Malta Chambers dispute claims regarding foreign labour and productivity

The Malta Chamber and the Malta Chamber of SMEs have rejected claims by Finance Minister Clyde Caruana regarding the country's productivity challenges. Caruana previously suggested that businesses are opting for cheaper third-country national labour instead of investing in capital and productivity-enhancing technology, noting that Malta's population could reach 800,000 by 2040 if this trend continues.

The Chambers argued that the Minister's remarks misdiagnose the root causes of economic bottlenecks. They stated that the current labour market framework was built by previous administrations to favor volume-driven growth through foreign labour. They further contended that recruiting third-country nationals is neither easy nor cheap due to significant administrative and HR costs.

The Malta Chamber of SMEs emphasized that productivity is heavily influenced by the operating environment, citing issues such as traffic, skills mismatches, over-regulation, and bureaucratic duplication. To address these, the Chamber has proposed several measures for Budget 2027, including a mandatory SME test for new regulations, a regulatory stocktake, and the implementation of a ‘Once-Only Principle’ to reduce redundant paperwork.