Budget 2023: What's in it for you?

Here's our overview of the major measures announced in Clyde Caruana's Budget speech

25 October 2022, 8:24am
by Nicole Meilak

5 min read

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COLA: Increase of €9.90 per week. Pensioners however are getting a total of €12.50 a week, an additional €2.60
Public Service: All government workers will receive an additional €3.50 per week apart from the collective agreement increment to bridge the difference with the abnormally high COLA. The lowest scales (scale 17 to scale 20) of public service will also get a cash payment to benefit from the full COLA increase.
Additional COLA For Vulnerable People: 37,000 vulnerable families will receive, on average, an additional €300 before Christmas. The actual amount will be based on the family’s means and the number of children in the family unit. Government estimates this measure will reduce the poverty rate among pensioners by 1% and by 0.4% across the entire population. This benefit will be paid every year. It is revised upwards whenever inflation rate surpasses 2% and when inflation across any three of five main sectors - food, housing, utilities, household maintenance and health - tops the average of the previous five years. The measure will benefit 80,000 people and will cost the government between €10 million and €11 million in 2023.
Stipends: Stipends will increase by €50 per year, in line with a pro-rata COLA increase.
Children’s allowance: Children’s allowance will increase by €90 for every child in 2023. The measure will affect 41,100 families with around 62,000 children, and will cost €5.6 million. Government hopes to gradually increase the children’s allowance by €450 until the end of the legislature.
Pensions: Pensions will increase by €12.50 per week from January, more than double the increase last year. More than 100,000 pensioners will benefit from this increase, which comes at an additional cost to public coffers of €65 million. This means pensioners will be receiving an additional €650 next year. Vulnerable pensioners could also benefit from the additional COLA mechanism introduced in the budget that will target the poor.
Non-Taxable Threshold Increased: The non-taxable threshold for pensions will increase to €14,968, while those using a married tax rate will continue to benefit from a tax exemption on any other income up to €3,600 per year.
Widows pensions: Widows pensions will be adjusted upward once again in line with an electoral pledge to bring these pensions equivalent to that of their deceased spouses by the end of the legislature. Around 9,000 widows will experience an increase of up to €3.54 per week on average. This measure will cost €1.6 million.
Taxes: This is historically Malta’s sixth consecutive budget which includes no increase in personal income tax. VAT and excise taxes will also see no increase next year.
Carers Grant: Parents who do not work to take care of adult disabled children will start receiving €4,500 per year, up from €500. This is equivalent to half the minimum wage.
First Time Buyers Grant: One time €10,000 grant spread out over 10 years.
Housing Schemes: Extension of all first-time buyer schemes, second-time buyer schemes and schemes for Gozo properties. Extension of capital gains tax exemption and property tax on first €750,000 for UCA properties vacant for over 7 years and of over 20 years since their construction.
Higher rent subsidy capping: The subsidy capping will increase from €400 to €500 per month for one-bedroom dwellings, from €500 to €600 per month for two-bedroom dwellings, and from €600 to €700 per month for three-bedroom dwellings.
Tax refund cheques: More than 250,000 workers will benefit. This measure will cost government €26 million.
Cash Grants for SMEs: Government will spend €40 million on cash grants.
Gozo: €60 million will be spent on sustainable urban development in Gozo.
Green spaces: Government will spend €700 million over seven years. The environment ministry is drawing up plans to roll out a new agency next year.
Capital expenditure: Capital expenditure will top €920 million in 2023. A third of this expenditure will come from EU funds.
Roads: Expenditure on roads drops to €90 million from €120 million.
Energy subsidies: Energy subsidies will account for €1 out of every €10 spends in 2023, 9.3% of all recurrent expenditure. This will drop to 7.7% in 2024 and 5.5% in 2025. Energy susbidies will total €580 million.
Assistance for businesses: In 2023, Maltese businesses will be able to benefit from financial assistance of €50,000 in rental subsidy incentives, instead of €25,000 per year for the first three years of this assistance. The period in which businesses will be able to benefit from this scheme will be doubled from three to a maximum of six years.
Tax credit: A maximum €40,000 tax credit will be available for investment in digital projects, projects that reduce energy and water consumption, or in investments that increase efficiency by reducing the waste of raw materials or waste.
Digital and sustainable projects: Malta Enterprise will double financial assistance by way of cash grants for all Maltese companies investing in digital and sustainable projects, covering 50% of eligible investment, up to a maximum of €100,000.
Microinvest: Following the entry into force of the Social Enterprise Act, a number of benefits currently available only to commercial companies will be extended for social enterprises via the Microinvest scheme: a tax credit of up to €70,000 over three years.
Electric vehicles: The financial grant to incentivise the purchase of new electric vehicles will be renewed and anyone buying a new vehicle, including motorcycles, powered by electric motors will be entitled to a grant of €11,000, up to €12,000 in case the vehicle scrapping scheme is used as well. The same is true of the scheme which incentivises the purchase of mopeds, pedelecs and bicycles assisted by an electric motor.
Addressing past injustices: €8 million allocated to fix past injustices among former police offciers who had entered the public service after their retirement, and other worker categories.
Pride Parade: €2.5 million allocated for the organisation of the 2023 Euro Pride Parade.
Sport: €1 million allocated for the 2023 Small Nations Games.

Nicole Meilak is deputy online editor and IĠM press awards (Most Promising Journalist) wi...