PN questions how Budget 2027 will address infrastructural pressures

Government’s budget measures fail to detail how funds will be channelled towards addressing infrastructural pressures created by Malta’s economic model, the Nationalist Party has said.

Opposition MPs Alex Perici Calascione and Rebekah Borg on Wednesday afternoon discussed the implication of government measures related to tourism and third-country nationals.

They argued Finance Minister Clyde Caruana failed to detail how revenue will be spent in upgrading the country’s infrastructure.

Perici Calascione argued attracting quality tourists goes beyond having nice hotels and accommodations, but also surrounding areas and hotspots must match that quality.

He also said following announcements on a rise in eco-contribution, a number of operators have reached out to the Opposition expressing their concerns.

From 1 January, the eco-contribution on hotel accomodation will rise to €8 per person per night for guests staying in hotels, guesthouses and other collective accommodation, and €10 for those staying in short-let apartments.

The maximum charge will be capped at €64 per person for collective accommodation and €80 for short lets. The contribution will apply to people aged 18 and over, while eco-contributions on accommodation for students attending English-language schools will be abolished.

The government expects to collect around €182 million through a sharp increase in the environmental contribution paid by tourists.

He argued that further discussions with the government were needed to establish how the proposed measures would affect the industry.

The party deputy leader also said projected figures in Vision2050 on tourism arrivals for 2035 had already been met, questioning government strategy and how the country’s infrastructure will cope.

TCN measures could increase costs for employers and consumers

Perici Calascione also questioned how Malta had become so dependent on foreign workers, arguing the economic model had encouraged population growth without sufficient planning for its impact on infrastructure and public services.

He referred to a figure of 106,000 additional foreign workers in a 10 year period in his remarks, and argued that they were brought to the country “with a clear plan”.

Perici Calascione warned measures increasing the cost of employing TCNs could place an additional burden on employers, with some of those costs potentially being passed on to consumers.

He called on the government to publish any studies assessing the economic impact of the measures, arguing that employers needed clarity about how the changes would affect their businesses

He also referred to the estimated 95,000 people at risk of poverty, arguing that the government needed to consider the social implications of its economic policies.

Reference was also made to the fact that TCN workers earn almost 40% less than the national average in Malta.

Perici Calascione maintained foreign workers had come to Malta within an economic system that actively relied on their labour, and said the government had a responsibility to explain how it had planned for the resulting pressures.

More comprehensive planning

Construction spokesperson Rebecca Borg also criticised the government’s economic model, arguing that population growth had not been matched by adequate investment and planning in infrastructure.

She said the government had pursued an economic model that relied on bringing more people into Malta, despite the country’s limited geographical size.

Borg compared Malta’s population growth to the size of Birkirkara, which has around 30,000 residents, arguing the country had effectively added a population equivalent to another Birkirkara in just two years without building a new town to accommodate it.

She argued that Malta could not continue accommodating population growth without making corresponding changes to its infrastructure and public services.

“The problem is with infrastructure,” she said.

Borg questioned who would ultimately bear the costs of the government’s measures affecting foreign workers. Referring to Finance Minister Clyde Caruana’s position that Maltese families would not face additional taxes, she questioned whether employers would end up absorbing the costs without the underlying problems being resolved.

Borg questioned how revenue from measures such as TCN-related charges and environmental taxes would be spent, calling for clearer explanations of how the money would translate into improvements.

She also said carrying-capacity studies had not adequately informed development decisions and criticised the continued reliance on local plans drawn up in 2006.

Borg also argued that planning policies often applied blanket rules across Malta and Gozo, without sufficiently accounting for the different circumstances and needs of individual localities.