Budget 2025: Social partners react to Caruana’s Budget speech

General Workers Union

The GWU said the Budget was a sustainable plan that rewarded work and promoted social solidarity, reflecting the Government’s commitment to a national vision that values the contributions of workers and the self-employed.

Josef Bugeja, Secretary General of the GWU, said: “The GWU is satisfied that, thanks to workers’ contributions and the government’s leadership, the current economic situation is fostering growth. This growth leads to increased benefits for workers and all members of Maltese society, helping everyone to move forward.”

The GWU has also advocated for Occupational Pension Schemes, and for necessary amendments to the Wage Regulation Orders (WRO) to achieve uniformity and legal certainty across all sectors of the labour market.

“Despite the challenges we face, the Government will inject approximately €550 million into the community, while the country’s deficit continues to decline sustainably. This effort is achieved without raising taxes and by reducing tax rates. This demonstrates good governance by collecting necessary revenues while controlling government expenditures, thereby supporting both the people and the country,” Bugeja emphasised.

Forum Unions Maltin

Forum Unions Maltin, the confederation of trade unions welcomed the increase in tax bands announced in the budget.

“This together with the increase in children allowance are measures to support employees and families. For.U.M. notes also the government measure to sustain employees opting for a third pillar pension whilst it welcomes the introduction of incentives for retired employees to provide mentoring in their areas of expertise,” they said.

The union forum also said it was expecting to see the “long-standing promised measure” for sick leave of employees to be utilised for sick dependants, saying it is disappointed with the measure to increase the years of contribution of employees born in 1976 and later.

Malta Union of Teachers (MUT)

The Malta Union of Teachers said the Budget presented by the Government outlines the current work being carried out in the education sector.

“The MUT welcomes the mention of the Sectoral Agreement signed between the MUT and the Government as one of the most important measures in the education sector,” it said. “The budget outlines also the work on the Education strategy 2024-2030 which is also being carried out in consultation with the Union whilst it announces the new Forum for Education which was one of the proposals of the MUT to the Education Ministry.

The MUT noted the emphasis on wellbeing, the programme of building and maintaining schools and the importance being given to literacy.

The Union said it was expecting measures in the budget to address the growth in school populations through the present economic model. It expected measures to establish more work-life balance of employees through the right to disconnect. “These were amongst the pre-budget proposals presented by the MUT to the Government.”

Malta Hotels and Restaurants Association (MHRA)

The Malta Hotels and Restaurants Association (MHRA) welcomed the budget, saying it lays a strong foundation for a resilient economy designed to adapt and thrive amid global changes.

“This budget places significant emphasis on social measures while also addressing sustainability, innovation, and infrastructure, which serve as the backbone for strengthening key sectors, particularly tourism,” the MHRA said.

It welcomed revisions in the wage regulation orders, emphasising the need for these changes to accurately reflect the realities of the hotel and restaurant business. “It is crucial that wage regulations do not create shocks in the restaurant sector; they should be evaluated to consider the unique nature of the industry, which often experiences concentrated activity on weekends. Additionally, the principle of equal pay for work of equal value must account for the nature of temporary workers in this sector.”

Chamber of Commerce

The Chamber of Commerce said Budget 2025 lacked the necessary measures and economic vision to drive a major quality leap and a tangible improvement in the well-being of society.

“For the third consecutive year, Government’s budget includes energy subsidies, social assistance for pensioners and vulnerable persons. In addition, tax brackets are being revised for the first time in 11 years. This is a budget that incentivises consumption but does not address productivity, competitiveness and attractiveness for investors. The focus is on distributing wealth rather than generating it in a sustainable way.”

It welcomed the concept of auto-enrolment with opt-out mechanism for occupational pension schemes. However, it said employer incentives to do the same as in the proposed public sector have not been improved. “This puts private employers at a disadvantage on the labour market.”

