Deputy Prime Minister Ian Borg, Economy Minister Silvio Schembri and Labour candidate Clint Azzopardi Flores have underlined Labour’s economic credentials, arguing that Malta’s next phase of growth must be built on credibility, stability, innovation and clear costed measures.

Addressing a press conference themed “Credibility in Economic Leadership in Malta”, Borg said Labour in Government has consistently shown competence in economic management since 2013, irrespective of the international circumstances faced by the country.

He said Malta’s economy has tripled in size compared to 2012, while the country has reached full employment and experienced unprecedented growth in the labour market. Malta, he noted, has for years registered the strongest employment growth in the European Union, with an employment rate of around 86%, the highest in Europe.

Borg said this economic strength allowed Malta to withstand major shocks, including the pandemic, when Government paid private sector wages and provided direct incentives to the public, as well as the war in Europe and instability in the Middle East, which pushed up the prices of energy, wheat, cooking oils, fertilisers, oil and gas.

Despite these pressures, he said Maltese workers and businesses remained protected from shocks that could have undermined their competitiveness and stability. Labour, he added, is pledging to continue doing the same.

Borg said the Int Malta manifesto is built on certainty and stability, with clear economic targets for the next five years. These include average real economic growth of 4% every year, with more than two-thirds of growth generated by digital sectors, services and high-value manufacturing.

He also said Labour wants Malta to remain in a full employment situation, with unemployment close to 3%, including youth unemployment, and among the lowest in the euro area.

On innovation, Borg said Malta aims to join the most advanced countries in the European Innovation Scoreboard, while increasing the share of businesses using artificial intelligence. He noted that between 17% and 20% of Maltese businesses currently use AI, with the target being to raise this to 40% within five years.

He linked this to the recently announced AI for Everyone initiative, through which people will receive training in artificial intelligence and then a one-year subscription to either ChatGPT Plus or Microsoft 365 Copilot.

Borg said Malta’s progress now gives the country the ability to choose the kind of investment it wants to attract, giving priority to investors aligned with Malta Vision 2050 in sectors such as digital, maritime, quality tourism, aviation and advanced manufacturing. Applications linked to these priority sectors, including assistance schemes, permits, licences and registrations, would be processed in the shortest possible time.

Economy Minister Silvio Schembri said economic leadership requires foresight, because the economy is not static but dynamic. He said Labour had strengthened the economy since 2013 despite the pandemic and recovery period, and must now prepare for the next phase.

Schembri said one of Labour’s key proposals is to allow companies with turnover of up to €1 million a year to be taxed at 25% instead of the current 35% on profits that are retained or reinvested in the company.

He said this will allow businesses to keep more funds available to strengthen their operations, make better profits and invest more in their workers and future growth.

Schembri also highlighted Labour’s commitment to sustain an annual investment of €100 million in digitalisation and the adoption of advanced technologies, including artificial intelligence, the Internet of Things, cybersecurity, augmented and virtual reality, blockchain, quantum computing, deep tech and robotics.

He said this investment will be translated into training and financial support so that businesses can integrate advanced technology into their operations.

The Minister also noted that Malta has been ranked fourth in Politico’s European Digital Capacity Index, after Denmark, Sweden and Finland. Quoting Politico, he said Malta’s performance shows “a highly concentrated and politically prioritised approach to digital governance and public service delivery”, resulting in strong performance across key pillars.

Building on this, Schembri said Labour will allocate €120 million to a digital transformation scheme offering businesses a 60% tax credit on investment in digitalisation, automation and AI. Companies benefiting from this scheme will be able to receive up to €15 million over four years to carry out this technological shift.

He said this measure will not only improve business competitiveness, but also reduce the need for foreign workers in certain areas, such as manufacturing.

Schembri also pointed to new and emerging economic sectors. He said Malta will develop a new regulatory framework for Web3 innovation, covering areas such as tokenisation, digital assets, decentralised autonomous organisations and smart contract-based finance tools.

He also spoke about the space sector, saying Malta has launched a National Space Strategy, completed consultation on its first regulatory framework for the sector, strengthened cooperation with the European Space Agency, and signed the Artemis Accords. This, he said, lays the ground for high-value activity in space data services and applications.

Schembri also said Malta will look at emerging sectors such as prediction markets, building on the success achieved in iGaming, with a clear and modern regulatory framework focused on consumer protection, market integrity and responsibility.

On MedTech, he said Malta has already attracted internationally reputable companies, opening the way for a stronger ecosystem that creates quality jobs while giving the country access to the latest technology in healthcare.

Labour candidate Clint Azzopardi Flores then focused on measures for self-employed workers, bureaucracy reduction, innovation and digital entrepreneurship.

He said that just as Labour has supported companies, it will also leave more money in the pockets of the self-employed through the new SMEBoost scheme. Under this measure, self-employed workers will continue paying social security contributions at 15%, but will receive a grant equivalent to 5% of the declared wage, effectively bringing their contribution down to 10%.

This will translate into a yearly grant of between €627 and €1,428.

Azzopardi Flores said Labour will also launch a Government-wide business process reengineering exercise to simplify procedures and reduce bureaucracy by 35%. This will make use of concepts such as AI and the once-only principle, building on Malta’s strong performance in European eGovernment rankings.

He also highlighted a 175% tax credit on research and innovation expenditure, together with accelerated depreciation over two years for investment in AI, digitalisation, automation and cybersecurity.

Another proposal is Malta eResidency, a digital base for international entrepreneurs who want to establish and run a business in Europe online. Through this programme, foreign entrepreneurs will be able to set up a company in Malta digitally, fulfil administrative obligations online, access digital services and use Malta as a regulated and credible base within the EU.

Azzopardi Flores said this will attract start-ups and small companies to Malta without adding pressure on infrastructure, the environment or population, while creating demand for professional services already offered by businesses operating in the country.

The message from the press conference was that Labour is presenting an economic plan based not only on ambition, but on costed measures, proven delivery and a clear direction for the future.

From a €120 million digital tax credit scheme and €100 million annual investment in advanced technologies, to SMEBoost grants, a 25% tax rate for reinvested profits, and a 175% research and innovation tax credit, Labour argued that Malta’s next economic leap will depend on credibility, competence and the ability to turn growth into better opportunities for workers, businesses and families.