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Budget 2024: No major shakes in budget targeting inflation
Read the MaltaToday liveblog to experience the Budget day as it happened
30 October 2023, 9:06am
Karl Azzopardi / Nicole Meilak
Karl Azzopardi / Nicole Meilak
1 min read
Finance Minister Clyde Caruana (Photo: James Bianchi/MaltaToday)
Few new measures were introduced in Malta’s budget for 2024, which was instead dominated by energy subsidies and increases in several social welfare measures.
The budget saw increases in pensions and other existing welfare benefits, in line with cost-of-living adjustments, and a hefty increase in the children’s allowance.
In a budget in which €350 million are earmarked for energy, fuel and wheat subsidies, finance minister Clyde Caruana had no more room for new measures or tax cuts that would benefit middle-income earners.
Last week, Caruana said the budget will still be an expansionary one despite the fact that inflation far beyond 2% is here to stay.
He has also warned the €350 million in subsidies that are to be spent throughout the next year should not be taken for granted. Without these subsidies, he stated, the subject of every public discussion would be on the economy.
The theme for Budget 2024
On Sunday, Prime Minister Robert Abela said 95,000 families will benefit from an additional COLA payment next year.
It was also revealed earlier this month that wages are set to rise by almost €13 per week in January on the back of persistently higher inflation despite government’s hefty subsidies on fuel and energy.
The theme for this year's budget is: A Just Malta. In a short comment announcing the theme, Prime Minister Robert Abela said it reflects the government's belief in a just country. "Over the past few weeks we have met people, listened to them and tonight we will deliver a budget for the people."
Follow the MaltaToday liveblog for updates throughout the day.
Karl Azzopardi is Online Editor and an IGM press awards (Human Stories) winner of 2019
Nicole Meilak is deputy online editor and IĠM press awards (Most Promising Journalist) wi...
And Budget day is over
Abela finished his press conference, and that marks the end to Budget day commitments. Thank you for following the day with us. We will have a full report on the government’s press conference up shortly on our portal. In the meantime, you can read the rest of our coverage on our homepage (there’s plenty to read…)Is this a just Malta?
Abela believes it is. He says the Budget will leave more money in people’s pockets, even if the COLA is taxed. “An unprecedented increase in the children’s allowance. The widening of the in-work benefit. The minimum wage increase in and of itself,” he says, listing some of the key measures from the Budget 2024.Protecting the national interest
Abela briefly touches on migration, insisting that Malta cannot take more irregular migrants nor take on disproportionate measures. “A substantial numbers of EU leaders are talking about migration in the same way, even if they were signing a different tune a few years back.”Steward’s €100 million buy-out clause
Abela is asked whether the government will keep aside €100 million just in case Steward chases the government for its buy-out, something which had been negotiated with Steward when former minister Konrad Mizzi was still in cabinet. Abela says the government will fight strongly against Steward getting this €100 million sum, noting arbitration proceedings happening in front of the ICC.Rosianne Cutajar back in the Labour Party?
Not quite. Abela was asked whether former Labour MP Rosianne Cutajar’s presence at the Labour Party conference this year is a sign that she could be welcomed back into the party. Abela clarified that all former MPs were invited to the conference, and that the party’s actions against Cutajar in the past raised the bar for the party in terms of good governance.From Valletta to Gaza
Now, Abela is asked whether the Maltese government considers Hamas a terrorist organisation. He says that Hamas is different to the Palestinian people, and noted how Malta is calling for a ceasefire in international for a. “I appeal for peace. I don’t agree with humanitarian pauses but a singular pause.”Food importers ‘profiteering’
Abela also addresses a question on food importers. Here, Abela says that it seems a small number of importers are reporting excessive profits, possibly engaging in profiteering. He says the government supported these importers during the pandemic, and expects these companies to act in good faith.No divergence from Steward Healthcare spending
MaltaToday journalist Matthew Farrugia asks Abela about the €75 million budgeted for the operations of Gozo General Hospital and Karin Grech Hospital. He insists that the government is paying the same amount that it used to pay Steward Healthcare to operate the two hospitals. “Our position is clear. Between what we were paying Steward to operate the hospitals, and what we’re spending to operate it ourselves, there’s no divergence.”PM: A surreal Budget
Now fielding questions from journalists, the Prime Minister says it’s a surreal Budget, which comes after a pandemic, a war in Ukraine, an energy crisis, and now a conflict in the Middle East. “We took a decision in 2022 and we’ll remain consistent,” he says, referring to energy subsidies implemented after the war in Ukraine broke out. He insists that this subsidy will help businesses by keeping the economy stable.Finance Minister: Labour government keeps everyone afloat
Clyde Caruana is referring to comments about his Budget preamble when he referred to the 2010 Budget. “We get criticised by some for saying one thing or another. But in a time of need, this government, year after year, has spent millions to keep everyone afloat.”Deputy PM: A pro-active Budget
Deputy prime minister Chris Fearne says it’s a pro-active Budget that reaches the lower and middle classes and ensures a higher quality of life for the coming year.PM: Another Budget without new taxes
Prime Minister Robert Abela notes that this is another Budget without any tax increases. “We doubled the number of families that will benefit from the additional COLA,” he says, with 95,000 families expected to benefit.For now, Abela is just giving another run-down of the Budget measures.
