The Nationalist Party has warned that Budget 2027 could increase the cost of living, worsen traffic congestion and create uncertainty for businesses, arguing that the government has failed to provide a clear long-term economic direction.

Addressing a press conference following the budget presented by Finance Minister Clyde Caruana on Monday, PN Finance Shadow Minister Adrian Delia and Economy Shadow Minister Darren Carabott criticised the government's approach to population growth, foreign workers, tourism and investment in public services.

Delia said the budget highlighted a contradiction in the government's economic policy, with Caruana indicating that the country would not employ more people while Prime Minister Robert Abela continued to advocate for an increase in Malta's population of 14,000 people annually.

He argued that Malta could not continue relying on population growth to expand its economy, insisting that the country needed a different economic model focused on increasing productivity, improving wages and helping businesses generate greater profits.

"The economy needs to grow without the population growing alongside it," Delia said.

The PN supports measures aimed at helping vulnerable people and addressing the challenges associated with population growth, he said. However, Delia criticised the introduction of additional costs for third-country nationals (TCNs) and the tourism sector, arguing that imposing taxes without accompanying investment in solutions such as automation was short-sighted.

He also highlighted what he described as insufficient investment in education, transport and healthcare.

Delia warned that the budget would do little to address Malta's traffic problems, pointing to figures showing that 6,000 new vehicles had been registered in the first five months of the year alone.

While Caruana had described the budget as one that offered peace of mind, Delia argued that it would instead lead to greater difficulties in the coming years.

"I say it is certainty of a growing headache in the coming years," he said.

Carabott focused on the potential consequences of the budget's new costs for businesses, warning that these could ultimately be passed on to consumers through higher prices and increased living costs.

He argued that introducing significant changes without gradual implementation or adequate consultation could destabilise businesses, particularly in sectors that have become heavily dependent on foreign workers.

Carabott acknowledged that the budget had identified two major challenges facing Malta: overpopulation and the need to attract higher-quality tourism.

However, he said the government had taken too long to recognise these issues after 13 years of policies that encouraged the arrival of foreign workers to support economic growth.

The result, he argued, was that certain industries had become dependent on third-country nationals, leaving businesses vulnerable to sudden policy changes.

"Realising the problem is good, but realising the problem 13 years too late is a problem," Carabott said.

He warned that the government's decision to increase costs associated with employing TCNs could have negative consequences for the cost of living, as well as the stability of services and prices.

Carabott also questioned the government's objectives behind increasing the eco-contribution and introducing additional costs related to foreign workers and tourism.

He argued that the government needed to clarify whether it intended to maintain current population and tourist levels while generating more revenue, or whether the additional costs were intended to discourage the arrival of tourists and foreign workers.

"The government needs to choose and tell us its direction," he said.

Carabott said a shift in Malta's economic model and related policies should not happen abruptly, particularly when businesses have structured their operations around the government's previous approach.

He maintained that the government needed to provide greater clarity on its long-term objectives and explain how the new measures would address the challenges associated with population growth and the country's economic model.

The PN, he added, had been the only party to present a vision for a Malta Population Levels Plan during the last general election.