first Budget of the current legislature following the general election of 30 May.

In the weeks leading up to the budget, social partners, business organisations, trade unions and NGOs have once again set out their priorities, concerns and recommendations, calling on the government to take their proposals into account as it prepares its financial roadmap for the coming year.

Not every proposal can be accommodated, but the annual pre-budget exercise is intended to provide government with a broad picture of the challenges facing different sectors of society and the economy. The measures ultimately included in the budget will show which of those concerns have translated into concrete policy.

Among the most significant submissions this year is that of the Malta Chamber of Commerce, which has called for a fundamental reset of Malta's economic model.

The chamber has warned that economic growth has become overly dependent on the importation of labour rather than improvements in productivity. It has also raised concerns about public trust in institutions, pointing to what it describes as weaknesses in enforcement and accountability.

The Regional Committee for Gozo, meanwhile, presented government with proposals centred on five areas: accessibility and connectivity; health; economic diversification; education and human capital; and energy, the environment and climate change.

The Chamber of SMEs has also submitted a package of 40 proposals for Budget 2027, organised around five pillars: investment and compliance; governance and fair competition; productivity; energy and resources; and transport and mobility.

During a meeting with the Prime Minister, the SMEs' representatives also called for the establishment of a cross-party task force to identify Malta's long-term national priorities.

The Chamber argued that some of the decisions facing the country will inevitably be difficult and, at times, unpopular. A permanent forum involving government, the Opposition and key stakeholders, it said, could allow these choices to be addressed collectively and help establish a long-term national direction without individual political parties being able to gain electoral advantage by supporting or opposing necessary reforms.

The Chamber of SMEs is calling for a shift in Malta's economic model as part of its proposals for the 2027 Budget. Its central message is that future growth should no longer depend primarily on a larger population, increased traffic and greater consumption of resources, but on generating more value from every hour worked, euro invested and unit of energy and land used.

Representatives of the Malta Hotels and Restaurants Association (MHRA) also raised a number of priorities, including improved connectivity, investment in workers' skills and professionalism, stronger governance, and the need to maintain conditions that allow businesses to invest, modernise and raise standards.

The budget will, however, be presented against a more challenging financial backdrop.

The government was elected for a fourth consecutive term on the basis of a series of electoral commitments, many of which will now have to be translated into policy while public finances face increasing pressure.

Finance Minister Clyde Caruana recently warned of the rapidly rising cost of energy subsidies, saying the projected cost of the diesel subsidy alone had increased from €30 million to around €75 million in the space of three months.  Caruana warned that the escalating expenditure could force government to reduce spending elsewhere - "in other words, the government will have to tighten its belt."

That warning raises questions about the extent to which all of the commitments made before the election can be implemented, particularly as government faces competing demands on public expenditure.

Wage growth is another area where the government's promises face scrutiny.

Prime Minister Robert Abela's commitment to higher wages, made in the previous budget, comes as Malta's relative position on minimum wages within the European Union has deteriorated.

According to the latest figures from Eurofound, Malta ranked 15th among EU Member States in terms of the national minimum wage in 2026, down from eighth place in both 2016 and 2021.

Over the past decade, seven countries that previously had lower minimum wages than Malta have moved ahead. They are Slovenia, Lithuania, Poland, Cyprus, Portugal, Croatia and Greece.

The figures indicate that several of these countries have introduced substantially larger increases in their minimum wages in recent years, while Malta's position in the EU ranking has continued to decline. Malta's minimum wage increased by 3.5% between 2025 and 2026, reaching approximately €994 per month. In comparison, Hungary recorded an increase of almost 19%, Slovenia 16%, Bulgaria 13%, Slovakia just over 12% and Lithuania just over 11%.

Another significant commitment made by the Labour Party during the election campaign was the introduction of a national well-being index to complement Gross Domestic Product. Unlike GDP, which primarily measures economic activity, a well-being index is intended to provide a broader picture of people's living conditions and quality of life.

Such an index can incorporate indicators covering health, education, employment, housing, personal safety, social relationships and access to essential services. The underlying concept is that economic growth alone does not necessarily provide a complete picture of whether people's living standards are improving.

The inclusion - or absence - of such commitments in Budget 2027 will therefore be closely watched.

With government facing calls for greater productivity, stronger governance, higher wages, continued investment and improved quality of life; while simultaneously confronting rising subsidy costs, the Budget will provide an early indication of how the new administration intends to balance its electoral commitments with the financial constraints facing the country.

Indeed, these challenges will have to be factored into the national debt, which has now surged past €12 billion as the deficit continues to widen.

Gejtu Vella is a People & Industrial Relations Consultant