[WATCH] Finance Minister unveils Budget 2022 document

Pensions increase, free public transport, and higher in-work benefits - here's what's in stock for Malta 2022

Finance Minister Clyde Caruana (photo: James Bianchi/MaltaToday)
Finance Minister Clyde Caruana (photo: James Bianchi/MaltaToday)
Malta li rridu għal uliedna 🇲🇹 | Id-Diskors tal-Budget 2022

Malta li rridu għal uliedna 🇲🇹 | Id-Diskors tal-Budget 2022

Posted by MaltaGov on Monday, October 11, 2021

Finance Minister Clyde Caruana has unveiled Malta’s Budget 2022 document in parliament today under the slogan ‘The Malta we want for our children’.

This was Caruana’s first budget speech as Finance Minister, having been appointed in November 2020 following the resignation of Edward Scicluna.

The cost-of-living adjustment (COLA) is set to increase to €1.75, and a higher threshold for the in-work benefit was announced during his speech.

Workers earning up to €20,000 and who are not in a managerial position, will benefit from a flat 15% tax rate on the first €10,000 they receive from overtime work.

With regards to the yearly tax refund, the highest obtainable refund will amount to €140 while the lowest refund will be €60.

Free childcare services will be extended for parents who work late hours, shift and weekends. Income tax for working pensioners will be levied only on work income, not pensions.

21:14 And that’s the budget. Thank you for following with us at MaltaToday. You can look to our home page and Budget 2022 section to see our full coverage of the speech. Thanks again and good night. Nicole Meilak
21:13 Over the next year, government will begin exploring the possibility of opening a modern rehoming center for animal adoption, including for animals living on the streets. Government will expand the ‘I belong’ project, and will implement an anti-racism strategy with social partners and the media. Nicole Meilak
21:10 Preparations will be intensified from next June so that, for two full years during 2023 and 2024, Malta will have a non-permanent seat on the United Nations Security Council. In recent weeks, diplomatic officers have been deployed so that they can gradually establish for the first time a Diplomatic presence in Brazil and even in Ethiopia. Nicole Meilak
21:07 Over the next year, the Community Policing service will be extended in various localities including Żabbar, Xgħajra, Marsaskala, San Ġwann, Żebbuġ, Gżira, Msida, Pietà, Mosta, Mġarr, Żurrieq, Ħal Safi and Ħal Kirkop. With an investment of around € 50 million, work is underway on a new ferry to be added to the Armed Forces Maritime squadron. Nicole Meilak
21:06 A work plan has been drawn up so that the Maltese authorities can address the action plan provided by the FATF. Government will ensure that the Attorney General's Office continues to take on additional prosecution functions in coordination with the Police with a view to developing a specialized prosecution service in the Attorney General's Office Government will invest in legal aid to create a digital system where prospective clients eligible for legal aid can apply online, as well as from the servizz.gov service hubs located in regions and villages around Malta. Nicole Meilak
21:03 The income tax rate for performers will be 7.5% and will apply from the base year 2022. For income tax, government will introduce a mechanism that sets artists' income over an average of 3 years. €1 million will go towards a guarantee scheme for independent artistic activities with the aim of helping producers and promoters to recover costs of unexpected restrictions. An aid scheme for seats that can’t be sold due to health restrictions will be strengthened, and a support scheme will be created for independent art projects. Nicole Meilak
21:01 Sport Malta will invest in the Marsa Complex, the 80m Olympic size swimming pool in Cospicua, and works will be done on water polo pitches in Marsaskala, Valletta and Marsaxlokk. A new football stadium will also be built in Msida.

