The Budget 2022 will send a strong signal on environment and on quality of life – Finance Minister
Finance Minister Clyde Caruana announnced that next year’s budget will provide a great signal with an investment of millions of euro which will be spent for not only a better health, but an environment that permits a better health.
With the theme ‘x’pajjiż tixtieq tħalli lil uliedek’, Minister Caruana presented the pre-budget document for public consultation with the priorities expected to include the stregthening of the country’s labour force, health and an economic development leading to a better quality of life.
At the same time, he warned that while the Government will not increase taxes, it will do its part to collect the money due to country’s income, while warning that the time has come to end the failure of declaring income and fiscal evasion. He said that as abuse in registering for work decreased in the past, now we have to act to reduce fiscal evasion.
In a detailed presentation, Minister Caruana said that the pandemic left a great impact on everyone’s life and despite the challenges, the country has a great potential ahead. He said that the country will come out stronger from the pandemic, compared with others.
He said Malta’s economic growth was the second strongest in the EU, much bigger than other EU countries. The pandemic had a great impact on the economy, however the economic machine remained intact and strengthened.
The Finance Minister said that economic growth next year will greatly surpass the economic growth of EU countries, with the economy expected to grow by 6.8% in 2022.
During the pandemic, the Minister said that Malta looked after the labour market and today, persons registering for work continued to decrease. Because Malta took action which cost big millions through salaries supplements, he added that unemployment in Malta is as the lowest levels possible.
He said that Malta registered the biggest increase among EU countries, where almost in all countries the amount of persons in employment decreased in recent months, while this was not the case in Malta. Despite all the difficulties, he said Malta managed to surpass everyone, and because it took decisions at the right moment, the country managed to fair better than other EU countries.
Minister Caruana added that Malta had the second largest reduction in the EU of persons who weren’t economically active, so much so that the labour force in Malta is the strongest in the EU.
Minister Caruana added that the pandemic led to the drastic increase of Government expenditure. He said that revenue decreased and from a surplus we passed to a deficit. He described as a courageous decision to spend millions, through which the labour market strengthened and will bring more income to the Government.
Next year, the deficit will decrease from 12% to 5.6%, with the Minister saying that this will occur not because the government will introduce new taxes but because the economy will provide more income and it will once again stabilise itself.
Referring to the 65% stable level of the country’s debt, the Minister said it is under control despite the pandemic. Many EU countries have surpassed the 100% mark in debts, including Germany which is nearing the 100%.
He reiterated that the Government will not cut expenditure and introduce taxes, but will tackle econonic growth.
He announced that the pandemic has cost €1.5 billion in two years, with the money going to keep the families and the economy going.
Minister Caruana stated that we will again have a positive budget not because it is the last one of the legislature.
The Finance Minister said that the labour market policy is almost ready and will be launched a week before the budget. In the past, he added, the country had among the lowest rate of persons in employment, however with recent years decisions, the country is in the forefront but will be the first in the next nine years.
Malta will launch the government’s vision of where it is heading and how it will work. He said that the measures to be announced in the new policy will be implemented because there is planning and resources for them.”Employers will have peace of mind that Malta’s labour force will be strengthened, resulting in economic growth and with the government having more finances”, Minister Caruana added.
The social framework
The Finance Minister said that the increase of workers in employment led to the decrease by over a half of persons who depended on social benefits. From 15,114 in 2013, these persons decreased to 6,469 and are still decreasing despite the pandemic.
He said that expenditure on social assistance and unemployment assistance decreased by €36.5 million between 2014 and 2020, while the Government will strive on to further decrease persons in risk of poverty.
Today, the pensions burden in Malta is nearing one billion euro, that is 6.5% of the GDP. The Minister said that the Government has resources for them and the Budget 2022 will cater well for them.
With EU funds, this budget will send the first signal on the amount of millions that will be spent so that the environment permits a better quality of health, adding that the environment will be among the pillars of the next budget. “We will be changing the country’s culture in this sector also”, Minister Caruana said.
He further stated that the health sector is the sector that absorbs most Government resources. The expenditure increased and is still increasing because, he added, we are living more and everyone pretends the right that livelihood is better. He announced that in next year’s budget a number of new other medicines, costing millions, will be added to the Government’s formulary.
Where are we heading?
For a country where the quality for economic growth should reflect the better quality of people’s lives. The Minister stated that people want more, something better and this will be what the Budget will do. “The quality of life – economic development means economic growth, a better quality of life, a social sector and a better environment. We can implment all this because the country has its resources”, Minister Caruana said.