Prime Minister gives press conference at Castille
The Prime Minister is giving a press conference in the courtyard of Castille. We will post updates here.Grech gives post-Budget statement
Opposition leader Bernard Grech has just given a statement to the press, saying the Budget offers no solutions. “People are feeling the burden of over population, and Abela’s government has insisted on the same economic model of low earners and cheap labour,” he said.Budget speech over
And that’s it. Caruana has finished delivering his Budget speech. But the day doesn’t end here. Later, the Prime Minister will deliver a press conference at Castille. The Nationalist Party will also start its press conference any moment now. We will cover both on our news portal and in this live blog. Stay tuned.Caruana wraps up
Caruana is wrapping up his Budget speech, making several digs at the Opposition. “Prudence made all this possible. Not every government acted this way,” he said, to cheers and jeers from the two sides of the Chamber.”This country needs to move towards quality, not quantity. We need to focus on the value of our work, not how hard we work. Only then can we guarantee our future.”
Culture and Sport
Caruana says nothing new in this area. VAT reductions and favourable tax rates on sporting activities and professional athletes will be retained, and more athletes will be eligible for the 7.5% tax rate. On culture projects, Caruana lists a number of restoration works happening across the islands, including the Grand Master’s Palace and Manoel Theatre.JP Fabri: Energy key for long-term sustainability
We’re again touching base with our resident economist. JP Fabri points out that energy will be central to the long-term sustainability of the local economy. “Various investments are taking place towards the diversification of Malta's energy supply. The green transition is happening through various investments in infrastructural projects including the second interconnection, battery storage projects and the launch of a hydrogen strategy. The additional incentives and schemes for households and companies to champion the green transition are welcome and critical for this transition to happen.”Regulating recruitment agencies
Caruana says outsourcing and temping agencies will be regulated, and unlicenced entities will no longer be able to bring workers to Malta. He also said the government is looking into changing work permit application fees by making it more expensive to get a new permit.Domestic violence
The government is planning to introduce ‘panic alarms’ for domestic violence victims. These alarms will allow victims to connect directly with law enforcement and get the help they need as soon as possible.Security measures
A new unit, called Roads Policing, will be set up within the police force. It will be empowered to reopen roads after accidents to help reduce traffic jams. Meanwhile, LESA will invest in CCTV connected to a central control room to deter crime in key areas. The first projects will be implemented in St Julian’s, St Paul’s Bay, Marsa and Paola.Environment measures
Caruana says the government is looking to revise aesthetics policies, while the Strategic Plan for the Environment and Development (SPED) should be finalised next year and put up for public consultation. Property restoration schemes will continue as is, and the capital gains and stamp duty exemptions will also remain in place.Sector diversification
Speaking again with our resident economists. Stephanie Fabri notes that there seems to be an effort to diversity the maritime and aircraft sectors. “On the maritime front, infrastructural projects will further support the successful cluster supported by new strategies for super yachts as well as a longer-term strategy. On the aircraft side, the asset registration sector will be supported through aircraft leasing frameworks as well as other infrastructural projects. These measures are most welcome.”JP Fabri adds that the primary sector is important for Malta’s food sovereignty, and can also add value to the economy. “Although various measures have been launched, we believe that a key sectoral transformation vision and strategy is needed to support the establishment of producer organisations, the development of value-adding processes and the valorisation of local produce. The experience of the local aquaculture industry should be taken as a case-study.”
E-scooter incentives
Financial incentives will be available to help people by their own e-kick scooters. Meanwhile, the government will revise its Transport Masterplan and is finalising a separate plan so that certain services will not be provided before 9am, to avoid rush hour traffic. The government is also committing itself to carry out studies on new parking zones by adopting public-private partnerships. It is also in talks to develop a park-and-ride facility for University students.Project Green
Caruana says around 80,000sqm of land will be regenerated into green spaces, with over 5,000 trees set to be planted, as part of plans by Project Green to introduce more green spaces across Malta.Renewable energy measures will remain in force
A variety of schemes will remain in place to help households move towards renewable energy sources. These include schemes for solar panels, heat pump water heaters, and solar water heaters.A new agency for aquaculture
Caruana says the government will set up an agency responsible for the research, development, and implementation of aquaculture and fishing projects. Malta will also have its first ‘Product Designated of Origin’ next year.Apart from this, the government will continue to explore land reclamation, as it has done in previous years, while studies for the Gozo airfield project are in their final stage.
Stephanie Fabri: Sectoral transformation critical
Let’s check in with our resident economists for a minute. Stephanie Fabri notes that sectoral transformation will be critical for Malta’s long-term economic competitiveness and attractiveness. “The financial services strategy that was launched earlier this year is being implemented to ensure the attractiveness of such an important economic sector. We would have liked to see this initiative being rolled out across other economic clusters. Further diversifying current economic sectors should be a priority at this juncture.”Meanwhile, JP Fabri points out that there is no focus on developing the tourism sector with a focus on quality. “The debate on quantity versus quality has been long-standing but yet again remains elusive. Malta's competitiveness depends on connectivity and the investment in the new national carrier is critical. However, tourism is much more than accessibility and connectivity. We need to see more support measures to support tourism operators as well as a push towards developing sub-niches in the tourism segment.”