For rowing enthusiasts, Sport Malta will also invest in a national rowing tank. The Outdoor Velodrome project will be incorporated into the ongoing Ta’ Qali project. Gozo and Gozitans will be enjoying an Olympic level swimming pool as well as a new sports pavilion in the heart of Victoria, Gozo.
Nicole Meilak
20:57 Remote Patient Monitoring - a pilot project that was introduced to monitor regular and continuous blood sugar levels in children under the age of 16 with Type I Diabetes - will continue to be sustained and gradually extended to young people aged 17 to 21 suffering from the same condition. Nicole Meilak
20:56 Until a new Acute Psychiatric Care Hospital is built, a facility for an acute psychiatric hospital will be rented. An increase in the capacity of the services offered by Mount Carmel Hospital is expected to translate into a number of initiatives that support assisted living in the community. In the meantime, the modernization of the wards of Mount Carmel Hospital will continue. Nicole Meilak
20:55 Government will build a new blood bank, as well as a specialized center for blood collection, processing and storage of tissues and stem cells. Government will also invest in the infrastructure of the hospital’s emergency department and the medical imaging department as well as the third cardiac catherisation suite. Additional facilities will be developed at Mater Dei to address the growing demand for acute and elective care services. Nicole Meilak
20:53 In order to incentivize effective farming and increase organic production government will be giving incentives to landowners to enter into an arrangement with farmers who want to work the land for organic production. In order to ensure that there is no fraud in the sale of Maltese agricultural products, government will be strengthening control in the Malta Food Agency by setting up an enforcement unit. Government will carry out projects to improve the infrastructure of pillars that offer electricity and water services inside the fishing ports, as well as to improve the facilities of Landing Sites in Gozo.

In order to maximize the use of agricultural land for food production while achieving the goals of the Farm to Fork strategy, government will be launching a carbon farming initiative. Through this initiative government will offer grants of up to a maximum of € 8,000 to incentivize farmers who have agricultural land that is not cultivated or that is currently out of production or under low value production in order to convert it into farming systems.
Nicole Meilak
20:49 The first reverse osmosis, designed by the Water Services Corporation, will start operating in Hondoq ir-Rummien in Gozo, with an investment of around € 11 million. The New Water network will be extended, and the sewage system in the North and South of Malta will be strengthed to help meet demand and improve the marine environment. Nicole Meilak
20:47 A new ARMS system will be introduced, whereby consumers can save unused cheaper units so that they can be used during periods of higher consumption. There will be no loss through the Feed-In Tariff, and no one will miss out from the Eco-Reduction. Nicole Meilak
20:44 After securing a derogation, studies on the technical and financial feasibility of hydrogen transmission using the pipeline will be carried out during 2022. “In addition, to improve the quality of service, we will accelerate a strong investment plan in Enemalta's Distribution network. We will invest in various voltage levels and will continue to increase network automation. We know that in an extensive network, it is natural to experience some damage. Nevertheless, we are committed to shortening both the number of times and the delays in interruptions, in order to better serve the public.” Nicole Meilak
20:43 “The Waste to Energy plant will be absorbing the largest investment but we are also increasing other capital allocation to strengthen and improve the infrastructure owned by the company,” Caruana said.

