Issue link: https://maltatoday.uberflip.com/i/1547431
11 maltatoday | SUNDAY • 1 NOVEMBER 2026 OPINION The price of an economic model that has run its course Michael Piccinino Nationalist MP THERE is a contradiction at the heart of the government's economic policy, which Budget 2027 has brought into sharper focus. For the last 13 years, succes- sive Labour administrations have pursued an economic model heavily dependent on increasing the size of Malta's population. More workers meant more economic activity, more consumption and, con- sequently, higher economic growth. Now, having encouraged this dependence, the government is finally acknowledging the pressures it has created. Yet rather than addressing the un- derlying weaknesses of its eco- nomic model, it is introducing additional costs that business- es, workers and ultimately families may be expected to absorb. Prime Minister Robert Ab- ela's suggestion that employ- ers should shoulder the costs associated with services used by third country nationals is particularly revealing. It raises a fundamental question: Why should businesses be asked to compensate for the conse- quences of economic policies that were designed by the gov- ernment and not by them? Nobody disputes that a grow- ing population places addi- tional demands on infrastruc- ture, healthcare, education and transport. These pressures are real and require sustain- able financing. But they are hardly new. The government has had years to anticipate them, plan accordingly and invest in the infrastructure required to sus- tain its own economic strategy. Instead, we are now witnessing an attempt to transfer part of that responsibility onto em- ployers, many of whom are already struggling with rising operating costs and persistent labour shortages. For small enterprises and self-employed individuals, these additional burdens are particularly concerning. An additional cost imposed on an employer is not neces- sarily an expense that can sim- ply disappear into an existing budget. It may mean postponing an investment, limiting recruit- ment or increasing prices. And when prices increase, it is fam- ilies who ultimately risk paying the difference. This is why the debate cannot be reduced to whether foreign workers should contribute to- wards particular public servic- es. There are legitimate ques- tions about eligibility, fairness and the financing of public expenditure. Such questions deserve proper consideration. However, the government must distinguish between de- veloping a sustainable policy and simply finding new sourc- es of revenue. The reaction of the business community to Budget 2027 should therefore be taken seriously. How does Malta intend to move from an economy which grows primarily by employing more people to one which gen- erates greater value from the people already working here? Economic growth alone can- not be the ultimate measure of success. A country can report impres- sive growth figures while its residents spend longer times in traffic, struggle to access essential services and find in- creasingly little time for them- selves and their families. These are not abstract economic con- siderations. They directly af- fect people's quality of life. The Nationalist Party has consistently argued that Mal- ta needs an economic model built around productivity, in- vestment, innovation and bet- ter-quality employment. That means providing businesses with practical incentives to in- vest in technology, automation and workforce development. It means strengthening edu- cation and vocational training while encouraging entrepre- neurship and supporting local enterprises. It also means recognising that cooperatives, family busi- nesses and the self-employed are essential contributors to a more resilient and diversified economy. Budget 2027 contains meas- ures which deserve recog- nition, including assistance for pensioners, families and certain businesses. Support- ing such initiatives is entirely compatible with questioning whether the government is ad- dressing Malta's longer-term challenges. What concerns me is the con- tinued absence of a sufficient- ly clear strategy for increasing productivity while reducing our dependence on population growth. The government must also examine its own expendi- ture before expecting business- es to contribute more. Public resources should be directed towards essential services and productive investment rather than unnecessary expenditure and questionable consultancy arrangements. Ultimately, this debate is about more than the measures announced in one budget. It concerns the kind of econo- my we want to build and the standard of living we expect it to deliver. Businesses should be partners in creating pros- perity, not the default source of funding whenever govern- ment policy produces addi- tional costs. Malta needs an economic model which creates greater value, rewards enterprise and improves people's lives. After 13 years in government, La- bour cannot continue treating the consequences of its own economic decisions as some- body else's responsibility. The time has come to change the model, not simply pass on its bill. Malta needs an economic model which creates greater value, rewards enterprise and improves people's lives