“Good governance is essential for achieving quality, accountability and an improvement in productivity, as well as ensuring a level playing field. The 2025 budget did not allocate funds for long-overdue reforms such as that needed in public procurement.

“The budget speech indicates that there is an understanding of the extent to which traffic congestion, over population and abuses in construction are impacting the quality of life of people. There is also a willingness to discuss measures to address these issues especially with the social partners at MCESD, and this is a step in the right direction.

“While the budget remains a fundamental annual financial planning exercise aimed at reviewing taxes, subsidies, and social benefits; allocating funds for ministries and government projects; and forecasting government borrowing needs, a budget needs to be developed within the context of a comprehensive strategic plan with a broader long-term outlook. Such a plan should precede the budget, outlining funding requirements based on long-term objectives with clearly defined milestones. This has not happened so far and hence this budget represents another missed opportunity to address significant challenges impacting overall well-being and the country’s competitiveness and attractiveness.”

Gozo Business Chamber

The Chamber said it agrees with the establishment of a migration policy based on skills. “In this context, a national migration policy should be structured in such a way as to establish high-value-added niches in Gozo. The Chamber believes this could be another important step in supporting Gozo’s economy.”

The Chamber agreed with incentives to promote occupational pension plans. “The Chamber believes this is an important step for retirees to continue strengthening their income.”

While the budget mentions projects like the Elderly Home in Gozo, the new school in Rabat, and the new Aquatic Centre, all of which are positive initiatives, there was no mention of the new hospital. “The Chamber hopes that, as announced, work will begin on this project, which is greatly needed on every level.”

One of the proposals made by the Gozo Business Chamber was to establish a startup incubator at the Gozo Innovation Hub. “While several investments in Malta are mentioned, including in the digital sector, there is no mention of investments in this sector in Gozo. The Chamber believes that the Gozo Innovation Hub has strong potential that is currently underutilized.”

The Chamber also noted positively that the Government is committed to Gozo’s connectivity. “This commitment was clearly shown through the new schedule for the fast ferry service and the announced investment in the rural airfield. However, the Chamber believes that for this commitment to be fulfilled, there should be a long-term outlook on maritime connectivity, with alternative plans to ensure that, in case of incidents or dangers, as happened recently, Gozo has alternative solutions for emergency travel.”

ADPD

The Green Party said Robert Abela’s government was increasing public debt whilst opening its doors to sectors that only offer low-paid jobs and exploit workers.

“The pandemic and the crisis resulting from the Russian invasion of Ukraine are being used by Robert Abela’s government as a buffer against unnecessary spending. Debt has been incurred which has not gone into investment for the future but into subsidy expenditure where it is not strictly necessary, even for those who can afford it and those who waste it.”

The Green Party criticised continued fuel subsidies while Malta was left without a rapid transit system and continued dependence on private transportation. “There is a need not just for a switch to electric cars but also for a modal shift leading to a reduction in cars from roads. This leads to a better quality of life as a result of changing our attitudes towards transport.”

“Speaking of how much the country needs to focus on high value-added and high-value sectors such as technology, renewable energy, life sciences, and advanced manufacturing, and even the green and digital transition is long overdue. For this to happen but the government needs to incentivise investment in these areas.”

UHM Voice of the Workers

The Union Ħaddiema Magħqudin said the government had disregarded its request not to tax the increase of the cost of living, while having extended social security contributions for pensionable income by one year to 42 years.

“While the Government has reduced income tax, the middle class will not benefit anything more than low-income earners. This reduction is being made to compensate for the high cost of living of recent years which has eroded the quality of life of families. This measure will help around 165,000 workers earning less than the median wage of €19,000 per year, but not to middle class.”

The UHM said it was surprised that for those born from 1976 onwards, the government had added a further year of social security payments, without consultation.

As for the occupational pension scheme for public sector workers, the UĦM said the scheme discriminated among non-government workers, saying this would lead to a social disparity between public and private sector workers.