Budget 2019 (Updated)

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Update: Prime Minister Joseph Muscat called the 2019 budget one that gives, and doesn’t take.

Addressing the press outside Castille, right after the Finance Minister delivered his budget speech in Parliament, the Prime Minister repeated a flurry of measures to help different sectors of society, while also speaking about a few which were not mentioned Finance Minister Edward Scicluna’s speech. The Malta Independent

Workers were seeing a reduction of their wages in real terms and the Budget had done nothing to address the situation, Opposition leader Adrian Delia said on Monday.

He said the cost of living adjustment given in the Budget, at just €2.33, was literally eaten away just in the past few weeks with increases in food prices. Times of Malta

Finance Minister Edward Scicluna is presenting the budget for 2019 in Parliament this evening.

In his opening statement, Minister Scicluna said that this is the second budget of the legislature. The government kept up its vision to put Malta among the best countries in the European Union, from an economic and social point of view. This vision has become a reality and is being taken for granted. Minister Scicluna said that year after year the country is achieving better results – economic growth, increase in employment, reduction in unemployment, budget surplus, reduction in debt, increase in local and foreign investment, increase in private consumption, increase in exports and tourism growth.

This contrasts sharply with other European countries and with what used to happen before 2013.

In an overview about the economic performance  a budget surplus for the third year running was registered. He referred to the drop of the public debt to nearly 47 per cent of GDP. The Maltese economy in real terms rose by 6.7 per cent while in the first half of 2018 it grew by 5.4 per cent. The EU has a 2.2 per cent average growth. Private consumption rose by 6 per cent. The number of people in employment exceeded 200,000 and the lowest unemployment rate ever was reached at 3.8 per cent in August. Youth unemployment dropped to 8.8 per cent.  The government will be ensuring that public finances remain sustainable; we have achieved a surplus for the third year running. He added that at the same time the government will maintain its promise and for the second time in a row will not be introducing any new taxes. There has been an unprecedented drop in unemployment. Families suffering from material deprivation has fallen from 20 per cent in 2012 to 8 per cent in 2017.”

In his concluding remarks, he said that was the first budget with an unprecedented amount of new measures, the second budget without taxes, the third budget with a surplus, the fourth budget with an increase for pensioners, the fifth budget offering in work benefit and the sixth budget offering citizens free childcare and the seventh budget with a reduction in taxes.

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Some of the measures announced:

• Government will publish the strategy about the and white paper for the voluntary sector. Thos NGOs which don’t have income which exceeds €10,000 will not be exempt from VAT.

• Government will continue its fight against corruption in sport through the setting up of an Integrity Commission. The Government will also conclude the building of indoor swimming pool at Cottonera.

• A number of initiatives were announced to improve the health service, both with works and introduction of services at Mater Dei, and also the government is planning to extend the works of the various clinics in the localities. Government will be investing in more medicines to improve medical services. New treatment for cancer will be provided. More investment will be made in the cure of hepatitis C and HIV with the aim of eradicating this disease from Malta.

• Government announced the set up of a mental health clinic in the north of Malta. A specialised clinic providing sensory integration therapy will be developed at the Marsa primary school

• The process for third country nationals to apply for work permits has been simplified and Identity Malta will now be setting up a board to ensure that all rules are being followed. The agency will be introducing more online facilities and offering more services in Gozo.

• Gozitan patients who still need to travel to Malta for treatment will be have their travel reimbursement extended to adults accompanying patients to Malta.

•  The Individual Investor Programme will be strengthened. Studies show that Malta has the most rigorous due diligence process, making it an exclusive programme. The benefits received go beyond financial aspects. Malta is attracting new investment, talent and human resources.

• Paceville will see the installation of security systems based on face recognition. It is also evaluated to have it installed in Marsa for security reasons. This will be based on the notion of a Safe City.

• The police Force will have a new Command and Control Room and police cars will be modernised. A 10-year-plan for the regeneration of the Civil Protection Department will start.

