As Malta prepares for Budget 2027, the question is no longer simply how fast the economy can grow, but how sustainably it can do so.

The test of this Budget should not simply be how much more government spends or how much larger the economy becomes. It should be whether that investment makes a tangible difference to people's lives: better schools, shorter hospital waiting lists, more affordable housing, improved public services and better opportunities for young people. Economic growth must ultimately translate into a country where people can live well, raise a family and build a future with confidence.

Employment and population growth have helped drive economic expansion, but a model that relies on continually adding workers cannot be the sole basis of future prosperity.

Malta needs an economic strategy that generates more value from the skills, technology and investment available to it. Education, healthcare, research and innovation must therefore be treated not only as areas of public spending, but as foundations of the country's future productivity and competitiveness.

Alongside research and innovation, capital investment in modern infrastructure, technology and equipment is essential to raising productivity and enabling businesses to generate greater economic value.

Education must become an economic priority

The most valuable resource Malta has is its people. Yet investment in human capital cannot be measured simply by how much is allocated to schools, colleges and universities. We need to ask what our education system is preparing young people for.

The workplace is changing rapidly. Artificial intelligence, automation and digital technologies are transforming occupations and the skills businesses require. Malta needs an education system that gives every child strong foundations in literacy, numeracy, science and digital skills, while also encouraging creativity, critical thinking and entrepreneurship.

Budget 2027 should therefore provide a serious, multi-year investment in skills. This means strengthening vocational education, supporting lifelong learning and making reskilling accessible to workers whose jobs are changing.

It also means investing in teachers. We cannot talk about educational excellence without addressing teacher recruitment, retention, training and professional development.

Health is also productivity policy

Health is too often treated solely as a social expenditure. It is much more than that.

A healthy population is a productive population. Long waiting times, delayed treatment and preventable illness carry an economic cost, as well as a human one. They affect workers, employers, families and the public finances.

Malta therefore needs to look beyond simply expanding healthcare capacity. We should invest more in prevention, early diagnosis, digital health, rehabilitation and community-based services. We need to use technology to reduce administrative burdens and allow medical professionals to spend more time with patients.

Every euro invested in keeping people healthier for longer should be viewed as an investment in both quality of life and economic resilience.

Research and innovation must leave the margins

The area where Malta has perhaps the greatest opportunity to change its economic trajectory is research and innovation.

The European Commission has specifically highlighted research and innovation as essential if Malta is to move towards a productivity-driven growth model. The Government's own pre-Budget thinking has also recognised the opportunities presented by emerging sectors, including artificial intelligence and renewable energy systems.

The challenge is turning recognition into results.

Malta needs substantially stronger links between the University, research institutions and the private sector. Public funding should help companies invest in research, develop intellectual property and commercialise new technologies. Government procurement itself can become a tool for innovation by creating opportunities for Maltese companies to develop and test solutions to real public-sector problems.

We should also make it easier for researchers and highly skilled professionals to build careers in Malta. Talent is attracted not only by salaries, but by the quality of institutions, research opportunities and the possibility of turning ideas into successful enterprises.

The objective should be clear: move more of Malta's economy towards higher-value activities where productivity, skills and innovation, not simply the number of people employed, drive growth.

A different definition of success

Budget 2027 should therefore be judged against a broader set of indicators.

How much has productivity increased? How many people have acquired new skills? How quickly can patients access the treatment they need? How much private investment has been leveraged by public research funding? How many Maltese companies are developing and exporting innovative products and services?

These are more important questions than whether another headline measure has been announced.

Budget 2027 should be the moment when we stop measuring economic success primarily by how many more people are working or how much bigger the economy has become and start asking how much more value each worker, each business and each public investment is generating.

If we get education, health, research and innovation right, productivity will follow. And if productivity rises, Malta can afford better wages, stronger public services and a higher quality of life without having to rely indefinitely on ever more people simply doing more of the same.

That is the real test for Budget 2027, as Malta must increase productivity and generate greater economic value from the resources it already has.

The country should expect nothing less.

Jerome Caruana Cilia, PN MP and Shadow Minister for Education and Citizenship