Smart bins will be introduced with controlled access and continuous monitoring so that commercial entities can separate waste at any time of the day. Reuse Centers will be introduced in Bulky Waste Centres, and government is considering the setting up of a “repair center”. In addition to providing repairs, the center may also offer the opportunity to exchange used items and transform items for alternative use, better known as repurposing/refashioning.
Nicole Meilak
20:39 The Government will be investing in changing the vehicle registration system. The Vessel Tracking System will also be changed to a more modern one, which will meet the needs of both Transport Malta, responsible for port security, and the Army. “In addition, we will be making a digital investment to modernize the register of ships, so that Malta continues to strengthen its place in the maritime field.” Nicole Meilak
20:38 Malta Enterprise will launch a scheme designed to assist enterprises in converting fuel-powered vehicles to electric-powered vehicles and other solutions. The scheme will cover part of the cost difference between fuel-powered vehicles and electric-powered vehicles. In the next three years government will be installing around 1,200 charging points nationwide. Nicole Meilak
20:37 “We will launch a new scheme where vehicles such as minibuses, coaches and trucks on which the photovoltaic panels are installed, will be awarded a grant of up to € 900. We will be launching a scheme to attract minibus and coach operators as well as trucks to reduce smoke emissions from their vehicles through the installation of diesel particulate filters (DPF) and selective catalytic reduction systems (SCR).” Nicole Meilak
20:36 Schemes where a grant equivalent to a full refund of VAT on bicycles and electronic bicycles is being granted will be extended again. The same applies to the scheme that incentivizes the purchase of motorcycles, scooters, pedelecs and bicycles assisted by an electric motor and the grant for those who change their vehicle to run on gas instead of petrol. The scheme for wheelchair accessible vehicles used for the carriage of passengers for hire or reward will also be renewed. Nicole Meilak
20:35 “We will extend for another year, those measures related to the purchase of electric vehicles, which include exemption from registration tax and exemption from the payment of the annual road license for a period of 5 years from the date of first registration, for electric vehicles and plug-in electric vehicles. From the beginning of 2023, the capping of plug-in hybrid vehicles will increase from 30 kilometers battery life to 50 kilometers. The special rate applicable to residential homes for individuals who have an electric vehicle and want to charge the battery at night as well, will remain in place.“ Nicole Meilak
20:33 Public transport will now be free for all residents of Malta and Gozo. Following the success of the Malta-Gozo fast ferry, government will increase the number of quays to provide alternative routes away from public transport. The financial grant for the purchasing of electric vehicles or plug-in hybrid will be increased by €3,000 to €11,000 as from tomorrow. If the vehicle scrapping scheme is used, this grant will rise to €12,000. The funding for the scrapping vehicle scheme will increase by €1,000 to €2,000. Nicole Meilak
20:29 The shore-to-ship project in the Grand Harbor will continue, while calls for tenders will be published in connection with the shore-to-ship project at the Freeport. Two projects will be launched for batteries dedicated to renewable energy storage, and a fund will be set up for government buildings to be fitted with solar panel systems.
New and efficient street lighting will be installed in Valletta, and a sustainable community development scheme will be set up through local councils. A starter-kit of sustainable children’s products will be distributed to parents.
Nicole Meilak
20:26 In partnership with the Malta Environment and Resources Authority and the Environment, government will continue to carry out the Management Plans of Natura 2000 Sites where it will continue to carry out natural habitat conservation interventions.

In 2022, more investment schemes will be available to purchase solar panels and batteries to store electricity generated by those panels. A grant will be available for the restoration of domestic wells and purchase of solar water heaters and heat pump water heaters. Schemes for the restoration of wells in residential homes, the scheme for the replacement and purchase of reverse osmosis, will also be extended.
Nicole Meilak
20:21 In the coming weeks, government will launch a project to help Maltese companies assess the environmental or social impact of business projects. This information will be publicly accessible so that private investors can invest directly in shares or bonds of companies that meet environmental, social and corporate governance criteria.

Combined with this, government will begin the process of enabling public and private entities to invest in green and environmental projects with a view to creating a surplus in carbon credits which can then be voluntarily purchased by other public or private entities with a view to meet their carbon targets.
Nicole Meilak
20:19 A monitoring board will be set up to supervise the implementation of Malta’s Carbon Development Strategy. Urban greening projects will be carried out in Żabbar, Qormi, Ħamrun and Mosta, while San Anton Gardens will be spruced up.

Vertical gardens and green roofs projects will continue in 2022, and government will study the possibility of permanent pedestrianisation in the form of a garden along Triq Sant’Anna in Floriana. A pilot project will create community gardens in different localities so that residents can grow fruit, vegetables, and flowers.
Nicole Meilak
20:15 The Planning Authority will introduce a policy on aesthetics together with measures that encourage a more comprehensive, uniform development and that better respects the urban environment of our country.

Government will be embarking on an afforestation project at Inwadar Park. This will serve as Malta’s National Park, and will be bigger than Buskett. It will cost €20 million over a five-year period.
Nicole Meilak
20:13 First-time buyers who buy these older properties in Gozo will receive a grant with a double value of € 30,000. From tomorrow 12 October, those who will buy or have already bought these properties will be given a grant on the value of VAT paid up until €54,000 on the first €300,000 in restoration and finishing costs. These properties won’t be able to be divided into several properties.