• Government will strengthen the work of the customs to fight illicit trade. There will be scanning introduced at the Grand Harbour as similarly existing at the Freeport.

• Government is to introduce a fund to encourage local councils to propose initiatives for a better lifestyle.

• Air Malta’s strategy is aimed at focusing on its core business. The airline registered increase in passenger and for the first time it did not register losses.

• There will be emphasis on setting up of start-up visas to attract more companies in Malta, with start-up potential and introduce more co-shared office space to develop this. There was also reference to the introduction of seed-capital investment.

• The government is also analysing the introduction of laws for other disruptive technologies, such as Artificial Intelligence and the Internet of Things.

• The Malta Stock Exchange will continue its work to open up to companies that operate in the blockchain and cryptocurrencies sector. In the meantime the government will also work to develop on the fintech sector and help start-ups in that field.

• The country is committed to fight tax-avoidance, through collaboration with other countries, through the strengthening of the country’s tax systems and increase transparency.

• Government is against tax-avoidance and want to attract companies which are productive and serious foreign investors.

• Malta Enterprise is expected to launch business advisory service intended to help local SMEs whose business depends on the UK market. Meetings are also taking place to attract investment to our country once Brexit comes into force.

• The government will also promote use of renwable energy. Enemalta will invest in its distribution centres in Paceville, Marsascala and Kappara. A tunnel linking the reverse osmosis plant at Pembroke and the Ta’ Qali reservoirs is in the making. Government will be working on a study to curb road flooding.

• Government said that it is committed that prices of fuel and energy will be fixed for long periods.The government announced that it has plans to regulate commercial waste in a sustainable way. Discussions will start on a scheme for the return of drink bottles.

• There will be a tree planted for every car imported in the country.

• Government will be offering incentives to private entrepreneurs who are interested in developing parking areas.

• The 700 million euro project on road reconstruction has started, and next year 100 million will be spent in this regard. Meanwhile, open air areas will be converted into public gardens, with an investment of one million. The Malta Independent

• Tal-Linja Card will now be available also to 14- and 15-year-olds, apart from 16-20 as was the case in the past year.

• MATSEC examinations will be held completely for free. TVM

• Prof Scicluna also announced that the marriage grant is to rise to €2,000 from January 1, an increase of €250. Vat charged on e-books and musical instruments will also be reduced to 5%.

• The first-home and the second-home buyer scheme will be extended. One News

• The government also announced plans for an equity sharing scheme aimed for those aged over 40 forced to rent because they cannot afford to buy a house.

• Rent subsidies announced last year will be improved and the means testing they were previously subject to will be waived, because the system had been penalising lower-middle-income people.The rent subsidy will be raised to €3,000 for single persons, from €1,600, and up to €5,000 for a family with two children, subject to a number of conditions which will be announced in the coming weeks. Incentives will also be announced for landlords who rent out their properties on long lets below market price. They will receive a substantial discount on capital gains tax due when the property is eventually sold after the rent expires. – Times of Malta

• Workers will be given a 2.33 euros a week. An extra day will be added to vacation leave, for a total of 26.

• Pensions will increase again. Pensioners will get 2.17 euros per week extra in addition to increase in the cost of living adjustment.

• Children’s allowances are to be increased for families with an income of less than 20,000 euros for a maximum of 96 euros per child, a measure that will be for the benefit of 24,600 children.

• Those employed with the minimum wage will be given an adjustment in the second year of their employment, with a €3 increase a week. In their third year of employment, they will be given another €3 weekly increase. This means that workers who this year were on the minimum wage will benefit from €6 a week increase within a period of two years. Meanwhile, the cost of living increase will be €2,33 a week for everyone. TVM

• People in government employment who would like to stay on in their job after reaching pensionable age will have the opportunity to do so.

• Those who bought cars in 2008 will be getting the last repayment of VAT paid on registration.

• People who receive a disability assistance  will be receiving 150 euros (instead of 140) as from January. Allowance to families with children having a disability will increase to 25 euros per week (up from 20). TVM