With the theme, “Maltin b’Saħħitna ‘l Quddiem”, Finance Minister Edward Scicluna presented the Budget for next year with a total expenditure of over €5,700 million.
The budget is free from new taxes and should be taken in the context of the extraordinary time the people are living in due to the Covid-19 pandemic. The Government is committing itself to resume with the salary supplement assistance till next March and that, at the beginning of next year, it will again distribute the €100 vouchers to every person, aged over 16.
The measures include an increase in a number of social benefits such as children’s allowance, thousands of new families will start enjoying the in-work benefit, and an increase was also announced in tax refund to workers together with the cost of living compensation, which will be fully given to pensioners who will also benefit from another weekly grant.
In this fourth budget during this legislature, Minister Scicluna announced a €1.75 weekly increase in cost of living. Apart from the cost of living compensation, pensioners will be given another €3.25 for a total of a weekly €5 increase.
For next year, there will be over €100 million in direct expenditure in the economy – three times more than normal. This injection is intended for the extension of various schemes and social benefits that are directed to more persons: from workers to pensioners….and persons with disability who, similar to elderly persons, will be eligible for the scheme of payment of part of a carer’s salary employed in their home. Over 16-year old youths who will continue studying will be given a one year free internet.
The salary supplement will continue till March of next year. The Government is committing itself to keep the current format and by the end of the year, it will continue to forge out €30 million a month. The Government said that for the first quarter of next year it will keep the flexibility of attending to the needs of particular sectors and responding according to the prevailing labour market trends.
In the Budget, the Government voted €50 million for issuing again the €100 vouchers in January to all those over 16 years of age. This time, €60 will be allocated to spending in accommodation and restaurants and the other €40 for businesses and services spending.
In these challenging circumstances, the Finance Minister said that the Government will resume with its commitment towards Air Malta and announced that it has just requested the European Commission to authorize it to provide financial assistance to the national airline. This is not permitted in normal circumstances.
The Budget is being presented in extraordinary context with world-wide economies facing great difficulties due to the pandemic. The Government is expected to close the year with a 9.4% deficit of the Gross Domestic Product, which went down to 5.9% last year. This is slightly less than that being predicted by other EU countries. The Finance Minister stated that Malta’s position regarding national debt is much better than that of competitive countries. Malta is projecting that next year it will have a debt in the level of 59%, while Germany estimates that its debt will rise to 70%; the U.K. to surpass 100%; Spain – 120%, while Italy’s debt is expected to go up to 160%.
Minister Scicluna added that recent year’s surplus assisted the Government to refrain from introducing new tax burdens, while it has enough space to provide incentives for economic growth and attract new investment. In order to achieve this aim, the Government announced in the Budget a series of initiatives by the Malta Enterprise both to assist new enterprises and businesses and other established ones, while it will launch advantageous schemes to attract new foreign investment. The Government estimates that for another year the Maltese economy will grow by 5% in real terms.