There will be 'positive surprise' in Budget 2027, Robert Abela promises

Prime Minister Robert Abela has promised that the 26 October budget will “surprise in the positive”, despite the international crisis.

In a Sunday interview with Owen Galea, head of TVM News, Abela described the budget as expansionary, saying it would continue shielding people with “positivity and confidence”.

His message contrasts with Finance Minister Clyde Caruana’s tone when he unveiled the pre-budget document on 30 September. Caruana said spending was being prioritised, flexibility was required and the manifesto must be implemented over five years.

“People know that what we promise we will deliver, but this is a time for responsibility and to protect the economy,” Caruana said.

Asked whether previous budgets had been irresponsible, Abela said each had addressed its circumstances, including the pandemic and energy and food price crises. Caruana’s reference to responsibility did not mean the government would be tight-fisted, he said.

Income tax would fall again for parents from 1 January, while VAT and social security contributions would remain untouched. Pensions would be strengthened and the cost-of-living increase paid. However, manifesto measures would be implemented over five years according to priorities.

Abela gave a “clear and absolute guarantee” that electricity, water, gas, petrol and diesel prices would remain stable. Caruana has put this year’s subsidies at €400 million and forecast a similar amount next year unless global conditions change.

Asked about DBRS projecting the subsidy burden rising from 0.8% to 1.2% of GDP, Abela said Malta’s debt burden was among the EU’s lightest and the deficit would remain below 3%.

He put inflation at 2%, down from 2.1% in August, arguing that removing subsidies would raise retail prices, reduce household spending and cut government revenue.

Asked whether blanket subsidies were unfair or encouraged waste, he said the message against waste must remain. Restricting help to households would leave businesses passing higher costs to consumers, he argued.

Free childcare, public transport, education and health care would remain and be strengthened. Social and health spending would receive substantial priority.

Abela said the tourism summit held in Malta that week attracted about 1,000 delegates and substantial investment commitments.

Tourist arrivals would exceed four million this year, he said. Spending reached €3.9 billion last year and €3 billion in this year’s first eight months.

He rejected a cap on arrivals, saying Malta should focus on the tourists it attracted. The budget could use fiscal measures to discourage disruptive visitors.

On-the-spot fines would rise, while tourists who misbehaved could be expelled or discouraged from entering. Enforcement had increased in Swieqi after his meeting with the council.

On foreign hospitality workers, he said service quality depended on training rather than nationality, defending the skills pass despite its additional burden on businesses.

Discussing Med9, Abela said the EU and international community lacked the will to make a difference in the Middle East. He cited US sanctions on Russian diesel imports as evidence of rapidly changing geopolitical conditions.

He warned that emissions trading rules could weaken European competitiveness and divert shipping towards North African ports, while insisting environmental targets should remain.

On traffic, Abela pointed to road projects and expanding ferry services. Mass transport required technical and viability studies, including the government subsidy needed. A prime minister who proceeded after a failed viability test would have lost his mind, he said.

He said the cabinet, including Caruana and Transport Minister Chris Bonett, agreed on this approach. He rejected parking meters and higher vehicle licence fees, preferring incentives.

Abela attributed that week’s power cut to engineers accidentally activating a protective circuit breaker during testing while the first interconnector was switched off. He called it human error in good faith and said he would not censure anyone.

The second interconnector would operate by next year’s first quarter, adding 200 megawatts. Three distribution centres would open within days, and two additional cables were likely for Gozo.

Abela rejected criticism over implementing the Daphne Caruana Galizia inquiry recommendations. Criminal association already carried lengthy prison terms, he said. A specific mafia offence would deter investment and brand Malta a mafia state, he argued.

Journalist protection laws would go to parliament after consultation, extending anti-SLAPP protection to domestic cases. No professional warrant would be introduced for journalists.

The €120 million Mater Dei investment included a 135-bed psychiatric hospital and doubling the emergency department. Bringing mental and physical care together would combat stigma, he said.

Mount Carmel investment would continue during construction. Suicide figures worried him, while professionals should identify their causes. People unable to work after acute mental health episodes would receive up to two years of credited social security contributions.

Abela said 85% of Maltese and Gozitan families owned their home. Rising land, material and labour costs drove property prices, he argued, pointing to expanded first-time buyer assistance and equity sharing.

Asked what he should deliver within two years, Abela named a leading economy and labour market, continued energy assistance and completion of electricity distribution improvements alongside investment in generation and alternative sources