Government will also be extending again the stamp duty reduction schemes for first-time and second-time buyers.
Nicole Meilak
20:09 Capital gains taxed will be removed fon properties that were built more than twenty years ago and are vacant for more than seven years, and for properties that are in UCA and new properties that are built with a typical and traditional Maltese style and architecture. Additionally, first-time buyers of these properties will receive a €15,000 grant. Nicole Meilak
20:07 Contractors will now have to be licensed in order to operate. “This license can be a certificate of quality for those who work well and we are willing to consider incentives for them. We have many people working in construction who are professional, who want a sustainable environment and understand the need for the industry to improve its reputation,” Caruana said.

”Enforcement in this area is very important and I believe that not enough enforcement has been done in this area in recent years. This is a challenge that goes beyond one government or another. As much as there are shortcomings on this part of the room, there are shortcomings on the other side.”
Nicole Meilak
20:05 Heliport facilities in Xewkija will be modernised to improve Malta-Gozo connectivity. In 2022, government will continue working on a masterplan for the Malta Film Studios to start works on the country’s first soundstage.

On economic growth, real GDP is set to grow by 6.5%. A 2.2% increase in employment is expected for 2022, while unemployment will remain relatively low at 4%.
Nicole Meilak
20:01 Malta Enterprise will set up the Blue Med Hub to attract start-ups and small enterprises. Government will be extending the concession on the reduction of stamp duty from 5% to 1.5% when family businesses are transferred to their children or younger generations. Nicole Meilak
19:58 The e-platform for single permits will be improved and extensive work is being carried out on the e-platform for the citizenship of third-country and EU nationals. €0.5 million will be invested towards new niches, and the Seed Fund will be set up to encourage research and innovation.

Malta Enterprise will be working with the Malta Residency Agency to offer the Start-Up Residence Permit to offer a visa package for start-up entrepreneurs. The SME Tailered Facility by the Malta Development Bank will be extended to include green and sustainable projects.
Nicole Meilak
19:54 In January this year, government set up the MFSAC (Malta Financial Services Advisory Council). Next year, it will set up a long-term strategy for the sector, including the simplification of regulatory processes and the institutional architecture, the deepening of the national payment infrastructure, the consolidation of identity management, the establishment of a committee to reform the law for financial services, modernize the tax structure in Malta, and encourage talent in financial services. Nicole Meilak
19:51 In 2022, work will continue on a number of arterial and residential roads. Restoration of the remains of the aqueducts on the outskirts of Victoria will also begin. In full collaboration with the Local Councils, the main square of Munxar and Ta’ Sannat will be regenerated. Investment will be made to improve the infrastructure of the Grand Harbor Nicole Meilak
19:48 With effect from 1 June 2022, the interest rate on income tax and VAT balances will be 7.2% per annum. A €470 million investment will see industrial zones modernised, including: the Life Sciences Park; Kordin Business Incubation Centre (KBIC); Ħal Far, Bulebel, Marsa, Kordin, San Ġwann u Luqa industrial areas.

“We are also assisting aircraft maintenance companies in their infrastructural needs as well as parking in the Park 4 area of the airport in Ħal Farruġ, making it easier for employees and customers of these companies go to these facilities.”
Nicole Meilak
19:45 SEC examinations will be held in the same schools students attend, and government is vowing to better school STEM facilities and existing school infrastructure. Funds will be allocated for research and innovation programmes.

In terms of capital investment, a rental subsidy incentive will be extended to a larger number of businesses, while other incentives will be offered to attract enterprise investment through the Change to Grow and Smart & Sustainable Invesment schemes.
Nicole Meilak
19:41 The increase in cost of living will increase by €1.75 per week, and a new mechnism will be discussed for vulnerable families. Student stipends will increase by 10%, and will be given to students who work up to 25 hours per week. Investments will be made to increase the number of students finding apprenticeship placements with the private sector. Mentor programs will be available newly-graduated teachers to continue increasing the number of courses available to educators. Nicole Meilak
19:38 The tax refund cheques will increase to between €60 and €140 depending on income. Workers contracted by the public sector will be paid double for hours worked on Sundays, and the free childcare services will be extended to cater to workers with evening and weekend shifts.