Infrastructure woes
Caruana doesn’t say much on road infrastructure, apart from listing existing projects like the Luqa Junction Project and Airport Intersection Project. On water infrastructure and management, Caruana says the end goal is to increase water production by over 50% of the 2020 median. Not much is said on waste management, as Caruana mentions the ECOHIVE project in passing.JP Fabri: Malta lagging behind uptake of direct EU funds
JP Fabri says the EU-funded research project on conductors is a welcome measure, but it needs to be replicated in other sectors. “Malta has not benefitted from direct EU funding at the rates that our European peers have. These grants are untapped and can support capital-intensive investments to support research, innovation, and advanced manufacturing amongst other things. The Government needs to focus on supporting companies and organisations to find consortium partners to participate in such funding calls as we are lagging behind on the uptake of such funds.”Energy infrastructure
The government is aiming to have the pre-qualification questionnaire for offshore renewables projects published within the first few months of next year. He mentions the second interconnector but doesn’t say when it is scheduled to be up and running. On Enemalta, Caruana says investment will double in 2024, but doesn’t give a specific amount.EU funding
SMEs will be able to tap into EU-funded schemes, particularly Business Enhance and Invest EU. These funds will offer €40 million and €16.5 million respectively. Meanwhile, Gozo will receive €58 million in EU funding, with a focus on urban development.Stephanie Fabri: The concept of conditionality
Speaking on the government’s business incentives for 2024, Stephanie Fabri says the focus is on the old, rather than the new. “Various business incentive schemes are to be continued with a focus on start-ups. The focus here is on continuation rather than new schemes or support measures. The venture capital fund is a much needed investment. One would have wished for a more ambitious support programme for investment by companies with a focus on productivity enhancing investments. The concept of conditionality needs to be further entrenched in our mindset to facilitate a smart, digital and green transition.”JP Fabri: More focus needed on health prevention
On the government’s health investments, JP Fabri says more is needed for prevention. “Whereas the focus is on health care and the investment in health infrastructure is always welcome, we believe that there needs to be a much bigger focus on prevention rather than just care. It is only through such investment in health prevention and the concept of wellness that we can achieve a more sustainable health system.”Air Malta
Caruana says the government will invest an initial €215 million capitalisation in the new national airline that will replace Air Malta. “Our national airline is a crucial part of the infrastructure of our islands and the air connectivity it provides is inextricably linked to the economic growth and success of our country.”Corporate tax unchanged for 2024
Malta will not implement an EU directive to set a minimum 15% rate, and will instead postpone this for up to six years. MaltaToday already reported on this move last week.A ‘centre of competence’ for semiconductors
Caruana says the microchips sector employs 1,800 people, generating over €600 million in exports. In light of this, Malta Enterprise will work to host a ‘centre of competence’ for semi-conductors to train future workers in this sector.Helping businesses file their tax returns
In a vague promise, Caruana says the obligations on small businesses to submit audited financial statements will be alleviated. Meanwhile, a number of schemes will be extended, including the Skills Development Scheme, the Rent Subsidy Scheme, and more.Stephanie Fabri: Innovation critical for Malta’s economy
More measures will be needed in the innovation sphere to keep Malta competitive, according to Stephanie Fabri. “Innovation is going to be critical for Malta’s economy to remain competitive and attractive in the future. Malta needs to further strengthen its innovation ecosystem at all levels especially business investment in research and development. Although a national strategy is going to be launched, we would like to see more investment flowing into this sector. Focus needs to be on building the ecosystem in a holistic manner.”New medicines on the formulary
The government formulary will be expanded next year to include IVF medicines and other medicines for patients with asthma, pulmonary fibrosis, and mental health conditions. Meanwhile, health clinics in Mosta, Floriana and Bormla will be refurbished.Bernard Grech: A Budget without solutions
Meanwhile, Opposition leader Bernard Grech points out that this year’s Budget has so far given no solutions to some of the biggest problems facing Malta today. “It failed to address inflation, traffic problems, rubbish and neglect, over-population & the endemic corruption. No ideas. No vision. No direction.”Hospitals investment
The Budget makes little reference to the hospitals privatisation deal that was annulled earlier this year. The government will invest €75 million in the Gozo General Hospital and Karin Grech Hospital, but that’s it.JP Fabri: Ambitious measures needed on labour market skills
The labour market measures are leaving more to be desired. JP Fabri, our resident economist, says: “Malta's performance in the labour market has outperformed our European peers. The roll-out of the National Employment Policy is a welcome step as the challenges of the labour market are structural in nature. Focus needs to be more on skill acquisition. More ambitious measures would have been welcome with respect to addressing these challenges.”Stipend increase
Students rejoice! Stipends will increase by €64 in 2024. Students enrolled in certain courses will enjoy higher stipends, although this was already announced a few weeks ago.Working pensioners and in-work benefit
