‘Enhancing Malta’s productivity and competitiveness should be the top priority for economic policy’

The Malta Chamber of Commerce, Enterprise and Industry President Chris Vassallo Cesareo and CEO Marthese Portelli have highlighted the need for economic policy to focus on enhancing Malta’s productivity and competitiveness.

Their comments came as part of a joint statement released in The Malta Chamber’s Pre-Budget Document 2024, published on Tuesday. In the document, the organisation emphasised that Budget 2024 presents Malta with the opportunity to address various key problems which have been left “ineffectively tackled” over a number of years. It focused on issues such as traffic congestion, utilities, upkeep of public areas, proper enforcement of laws and regulations, low-income earners, subsidies, and also employment.

The Malta Chamber outlined 250 proposals in the document, including the elimination of tax from the Cost of Living Adjustment (COLA) or revision of tax bands, with COLA anticipated to reach €13 per week in 2024. Business leaders have voiced their concerns about this substantial increase, with this set to prompt employees to demand higher salaries, while businesses must be more efficient in conducting their operations.

Proposals also included the gradual phasing out of Government departments only working half days during summer, and for a reduction in energy subsidies, providing a six-month notice period for each decrease.

Mr Vassallo Cesareo and Dr Portelli acknowledged that the present monetary policy tightening and the effects of inflation are serving as a “drag to various economies, and Malta will be no exception”.

“This reality accentuates the need for Malta to act and take all the necessary decisions to address key issues in the best way possible. Enhancing Malta’s productivity and competitiveness should be the top priority for economic policy,” they remarked.

Malta’s economic growth must be put on a “more sustainable footing”, where economic growth can be achieved with less labour input in order to “improve the quality of life and reign in the stress of Malta’s infrastructure at all levels”.

They said that to achieve this, Malta has to “take bold decisions without any further procrastination”, even if they are deemed unpopular or challenging to implement. They called for Government to tackle structural issues such as the labour market, transport, urban planning and waste management with “immediate urgency”, with other areas also requiring further attention such as the uptake of digitalisation and the transition towards becoming environmentally sustainable.

“All of the above can only be effectively implemented if Malta truly embraces good governance and ensures full transparency and accountability. For ethical businesses to keep investing, they need to be reassured that they are operating in a country that has an agile administration that puts enforcement and integrity at the very top of everything it does,” The Malta Chamber’s top officials said.

They added that The Malta Chamber “strongly believes” that the underlying message of this year’s budget should not be based on “continuity” or “more of the same”. Instead, it has to be a budget that “uses proper fiscal planning to set a new direction and clearly lays out how the necessary changes, reforms and initiatives are actually going to become a reality”.

“The Malta Chamber remains committed to being an objective voice in this country and an advocate in favour of a smart and sustainable economy that promotes the wellbeing of its people and ensures that the country remains competitive and attractive for nationals and visitors alike,” Mr Vassallo Cesareo and Dr Portelli said.

The pair explained that the pre-budget document is “testament to this commitment”, as The Malta Chamber strives to outline the urgent priorities as perceived by the business community.

“It is in this spirit that we hope that the suggestions made will be carefully considered, both in budgeting as well as in implementation,” they concluded.