Budget 2023’s ups and downs: Golden passport sales, alcohol and the hefty energy spend

By now we’ve all calculated how the budget delivered by Clyde Caruana on Monday has impacted our pockets and families.

The headline measures were splashed all over the news portals, making it easy for everyone to understand the more direct impact of Budget 2023.

However, we now present a more detailed view of the individual line items in the budget to understand from where government will derive its income and how it will spend the money next year.

From the obvious massive cost centres to some of the minor, more quirky ones, we present a snapshot of how public finances will shape up.

Government is expecting less excise tax from beer, wine and spirits

On the income side, it is interesting to note that government is forecasting less income from excise duty on beer, spirits and wine. On the flipside, excise duties on cement will leave public coffers €2 million richer than this year,

Government is also forecasting a drop of €9 million in income from the golden passport scheme next year.

Government is forecasting lower income from the sale of Maltese citizenship

Income tax and VAT will remain main drivers of income for the government with increases of €400 million and €100 million respectively.

But alongside these major income centres, government also derives income from swimming pool permits, car use, and the sale of graves.

The expenditure side is expectedly more varied. From the massive expense of €754 million on retirement pensions to the hefty €580 million on energy subsidies, government spending will tot up to €7.8 billion next year.

While expenditure in some areas will increase, in many aspects it will remain static, while in some areas it will be less. Cat neutering programmes will receive fewer funds next year as will a planned football ground in Msida and a water polo pitch in Marsaskala.

But subsidies for public transport and sea travel between Malta and Gozo will increase. Expenditure on Klabb 3-16 and breakfast club services in schools will remain static.

Figures show Budget 2023 estimates with change over approved estimates for 2022 indicated in brackets. ‘NC’ denotes no change from the previous year, while ‘New’ indicates the item is a new entry. Only a selection of entries was chosen for this comparative exercise.

***

INCOME

• Income tax: €2.3 billion (+€400m)
• VAT: €1.4 billion (+€100m)
• Cigarettes excise duty: €95 million (+€1m)
• Tobacco: €8.2 million (+€200,000)
• Cement excise duty: €26 million (+€2m)
• Central Bank net profit: €33 million (+€14.6m)
• Auctioning of Emission Trading Units: €40 million (+€10m)
• Money raised through local loans (government stock): €1.6 billion (+€400m)
• Gaming taxes: €77 million (+€2m)
• Annual road licence fees: €85 million (+€3 million)
• Citizenship sale (IIP): €21 million (-€9m)
• Beer excise duty: €3.3 million (-€1.5m)
• Spirits excise duty: €14 million (-€2.5m)
• Wines excise duty: €2.2 million (-€800,000)
• Petroleum excise duty: €130 million (-€25m)
• Mobile telephony excise duty: €4.5 million (-€500,000)
• Sale of graves: €150,000 (-€5.3m)
• Driving licences: €2.3 million (-€500,000)
• Car registration tax: €30 million (-€10 million)
• Swimming pools permits: €150,000 (NC)
• Interest received from loan to Greece: €270,000 (NC)

***

EXPENDITURE

Students

• Students’ maintenance grants (stipends): €33 million (+€200,000)
• Stipends to ITS: €850,000 (+€100,000)
• Gozo students studying in Malta: €1.5 million (-€100,000)
• Accomodation for Gozitan students in Malta: €200,000 (€-400,000)

Children

• Free childcare: €36 million (+€5m)
• Children’s Allowance: €49 million (+€4.5m)
• Klabb 3-16/SkolaSajf: €9 million (NC)
• Breakfast club in schools: €1.2 million (NC)

Pensions will increase by almost €63 million

Pensioners and elderly

• Residential care in private homes: €49 million (+€1.5m)
• Retirement pensions: €753.7 million (+€62.7m)
• Home for the elderly: €7.4 million (NC)

Transport subsidies

• PSO inter-island transportation: €16.8 million (+€6.8m)
• PSO public transport: €40 million (+€2m)
• Tal-Linja card: €14 million (+€5.4m)
• Operation of Gozo P&R: €350,000 (+€150,000)
• PSO maritime transportation: €400,000 (NC)

Energy subsidies

• Energy support measures: €580 million (new)
• Gas stabilisation fund: €15 million (new)
• Eco reduction: €7.9 million (+€400,000)
• Feed in tariff: €23 million (-€1m)

Car schemes

• Scrappage scheme to purchase motor cycle: €1.3 million (+€1m)
• Grant for electric vehicles: €8.7 million (+€5.2m)
• Scrappage scheme: €300,000 (-€200,000)
• Grant for wheelchair accessible vehicles: €150,000 (NC)

Artist's impression of the proposed ITS campus building at Smart City

Roads and projects (capital investment)