Working pensioners will not be taxed on 60% of their working income, a measure which will cost the government €27 million. Regarding the in-work benefit, this will increase by €50 for every child in the family under the age of 23. Workers with atypical hours will also receive a €150 cheque, as was the case since the Budget 2022.Tax refund cheques are back
You can expect your tax refund cheque in the mail next year, ranging from €60 to €140 depending on your income. Over 250,000 people will receive this cheque, and it will cost government coffers €26 million.Stephanie Fabri: Housing incentives will support the construction sector
Stephanie Fabri on the housing proposals: “Over the past few years, the construction sector has been a significant contributor to Malta's economic performance. The continuation of the first-time buyer scheme and incentives to support affordable housing will surely continue supporting the sector. The continuation of such schemes and tax measures are to be continued. There is a greater push towards regeneration of buildings in Gozo.”First-time buyers get an increase, but only in Gozo
People buying their first UCA or vacant property in Gozo will benefit from an additional €10,000 in their first-time buyers’ grant. Other than this, the first-time buyers scheme will continue as is, while first- and second-time property buyers will enjoy lower duty rates.JP Fabri: Malta’s social fabric a key pillar to national resilience
JP Fabri notes that the measures seen so far serve to strengthen the social elements of the budget. “Malta's social fabric remains a key pillar of our national resilience. Incentives to support NGOs, investment in social housing and measures to fight poverty and inequality are always welcome. It is critical to support such individuals and families and to direct them towards labour market participation. Various targeted incentives and support measures have been designed to support families of disabled people, vulnerable families at risk of poverty.”Private Rent Housing Benefit Scheme>
Caruana is pledging an increase to the Private Rent Housing Benefit Scheme. The maximum that can be given under this scheme will increase from €3,600 to €4,200 for a single person, while for a family with one child it will increase from €4,800 to €5,400. For a family with two or more children, the maximum will increase from €5,000 to €6,000. The minimum will also rise to no less than €125 a month.Carers grant increase
Parents who leave work to look after their child with a disability will receive an additional €487 a year, up to almost €5,000. The Severe Disability Assistance scheme will increase by €12.81 a week, while the standard disability benefit will increase by €8.54 per week.Higher unemployment benefits
There will also be changes to the unemployment benefits. The benefit rate during the first six weeks without work will start at 60% of that person’s last salary. The rate will drop to 55% for 10 weeks, and after that point, it will drop to 50%. It will be capped at 175% of the minimum wage.Stephanie Fabri: Purchasing power a key feature in Budget 2024
Stephanie Fabri, also our resident economist, points out that there are many measures in this budget that focus on purchasing power and domestic demand. “The vulnerable strata have been hit by inflationary pressures, primarily from rising food price. A number of measures have been tailored to support the purchasing power of this group including pensioners. What is noteworthy is the additional support that will be given to pensioners to continue working as it also supports the labour market. The additional COLA mechanism will support further the low-income groups. Supporting purchasing power and domestic demand seems to be a key feature of this social budget.”€250 increase in children’s allowance
Families will receive an additional €250 as part of their children’s allowance for every child in the household. “This is the largest increase ever given in the 50 years that this benefit has existed, and it will affect 41,000 families with 62,000 boys and girls,” Caruana says as the Chamber cheers. The government will spend €15.5 million on this budgetary measure in 2024.Additional COLA mechanism
95,000 people will be eligible for the additional COLA next year. Those who are eligible will receive two payments: one in December this year, and one in May next year. The help will range between €100 and €1,500 depending on household income and size.Pre-1962 pension anomaly will be arranged
As from next year, pensioners born before 1962 will benefit from the same pension mechanism that currently applies to those born on or after 1962. This was an anomaly that goes back to 2006, when the government of the time introduced a mechanism for those born after 1962, whereby their pension increase is calculated depending on increases in wages and inflation. For those born before 1962, their pension increases were calculated solely by the cost of living.Pension increase
Pensions will increase by €780, or €15 a week, in 2024. This will apply to all pensioners, in what Caruana is dubbing as “the largest increase for pensioners in a single year”, as the other MPs cheer him on.JP Fabri: Energy subsidies cushioned the economy
A comment from our resident economist: “The energy subsidies have no doubt cushioned the economy from the wide fluctuations seen in other European countries. Such subsidies have provided an extra buffer of resilience and competitiveness to Maltese industry. Going forward, as these subsidies will need to be tapered off, it is critical to look at the element of conditionality so that such subsidies will also facilitate a green transition towards the uptake of renewable energy. The ability of Government to sustain such subsidies confirms the need of fiscal discipline and sustainability so that the fiscal buffers can be rebuilt and used again when the economy will need further stabilisation mechanisms.”How’s the economy doing?