Government will be discussing parental leave and minimum wage with the MCESD. An online portal will be available with employment contract templates that will stipulate the minimum contractual standards.
Nicole Meilak
19:35 Income tax for part-timers will be reduced from 15% to 10%. Changes to the in-work benefit will be as follows:

For couples where both work, the income limit will rise from € 35,000 to € 50,000 per year; For couples where one parent works, the income limit will rise from € 26,000 to € 35,000 per year; For single working parents - the income limit will rise from € 23,000 to € 35,000 per year.
Nicole Meilak
19:32 “In order to encourage pensioners to remain active and continue working after reaching retirement age, within 5 years with the next year being the first, pension income will no longer be calculated as income for tax purposes. This means that around 8,500 pensioners with other pension income will see a substantial reduction in the tax they pay while 8,200 pensioners with other pension income will no longer be taxed.” Nicole Meilak
19:31 Income tax on overtime will be reduced on the first 100 hours of overtime for those with a basic salary not exceeding €20,000. “In order to further reduce the income tax rate, next year those workers whose basic salary does not exceed € 20,000 per year and who do not have a managerial position, will start to be taxed with 15% on the first € 10,000 of overtime income. With this measure we will be giving workers € 6 million in income tax reductions. Over 30,000 workers will benefit from this measure.” Nicole Meilak
19:29 He mentions the national employment policy that was unveiled last week, and mentions that a national census will be conducted to evaluate the skills of workers in Malta. A €2 million fund will be dedicated to training programmes for workers to help upskill the workforce.

Workers with a basic wage not exceeding €20,000 and who work atypical hours in a variety of sectors will receive a €150 in-work benefit. These sectors are: accommodation and food services, administrative and support services, manufacturing, transport and storage and wholesale and retail.
Nicole Meilak
19:25 The Government will halve the tax rate on the sale or purchase of property, up to the first € 200,000, that has been leased out for not less than ten years to tenants who are eligible for the Rent Benefit at affordable rates issued by the Housing Authority.

A subsidy of up to €25,000 will be offered on properties that require structural adaptation works. Caruana also mentioned the New Hope Guarantee scheme for people with disability who struggle to secure bank loans.
Nicole Meilak
19:20 Caruana moves onto housing. In 2022, the first intergenerational housing program will start its operations. It will accommodate around 80 residents - elderly and young.

The Equity Sharing Plus scheme will be extended to people aged 30 and over to increase their access to the property market and become homeowners. The Government has entered into an agreement with the Archdiocese of Malta to be the co-founders of the Affordable Housing Foundation, which will be designing affordable housing programs and ensuring a permanent supply of adequate housing that meets different categories of income.
Nicole Meilak
19:15 A specialized CT Scan facility will be installed at the St. Vincent de Paul Long-Term Care Residence, in the Rużar Briffa Complex as part of the Day Hospital project. This project will be a continuation of the project that will be launched in September with the provision of an X-Ray machine in this same complex. These geriatric interdisciplinary services will be open to both seniors in the same residence and seniors in the community. Another measure will see the implementation of a garden for people with dementia at the St. Vincent de Paul Residence. Nicole Meilak
19:14 A “drive from wheelchair” will be purchased so that people with disabilities have access to driving instruction. Specialized training will also be provided to a number of driving instructors so that they can provide this training to people with disabilities. Nicole Meilak
19:13 Families with children undergoing occupational therapy will receive vouchers so that they can send their children to a private therapy service. Further investment will see schools construct Autism units, and Community Hubs will be built in the northern part of Malta where people with disabilities can receive specialized training on various aspects related to independent living. Nicole Meilak
19:10 Government will be removing means-testing on disability assitance as from next January. Heads of states will receive a grant averaging at €10,000 per year to ensure that children under their supervision are not short of things like food or basic resources. Nicole Meilak
19:08 “In order to help workers get a better pension when they retire, we will give them the opportunity to start paying NI on more than one part-time job up to a maximum of 40 working hours per week. Potentially around 10,000 workers will benefit from this measure.” Nicole Meilak
19:05 €11 million will be allocated to past injustices. “These will be for former dockyward workers, corps members, student workers and apprentices who joined the Government after 1979, for Gas Board workers and for Malta Electricity Board apprentices who had joined the Enemalta Corporation when it was founded in 1977. Heirs of persons eligible under the three schemes also benefit from the grants.” Nicole Meilak
19:04 “We will also increase the Carer’s Grant for severely disabled people, which we introduced for the first time in the last Budget, by €300 from €200 to a final €500.”