• ITS campus Smart City: €100,000 (New)
• Road construction/improvements: €90 million (+€15m)
• Grandmasters Palace regeneration project: €6 million (+€5m)
• Marsaskala water polo pitch: €1 million (-€500,000)
• Msida football ground: €300,000 (-€700,000)
• Shooting range: €100,000 (-€150,000)
• Upgrading of roads in industrial estates: €800,000 (-€200,000)
• Gozo airfield regeneration: €100,000 (NC)
• Upgrading Malta Film Facilities: €3 million (NC)
• Xrobb l-Għaġin megalithic temple rescue: €200,000 (NC)

Green projects (capital spending unless stated otherwise)

• Urban greening: €10 million (new)
• Maintenance Ta’ Qali National Park (recurrent): €250,000 (New)
• Ta’ Qali National Park (capital): €13 million (+€3m)
• Maintenance of public gardens (recurrent): €500,000 (-€1m)
• Inwadar National Park: €400,000 (-€2.6m)
• Regeneration of recreational areas: €250,000 (-€150,000)
• Upgrading of parks and public gardens: €800,000 (-€200,000)
• Valley management: €400,000 (-€200,000)
• Waste management: €24 million (-€9 million)
• Electric car charging pillars infrastructure: €1 million (NC)
• Management of M’skala Family Park (recurrent): €480,000 (NC)

Health

• New medicines: €14 million (+€2m)
• Remote patient monitoring: €1.8 million (+€860,000)
• POYC: €20.5 million (+€7.3m)
• Steward concession Gozo Hospital: €50.4 million (+€4.4m)
• Steward concession Karin Grech Hospital: €29.2 million (+€6.2m)
• Mental health services: €65.5 million (+€4.2m)
• Medicines and surgical materials: €150 million (NC)

UOM will have a budget of €91 million

Education

• Assistance to Mariam Albatool School: €400,000 (New)
• Space research fund (MCST): €450,000 (+€15,000)
• Educator wages and allowances: €286.9 million (+€17.6m)
• University of Malta: €91 million (+€1.7m)
• Extension school transport network: €54 million (+€15m)
• MCAST: €41.1 million (+€800,000)
• ITS: €7.5 million (+€780,000)
• LSEs in private schools: €7 million (+€2.3m)
• Church schools: €112 million (-€251,000)
• Junior College: €10.5 million (NC)
• University of Malta academic research fund: €1.2 million (NC)

Entities

• Cannabis authority: €200,000 (New)
• Wild Birds Regulation Unit: €1 million (+€150,000)
• Gozo Regional Development Authority: €720,000 (+€20,000)
• Sports Integrity Authority: €900,000 (+€300,000)
• OHSA: €1.5 million (+€100,000)
• Correctional Services Agency: €28.5 million (+€2m)
• Agency for Welfare of Asylum Seekers: €13.1 million (+€1.1m)
• Malta Film Commission: €1.6 million (+€100,000)
• Malta Tourism Authority: €119.5 million (+€11.5m)
• Malta Enterprise: €10 million (+€1.7m)
• Financial Intelligence Analysis Unit: €11.5 million (+€600,000)
• Malta Financial Services Authority: €17.5 million (-€500,000)
• Environment and Resources Authority: €14.7 million (-€500,000)
• Detention service: €10 million (-€2m)
• Water Services Corporation: €16.5 million (NC)
• Building and Construction Authority: €5 million (NC)
• Valletta Cultural Agency: €3.6 million (NC)
• EquestriMalta: €600,000 (NC)

The police force will have to contend with lower recurrent expenditure in 2023

Disciplined forces

• Civil Protection recurrent expenditure: €10.8 million (+€200,000)
• Civil Protection capital expenditure: €6 million (-€2.5m)
• AFM recurrent expenditure: €68.9 million (-€300,000)
• AFM capital expenditure: €5.5 million (-€8m)
• Police recurrent expenditure: €85.6 million (-€700,000)
• Police capital expenditure: €5 million (NC)

Special events

• EuroPride Parade 2023: €2.5 million (New)
• GSSE Games 2023: €1 million (-€223,000)

Anti-tax evasion campaigns will be boosted with an increase in funds

Education campaigns/national strategies

• National Diabetes Strategy: €4.5 million (+€4.4m)
• Anti-tax evasion awareness campaign: €100,000 (+€40,000)
• Cat neutering campaign: €50,000 (-€75,000)
• Cannabis educational reform: €400,000 (NC)
• National Dementia Strategy: €200,000 (NC)
• Strategy on Obesity: €80,000 (NC)
• Sexual Health Policy: €50,000 (NC)

Other

• Land reclamation studies: €500,000 (New)
• First-time home buyers grant: €3 million (New)
• Temporary price stabilization schemes (Agriculture Ministry): €8 million (New)
• European Peace Facility: €776,000 (+€526,000)
• Personal assistance scheme for persons with a disability: €2.1 million (+€700,000)
• Air Malta restructuring assistance: €65 million (NC)