In real terms, the economy is set to grow by 4.2% next year, with domestic demand being the main driver of this growth, contributing 3.6%. Meanwhile, the government deficit will fall to 4.5% in 2024, and continue to fall by 0.5 percentage points until at least 2026. Employment will increase by 4.4%, with unemployment remaining at a low 2.7%. Inflation will fall to 3.7% as food and service prices are expected to reach a more moderate rate.€350 million in subsidies next year
The government will spend €350 million in subsidies next year, of which €320 million will be going to energy subsidies alone. The remaining amount includes wheat subsidies. Caruana’s defending the subsidies heavily, saying if Malta had done otherwise, introducing measures like those in Greece or Germany, they would have broken business and the middle class.Debt burden at 55% of GDP
Caruana says that Malta’s debt will sit at 55% of its GDP, comparing it to the debt levels of 2010 when the ratio was 13 percentage points higher. “This is the difference between the politics and fiscal competence that distinguish the two sides in this Chamber,” he says.Energy subsidies will remain in place
Caruana says that the government will not do as previous governments – a dig at the Nationalist Party in 2010 – and increase any utility tariffs. The energy subsidies will remain in place, and the government will carry the burden instead.Caruana promises investment across the board
Caruana likens Malta to Germany, and how the economic powerhouse is being forced to lower investment in health, education, and social welfare. “But Malta, the smallest country, will invest more in health, education and social welfare!”The Budget begins
Parliament is now in session. The Finance Minister is delivering his Budget speech.MPs convene in Parliament
MPs are gathering inside the Parliament Chamber in Valletta to hear the Finance Minister’s fiscal plans for 2024. Caruana is expected to give his speech in 10 minutes. We’ll keep you updated all the way.A social budget at heart
JP Fabri, one of our resident economists who will be commenting on the Budget over the next hours, says its evident that this budget is going to be “a social one at heart”.”This is good to cushion and stabilise the economy and society from external shocks however we hope to find growth and productivity enhancing measures that will focus on the longer term of the economy.”
What do social partners feel should be done on the energy sector?
While social partners seem to have mixed opinions when it comes to energy subsidies, there is consensus regarding the need to upgrade the energy distribution system.The Malta Chamber proposed that government should, “gradually reduce energy subsidies giving a 6-month advance notice for each reduction.”
Meanwhile, the UHM stated that government should guarantee that fuel and energy prices do not shoot up, but made no reference to the subsidies themselves. Likewise, the General Workers’ Union proposed that, “priority should remain keeping energy prices for consumers including businesses, stable.”
The Chamber of SMEs urged government to upgrade the energy network, creating, “alternative distribution paths, new substations, and redundancy measures.”
"In order to achieve a better quality of life, pay more attention to their health, and truly improve our country's population, it is crucial that our infrastructure remains secure. This is what people are feeling and what needs to be addressed immediately," he says.
He also mentions the hospitals scandal, saying government should be doing its utmost to get back the €400,000 back.
"If this is not done today, if the economic model is not changed, if the high cost of living is not addressed seriously, if it doesn't tell us how it will recover the 400,000,000, then tonight's budget will be irrelevant,” he says.
What do social partners feel should be done to safeguard Gozo?
The Gozo Business Chamber (GBC) and the Gozo Tourism Association (GTA) have both presented a number of proposals which set out to safeguard what makes Gozo unique and different from Malta. These include the removal of blanket incentives aimed at the property market, which are agreed upon as being significantly responsible for heavy increases in property purchases in Gozo.On connectivity, the GTA proposed the betterment of the fast ferry service, along with the construction of a fourth ferry to replace the Nikolaus ferry. Meanwhile, the GBC proposed the creation of a scheme which would assist the retail and import sector to cover added transportations costs.
Meanwhile on infrastructure, the GBC proposes the implementation of the ecological green park in Victoria project, as well as the building of a new Gozitan hospital, the latter being caught up in delays related to the Stewards/Vitals scandal.
From their end, the GTA urged government to rebuild “the Marsalforn Road which incorporates part of the Victoria ring road which will eventually ease traffic flow through the capital’s core
Tax-free COLA?
A number of social partners have been calling for the yearly COLA mechanism to be exempt from tax.Among them, the Malta Chamber has proposed that either government does not tax COLA, or revises the tax brackets so that employees’ COLA income does not get caught up in higher tax brackets.
Likewise, MEA boss, Joe Farrugia had also called for COLA to be tax exempt starting from 2024, even discussing the matter during an interview with MaltaToday.
The Chamber of SMEs have also acknowledged that the current tax brackets have not been sensitive to Malta’s inflation and resulting COLA adjustments. Instead, the lobby called for non-taxable income to rise to €14,000 in order to aid low-income workers especially.
Labour Force
There has been consensus among social partners regarding the need for immediate action in order to address labour force issues for the past few years.In order to address this, the Malta Employers’ Association (MEA) has a number of incentives to retain quality workers who are close to retiring or have already retired. For instance, the MEA has proposed that people who choose to work beyond the retirement age should have their pensions exempt from tax.
Meanwhile, the Malta Chamber has proposed different measures, with one proposal targeting Maltese workers who live abroad. The Malta Chamber proposed tax exemptions for the first five years of employment to entice highly qualified Maltese people who are working and residing overseas to return to Malta.
In order to address the long-term labour shortage situation, MEA has also proposed the establishment of a task force that looks into the population situation. This, MEA stated, is crucial in light of infrastructural strains Malta is already experiencing.
