Momentum Responds to Budget 2027: A Mix of Superficial Fixes and Missed Opportunities for Structural Change

Following the Budget 2027 speech by Finance Minister Clyde Caruana, Momentum notes a budget that offers a number of positive measures but ultimately fails to address the structural, environmental, and governance crises plaguing Malta.

While there are welcome steps, such as the decrease in income tax for couples with children and the reduction of corporate taxation to 25% for companies with a turnover under one million euros, these do not go far enough. To ensure a truly level playing field for Maltese businesses, this corporate tax reduction should have been accompanied by an increase in taxation for foreign companies. Furthermore, the government has glaringly failed to lead by example on governance. There is absolutely no reduction in the 567 persons of trust employed by Ministers, costing the taxpayer around 20 million euros annually.

A central failure of this budget is its deeply unjust approach to TCNs. The removal of free public transport, the introduction of a 400 euro infrastructure fee, and the hike in permit application fees to 800 euros place an unbearable burden on low-income earners. A TCN on minimum wage will now face 772 euros in new annual costs before even accounting for rent and food, wiping out over three weeks of their basic income.

Mark Camilleri Gambin, General Secretary of Momentum, condemned the new measures targeting foreign workers: “Making life difficult for TCNs is a senseless approach that solves zero structural issues. Removing free childcare for those who have been here for less than five years means these individuals cannot work or start a family. Is this how we reward the essential workers our country relies on? Let us remember that these people already pay their taxes and national insurance contributions like the rest of us”

Momentum proposes a fairer alternative: the infrastructure fee should be placed on those businesses with more than 50 employees where TCNs make up 30% or more of the workforce. The current setup reveals a blatant double standard. While TCNs are hit with immediate, heavy burdens without any consultation, the “airspace tax dodgers” are given a mere warning and told that changes are “subject to consultation”. It is clear that developers who finance the established political duopoly continue to dictate the budget.

On the healthcare front, the budget represents a major step backward. The apparent cancellation of the 1400 private hospital emergency agreement threatens to return Mater Dei to a state of severe overcrowding. Momentum has already received reports of the emergency line going unanswered, raising serious concerns that this highly beneficial service has been quietly suspended to fund superficial bonuses.

Momentum Leader Arnold Cassola addressed the broader demographic and environmental shortcomings: “The government presents a 10 euro rise for pensioners, yet conveniently hides that 6.41 euros of this is the standard COLA given to the entire population. It is an illusion of generosity. Meanwhile, our environment and infrastructure are left to collapse. There is no capping on the four and a half million tourists projected for 2026, and the 5 euro Comino eco-contribution is useless unless it goes hand in hand with strict daily limits on visitor numbers.”

While an increase in the tourist eco-contribution is a positive move to help reduce numbers, a substantial portion of these funds must be handed directly to the local councils impacted by overtourism. The exemption of language school students from this tax also directly contradicts the government’s rhetoric of attracting “quality tourism”.

Finally, the budget offers absolutely zero investment to mitigate the daily traffic crisis, dooming residents to remain stuck in gridlock for hours a week. There is no mention of transitioning the Gozo ferries to zero-emission hybrid or electric vessels, a lack of funding for Research and Innovation, and no new initiatives to encourage young Maltese citizens living abroad to return home.

Momentum will continue to push for a just economy, genuine environmental protection, and a governance model that prioritises the well-being of all residents over the interests of a select few.

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