Opposition leader Alex Borg has criticised Budget 2027 for failing to address the pressure population growth is placing on Malta’s infrastructure, arguing that the country’s economic model relies too heavily on an expanding workforce rather than improvements in productivity.
Borg was speaking during a Nationalist Party political activity at his new Opposition Leader’s office in Valletta, where he said the premises was intended to bring the party closer to the public and provide a space where people could share ideas and contribute to the party’s work.
He said the party had yet to make full use of its potential, including through its network of local clubs, and that opening the new office had allowed him to meet people who wanted to contribute not only to the party but also to the country. He said he welcomed both criticism and positive feedback.
Turning to the Budget, Borg argued that Malta’s economic model had increasingly become dependent on population growth following Labour’s election in 2013. He said infrastructure had not expanded at the same rate as the population and was struggling to cope with the demands being placed on it.
He referred to comments by Finance Minister Clyde Caruana that sustaining economic growth of 4% would require an additional 14,000 people every year, questioning the long-term sustainability of a model that continued to rely on population expansion.
Citing a report by the Malta Chamber of Commerce entitled Reset and Lead, Borg said around two-thirds of economic growth came from the contribution of foreign workers, while increases in productivity accounted for only around 3% of the growth. He argued that the government was placing too much responsibility on businesses instead of taking the lead in improving productivity.
He called for greater investment in digitalisation, automation, skills development and education, saying businesses should be able to increase their output without continually needing to employ more people. He also criticised the Budget for failing to set out a stronger investment plan for education.
Borg also referred to the latest EY Malta Attractiveness Survey, saying 67% of the companies surveyed identified difficulties in attracting international businesses because of the shortage of skills required. He said this highlighted the need for greater investment in education and training.
He criticised the government’s measures concerning third-country nationals, arguing that they had been introduced without clear projections, targets or a timeframe for managing population growth. He warned that additional costs imposed on employers could eventually be passed on to consumers through higher prices, reducing their purchasing power.
On tourism, Borg questioned how the increased eco-contribution would be used, saying the government had not specified which projects, roads or open spaces would benefit from the additional revenue. He suggested increasing the contribution during peak tourist months while avoiding increases during the shoulder season.
Borg also questioned the lack of a clear vision for developing new economic sectors, saying the government had failed to build on the direction set out in Vision 2050.
Turning to infrastructure, he said the Budget had not presented a plan to prevent a repeat of the power cuts experienced last summer. He also criticised the lack of progress in addressing traffic congestion, which he said cost the economy around €77 million annually, and questioned why there had been no update on the Malta in Motion initiative.
Borg said the Nationalist Party would continue presenting its proposals and setting out its vision for how Malta and Gozo could move forward.
The activity also heard contributions from Shadow Minister for Active Ageing Paula Mifsud Bonnici and Shadow Minister for Justice, Research and Innovation Joe Giglio.