Budget Day Timeline
2pm: Finance Minister Clyde Caruana holds press briefing with media4:30pm - The Minister leaves the Ministry and walks to the Grand Masters Palace
5:30pm – The Minister leaves the Grand Masters Palace and walks to Parliament
6:30pm – The Minister starts his speech in parliament
Executive Editor Kurt Sansone
“The theme for Budget 2024, A Just Malta, seems to suggest an emphasis on lifting up those who have low incomes as they struggle with inflation. The Prime Minister on Sunday went as far as saying the budget will be ‘socialist’.It is good that the budget, at least from what is publicly known, will serve to give those on the lowest rungs of income a boost. They have struggled as a result of rising prices. But in doing so the government must not forget the middle class. The middle class represents that large swathe of individuals and families, who earn a relatively decent wage, are not dependent on welfare and whose spending power helps drive the economy. Inflation has eaten hard into the middle class’s spending power and this must not be overlooked. I expect the Finance Minister to address this by cutting personal tax.
The minister should widen the tax brackets and add a new tax band at 20% to create a distinction in the mass of earners that currently pay a top rate of 25%. The middle class is labouring hard to maintain the standard of living it achieved over the past decade, partly as a result of the Labour government’s policies to incentivise work. It should not be abandoned.
Furthermore, I expect the Finance Minister tonight to lay down plans that address the failures from the annulled hospitals deal by presenting a financial programme with investment in: a new hospital in Gozo, refurbishment of the Karin Grech rehab hospital, the construction of a new mental health facility, the promised outpatient block at Mater Dei Hospital and other regional healthcare facilities.”
Deputy Online Editor Nicole Meilak
Budget day comes on the eve of Halloween this year, but Clyde Caruana is going to be extra careful not to spook the economy as he lays out the financial estimates for the coming year.He has already hinted at a budget of ‘prioritisation’, but what will he be prioritising this time round? No doubt, the fuel subsidies will remain high on the priority list as Caruana tries to tackle inflation at source.
Caruana might also want to address labour market and productivity woes, but it’s a tricky balancing act - if he closes the tap on foreign labour, he risks making the worker shortage much worse.
Senior journalist James Debono
One topic overlooked in most budgets is the protection of national resources. The imposition of tariffs on ground water used in commercial non-agricultural activities could be used to finance the installation of home-based reverse osmosis systems in every household. This would also help reduce plastic waste providing everyone with an alternative for plastic bottles.The budget should include two long-term strategies bolstered by fiscal measures: one for transitioning away from over dependency on the construction industry, and one for transitioning from car centred urban planning.
A mobility app, rewarding sustainable transport choices, like taking a bus instead of riding a car should be introduced. Fuel subsidy on cars should be phased out, with money saved ring fenced in the public transport expenditure.
European Parliament President and Nationalist MEP Roberta Metsola
“Our country needs a complete transformation, and one change will not address our populations concerns.Our businesses, our students, our pensioners are yearning for a real, tangible shift in mentality, having a government that incentivises quality over quantity, meritocracy over mediocrity, long term planning over plastering open wounds.
The annual budget speech should provide the country direction, outlining the Government’s priorities for the coming years in various sectors which include the environment, social, economic, governance and financial. Our country’s budget speech, followed by a smooth implementation process built on consensus, should send a signal that we want to attract more local and foreign direct investment by having the necessary infrastructure. We should be ahead of the curve when it comes to AI, and this entails further investment in training tomorrow’s workforce to have the necessary skills. We need clear objectives and performance indicators.
Businesses will only invest in the green transition with a clear business case and incentives. We have to do better with easier access to existing EU funding, and less red tape.
Our country, this generation, are longing for a vision and not short-term initiatives and knee-jerk reactions. We owe it as well to the next generation. We deserve better, they deserve better.”
Nationalist MEP David Casa
“Without a doubt, the key issue for this budget is the government’s ability to tackle the cost-of-living crisis and persistent inflation in Malta. It is about time. Families and small businesses have been suffering and poverty is increasing in an economic climate of more income inequality and high debt. We have seen no strategic plan on lowering inflation or any evidence that our taxes are being invested for the long term.We have a government of red carpets and yachts, that refuses to be held accountable for the losses of hundreds of millions in taxpayer money because of its corruption, and that is insisting on addressing problems with more problems.
The Maltese cannot afford a government that refuses to listen to its democratic opposition, and the PN has time and time again proposed good solutions that will lead to a better life in our country. It will continue to do so even in this budget.”
Labour MEP Alex Agius Saliba
I believe that we need another strong social budget to address the needs of those who are the most vulnerable within our society.For me the biggest challenge that we have to address in this budget is that of focusing on social measures to help out the most vulnerable and young couples when it comes to housing, we need to build on positive measures that we introduced in previous budgets to be able to help out and make it affordable for everyone to buy or rent.
We also need to work with social partners to increase the minimum wage and continue our fight in attacking precarious employment.
Apart from that we should continue with the positive trend in previous budgets to increase pensions.
I believe that in the socio-economic situation that we are in today we continue to focus on strengthening our social expenditure to fight poverty and social exclusion. This is the biggest challenge that we are facing today with the increase in inflationary costs of the most essential items such as medicine, food products and housing.
