Category: Press Releases

The Malta Chamber of SMEs is concerned by comments made by Minister Clyde Caruana, attributing Malta’s productivity challenges primarily to employers choosing cheaper labour over capital investment.

While businesses undoubtedly have a responsibility to invest, innovate and improve efficiency, it is unfair and overly simplistic to place the burden of Malta’s productivity challenge predominantly on employers.

Productivity is also heavily influenced by the environment in which businesses are expected to operate.

As highlighted in the Malta Chamber of SMEs’ Budget Proposals 2027, improving productivity requires more than investment in technology. It also depends on efficient regulation, accessible skills, effective workforce management and public services that support businesses rather than burden them. The proposals specifically identify traffic, skills mismatch, unfair competition and over-regulation as factors contributing to lower productivity.

Every hour spent dealing with duplicated paperwork, unnecessary administrative procedures, regulatory delays or a lack of coordination between public entities is an hour taken away from productive business activity.

Rather than merely pointing towards the problem, the Malta Chamber of SMEs has put forward a comprehensive set of proposals for Budget 2027 aimed specifically at improving productivity. These include a Mandatory SME Test for new laws, regulations and major administrative procedures, a Regulatory Stocktake, implementation of the Once-Only Principle so that businesses are not repeatedly asked for the same information by different public authorities and a Productivity Tech Kit to help micro and small businesses adopt digital tools and more efficient systems.

The SME Chamber has also proposed measures to encourage productive investment and reinvestment, together with policies aimed at fair competition, improved enforcement, energy efficiency, transport and mobility. The overall objective is to create the conditions that allow businesses to invest, innovate and grow sustainably.

The SME Chamber has also proposed the establishment of a cross-party taskforce on Malta’s long-term priorities to identify the country’s main challenges, agree on a common way forward and provide greater continuity on reforms extending beyond a single electoral term. This is the type of mature and coordinated approach that Malta’s productivity challenge requires.

Businesses must play their part, but productivity is a shared national responsibility. If we genuinely want to invest more in technology, automation and capital, we must also remove the regulatory, administrative and infrastructural obstacles that consume productive time and discourage investment.

Following last Saturday’s election and today’s swearing-in of Dr Robert Abela as Prime Minister of Malta, the Malta Chamber of SMEs extends its congratulations and looks forward to continuing to work closely with the whole Government throughout the new legislature.

Over the past years, Prime Minister Robert Abela and his cabinet have maintained an open channel of communication with the Malta Chamber of SMEs, strengthening constructive dialogue on matters affecting the business community. The Malta Chamber of SMEs augers that this open dialogue remains throughout this upcoming legislature.

The Malta Chamber of SMEs also congratulates all Members of Parliament elected to both the Government and the Opposition and looks forward to maintaining an open and constructive channel of discussion with all sides of the House in the interests of Malta’s SMEs and the wider economy.

The Malta Chamber of SMEs calls on the political parties to exercise caution in regards to the increasing number of electoral promises being announced without any form of prior consultation with social partners, and which would directly impact employers and businesses.

Such measures, without proper consultation, affect the business community and would especially and disproportionately affect micro and small enterprises, which make up the absolute majority of businesses in Malta.

While we recognise that electoral campaigns generate considerable enthusiasm and at times, overly ambitious pledges, we cannot remain passive when such promises have a direct impact on the livelihoods of small businesses and their employees.

Social partners expect to be consulted in advance, on any proposed incentives that may affect SMEs, in line with established practices over the years.

We are concerned that several of these proposals do little to enhance productivity and address the labour shortage, which when implemented through a blanket approach, may prove unsustainable in practice and have repercussions on both businesses and the business community.

The SME Chamber calls for greater maturity and responsibility in public commitments, ensuring that proposals are grounded in proper feasibility assessments rather than driven solely by electoral promises.

Moreover, even measures that do not directly target the small business community can have wider economic repercussions, including possibly reducing investor confidence.

The SME Chamber is currently working on a number of constructive proposals and remains committed to engage with all stakeholders.

The SME Chamber looks forward to seeing proposals targeted at SMEs that genuinely drive productivity and safeguard the wellbeing of employers and their employees.

We welcome discussion on solutions that support sustainable economic growth while effectively addressing the realities faced by Malta’s SMEs

Following the Budget speech, the SME Chamber welcomes the 2026 Budget which will assist SMEs to grow and remain competitive. Initiatives such as the improvement of the Micro Invest Scheme, the increased support for digitalisation and the incentive to invest in R&D are among the measures that will help businesses strengthen and expand.

The SME Chamber notes that a number of its proposals were taken up by the Government and acknowledges that, in preparation for this Budget, the Government, particularly the Minister for Finance organised several consultation meetings with the SME Chamber.

The SME Chamber’s proposals were developed using insights from the quarterly SME Barometer, which consistently gathers feedback from businesses, as well as input from members and targeted focus group discussions. The SME Chamber urges the Government to continue addressing the issues highlighted by businesses in the SME Barometer over the past months, including employee shortages, unfair competition, good governance, and traffic congestion.

The Malta Chamber of SMEs, in collaboration with MISCO, has published the results of the latest SME Barometer (Q3 2025) survey. The study was conducted among 456 businesses between the 6th and 16th of October 2025.

When asked about the most pressing issues affecting their businesses, respondents identified employee shortages as the top concern (46%), followed by unfair competition (23%) and excessive competition (17%). Other key challenges cited include traffic congestion and skills mismatches.

At a national level, overpopulation (36%) remained the most significant concern for SMEs. Other ongoing worries include the lack of good governance (31%) and corruption (26%), while safeguarding quality of life saw a notable increase in importance, rising from 15% in Q2 to 23% in Q3, making it the fourth most frequently mentioned issue.

Business sentiment showed a slight improvement compared to previous quarters; however, 66% of respondents still feel that Malta is moving in the wrong direction. A slightly larger proportion of businesses expressed optimism about the next 12 months compared to Q2.

A special section of the survey focusing on digital transformation revealed that a strong 77% of SMEs recognise the importance of digitalisation for future growth. Among them, 51% are actively investing in digital tools, while 26% acknowledge its importance but struggle with implementation.

The SME Chamber urged the Government to expand financial incentives, such as grants and tax credits to support wider digital adoption.

The SME Chamber recommends increased support for micro and small businesses, including:

• Enhanced Micro-Invest support, raising aid intensity for micro-enterprises from 45% to 65%, and increasing the credit cap for small enterprises from €50,000 to €70,000.
• An additional €20,000 digitalisation capping for businesses adopting digital invoicing ahead of 2030.
• Stronger transparency and anti-corruption measures to rebuild institutional trust.
• Streamlined regulatory processes to reduce bureaucracy and duplication.
• The establishment of a centralised advisory platform to help SMEs access green and digital financing opportunities.

SME Chamber President Mr. Paul Abela stated that “SMEs continue to demonstrate resilience and adaptability, but they need clarity, consistency, and fairness from institutions.”

SME Chamber COO Mr. Andrew Aquilina emphasised the need for Budget 2026 to strengthen support for micro and small businesses, and to enhance schemes and incentives that have historically provided critical assistance to these enterprises.

The SME Barometer Survey is a collaborative initiative between the Malta Chamber of SMEs and MISCO.

Click here to download full results.