Full compensation will be given to people on social assistance with regards to cost of living. Those receiving the Carer at Home benefit will receive €7,000 per year, and the subsidisation rate for the Home Helper of Your Choice will be raised to €7.
Nicole Meilak
19:01 A €50 increase in the grant for the elderly living in the community or private elderly home will be given to those aged 80 and over. Government will increase the birth and adoption bonuses by €100, and children’s disability allowance will increase by €5. Nicole Meilak
18:58 The government formulary will be extended to include a variety of medicines, including oncological medicines that treat cancer, and new medicines that treat fibromyalgia. IVF patients will benefit from free medicines, and psychiatric medicines will be put on the formulary.

Free medicines will be offered to all aged 80 and above who also receive supplementary help.
Nicole Meilak
18:55 Service pensions will increase by €200. The cost of living bonus will be paid in full to all pensions who retired after 2008, meaning 43,000 pensioners will benefit from a maximum increase of €2.50 per week or €130 per year in 2022.

A €150 increase will be given in the annual bonus for people who have reached retirement age but do not qualify for a pension due to a lack of contributions. The bonus for those who paid less than five years in national insurance will receive €400 per year, and those who paid over five years NI will have their bonus increase to €500.
Nicole Meilak
18:50 In light of this, the maximum pension income will be raised to €14,318, so that these increases aren’t taxed. Pensioners who receive a widow's pension and whose income does not exceed € 10,221 will receive between €10 and €15 in weekly increases or between € 520 and € 780 per year. Nicole Meilak
18:47 Caruana now goes into detail on the budget proposals. He starts with more social measures. First off, an increase in pensions. 95,000 pensioners will benefit from an increase of €260 per year or €5 per week. From this, €1.75 is an increase derived from the COLA, and the remaining €3.25 is an additional increase. Added supplementary assistance will be offered.

Supplementary help will be given to those receiving benefits. Married people or couples whose income in 2022 does not exceed €14,318 will be receiving an increase in the benefit which varies between €3.47 and €6.50 per week depending on their income. Single people, including widows, whose income in 2022 does not exceed €10,221 will receive an increase of between €4.10 and €5.00 per week.
Nicole Meilak
18:44 “This Budget will focus on the importance of economic development through investment in the greatest resource that our country has - people. Economic development must go hand in hand with environmental development and therefore in this Budget we will also announce the largest financial package that the Government has ever had in the field of environment and sustainability.” Nicole Meilak
18:43 He reveals that this government spent €1.5 billion in the past year. “This small country, which the Opposition tells us is in the dark, was an example for countries much bigger than it, even in this field.” Nicole Meilak
18:41 Clyde Caruana has stood up to start delivering his speech. He starts with a brief acknowledgement of the pandemic.
He recalls that Malta was one of the few EU countries that successfully kept its labour market intact by increasing the number of people in employment, reducing unemployment, and reducing inactivity.
“Were we perfect? No, what Government around the world was? But in general, our country has progressed prudently. There was no limit to our health budget.”
Nicole Meilak
18:33 Good evening. We are preparing to report live on Clyde Caruana's first budget speech as finance minister. Nicole Meilak