Gozo Business Chamber – CEO Daniel Borg
“On a national level we expect measures to continue to increase the efficiency and continued development of our businesses, and to continue to address issues related to Malta’s infrastructure and overall sustainability, especially in the areas of mobility and green spaces.On a regional level nonetheless, we expect a significant and concrete push targeted towards the diversification of the Gozitan economy, which cannot remain reliant solely on sectors such as tourism, construction and real estate. We also expect a commitment on the development of important infrastructure such as the new hospital for Gozo and the Victoria Urban Regeneration project.
We also want to see the alignment of incentives in the property sector in line with Gozo’s socio-economic and environmental needs, in order to see the restoration of existing traditional buildings and the development of high-end and quality properties, and not the proliferation of unassuming apartment blocks which are presently obliterating our communities. We believe that Gozo as a region has a lot to offer on every level.
To this end, a strong commitment on the mobility aspect between the two islands should remain, taking into account the social aspect that such a service should address. This means ensuring that the current ferry service and fast ferry service continue to operate at a level that are satisfactory to the exigencies of the Gozitan community. To this end a long-term strategic approach should be adopted both for the Gozo ferry and the fast ferries, including in these considerations both the port and the road infrastructure at both ends, and the public services obligations which are currently or will be regulating these services.
We also want to see the commitment on making Gozo carbon neutral in the coming years to continue. Nonetheless this requires a strong investment on renewable energies, and a long-term vision on our current infrastructure including the electricity grid in Gozo. The community and the economy should go in hand in hand. To this end the commitment to ensure the State continues to address the changes in Gozitan ‘s society including the inclusion of migrants within our communities, should remain.”
Moviment Graffitti – Andre Callus
Malta needs to urgently address the growing levels of social inequality, workers’ exploitation and environmental degradation. An economy geared toward unbridled growth, instead of social justice, has led to the proliferation of injustices on both the social and environmental levels.To change this direction, we will need a different economic model that is built around the common good rather than the maximization of private profits. This necessarily entails having a stronger economy through less growth - since current growth levels are problematic and unsustainable - and a more equitable distribution of wealth.
To start achieving this we’ll need 1. an increase in low wages via a significant increase in the minimum wage – this will push all low wages upwards and start addressing the devaluation of wages due to inflation; 2. higher taxes on very high income, corporate profits and lavish wealth; 3. a crackdown on workers’ exploitation, including addressing the exploitative gig economy and a review of migration policies that are leading to marginalisation and precarity, and; 5. reining in the construction and property market to move towards more affordable housing and a better quality of life.
Malta Chamber – CEO Marthese Portelli
“The 2024 Budget must confront the looming threat of domestic inflation, which stems, among other factors, from wages rising faster than productivity. This poses a significant risk to our competitiveness and long-term prosperity. It must also focus on boosting the purchasing power of lower-income groups, with expectations of zero tax on COLA and adjustments to tax brackets to support those with lower incomes.Additionally, this budget should prioritize increasing productivity by incentivizing further digitalization and investments in systems that enhance efficiency. It should also address human capital issues, emphasizing productivity growth over input expansion. Encouraging skilled Maltese expatriates to return to the private sector, along with tax-based incentives and reevaluating retirement options, is crucial. Implementing on-the-job, offsite, and online training programs will help upskill the workforce. Better regulation of the market for third country nationals is expected, along with streamlined administrative processes and a focus on attracting highly skilled individuals to fill critical skill gaps.
The 2024 Budget should allocate sufficient funds to invest in utility, digital, and mobility infrastructure. Modernizing and strengthening our infrastructure is essential for sustained economic growth, environmental and climate goals, and a more quality-driven economy. It's also vital to reduce bureaucracy in the public sector to enable smoother operations and timely enforcement.
Lastly, the 2024 budget needs to enact several overdue reforms. Public procurement reform should ensure a level playing field and prevent taxpayer money from being wasted on subpar projects. Establishing specialized commercial courts and addressing court delays is necessary for a fair and efficient legal system. Customs reform can enhance operational efficiency and combat illicit imports, particularly from Sicily. Planning reform should strike a balance between development and preserving cultural heritage and the environment.”
MDA - President Michael Stivala
“As an association representing property in Malta, our interests in the yearly government budget would likely focus on measures that support the property market's growth, sustainability, and stability.Here are some key areas you we wish to see addressed in the budget:
1) Investment in Infrastructure: Improved roads, public transport, utilities, and digital infrastructure can increase property values and make areas more attractive for living and investment.
2) Environmental Sustainability Initiatives: Incentives for green building practices and retrofitting existing properties to be more energy-efficient. This could include tax credits or subsidies for solar panels, insulation, and other energy-saving measures.
3) Regulation: Adequate funding for regulatory bodies to ensure more efficiency and less excessive bureaucracy . This is essential for maintaining high standards in the property market and affordability.
MEIA – President Howard Keith Debono
“The Malta Arts Association (MEIA) has taken a proactive stance in shaping the proposed government budget for the upcoming year. In its submission to the Finance Ministry, MEIA has underscored several key priorities aimed at nurturing a more sustainable creative economy.MEIA's recommendations highlight the imperative to reduce expenditure on vanity projects and redirect resources towards initiatives that promote equitable funding and benefit the local arts scene and its sustainable development. Additionally, MEIA has proposed the establishment of a new private-public entity dedicated to recognising, promoting, and disbursing funding for incentives designed to reduce reliance on public funds, thus fostering a self-sustaining creative sector.
Furthermore, MEIA has emphasised the urgency of addressing long standing issues and unfulfilled promises regarding investments in rehearsal spaces. The association has also highlighted the need for swift implementation of the tax incentive which was to be implemented in 2022.
MEIA maintains its commitment to collaborative efforts with the government and stakeholders to ensure that the proposed budget aligns harmoniously with the current growing needs of the arts and entertainment sectors.”
MUMN – President Paul Pace
“The budget has always to address the issues which are hurting the public. Without any doubt, the cost of living or the increase of all essential amenities is hurting the public.Although the Government already mentioned that the subsidiaries such as fuel and electricity are to remain, more incentives need to be brought forward in this budget. The minimum wage must increase and also COLA should be tax free since the risk of poverty is on the increase.
Also, as FORUM, we expect that the government will launch the long-awaited projects on the Health sector, such as more proper wards in Mater Dei Hospital and the refurbishment of Carmel Hospital. But also, the Government needs to invest in infrastructure such as electricity due to the population boom.”
SME Chamber – CEO Abigail Agius Mamo
“The SME Chamber is aware that Malta is not going through easy times and that the subsidies are taking a toll on Public Finances. A measure that can only boost public finance and help businesses greatly is a reform in the Public Procurement system.A fair and transparent public procurement is something that is within governments powers and obligations to do. It would provide for a fairer distribution of government funds and better spending of taxpayers money. The amount of direct orders are too high and not truly justifiable. The appeal system prohibits challenging the system and the procurement process in general is full of inconsistencies, breaches procurement regulations themselves and are poorly drafted and implemented.
If the government wants to really advance in enhancing good governance, strengthening the Contracts Department and reforming the procurement process is a basic necessity that has been already delayed for far too long.”
MHRA – Chairman Tony Zahra
“The budget for financial year 2024 is seen by the Malta Hotels and Restaurants Association (MHRA) as an opportunity for government to boost tourism in the right direction given the lack of a long term plan.MHRA has based it’s proposals on three important pillars: sustainability, connectivity and innovation.
The government must address the issues such as the potential oversupply of bed stock, the Inflationary impact on the industry Improvement of product offer particularly cleanliness and infrastructure and others. We are also concerned with the fate of Air Malta and the new airline and have urged government to privatize partially the new airline at its inception.
Finally we have laid emphasis on innovation which encompasses digitalization and rethinking the way we do business.”
GWU - Secretary General Josef Bugeja
“GWU emphasizes that the primary focus for Budget 2024 should be enhancing the overall quality of life, encompassing aspects such as financial security, job satisfaction, family well-being, stability and health and safety.To address these concerns, GWU has put forth several proposals amongst others, the continuation of the current policy, of subsidising energy, fuel and cereal tariffs. This is aimed at safeguarding consumers and workplaces by maintaining price stability. Additionally, to continue fighting inflation GWU proposed a Soft Loan Scheme financed from the MDB to assist food importers in bulk purchases, helping to keep prices stable and capped. Protecting the purchasing power of workers and pensioners without adding undue tax burdens, we proposed adjusting tax bands in line with inflation. This ensures that everyone receives the whole cost of living adjustment.
In line with our primary focus, we also proposed that a new legislation is enacted to ensure that the principle of equal pay for jobs of equal value is extended to cover all employees within the same organization who perform work of the same value. This must also be complemented with the Automatic Enrolment of Employees in a Trade Union of their choice. GWU also highlights the need to enhance social protection including pensions, and refining the second mechanism of (COLA) to provide better support to vulnerable individuals.”
UHM – CEO Josef Vella
“In current circumstances the biggest challenge is inflation and the sharp rise in the cost of living as this is having a negative and direct impact on the quality of life. This pinch is not only being felt by low-income earners but also by the middle class.Moreover, while the overall rate of inflation might be showing signs of a downward trajectory, food prices are bucking this trend as in this category inflation is still hovering around 10%. Though the tools to fight inflation are rather limited, government has one option available which has not yet implemented – stop taxing COLA. UHM Voice of the Workers is calling on government to implement such measure as this would boost workers’ spending power without increasing salaries.
Moreover, the current practice of taxing COLA is socially unjust as this is meant to compensate the cost of living increase of the previous year. Hence, it is unfair that government takes back part of what is dishing out as compensation.”
On Sunday morning, during a televised interview on NET TV, Grech said that the Nationalist Party believes in an economy of integrity that delivers high-paying jobs, similar to what past PN governments had done.
“My politics focuses on a better standard of living in this country and won’t waste time on the grave shortcomings of this government. Everyone knows that Robert Abela is weak and that his government is doing nothing to address the rising cost of living and the environmental degradation,” Grech said.
He appealed to the Prime Minister to keep the COLA tax-free and help employers so they don’t suffer the burden of the increase in wages.
“In recent years we understood that workers can only prosper if the economy grew […] In order for the economy to grow, we need to sustain businesses,” Abela stated.
He referred to the sealed agreement for an increase in the minimum wage levels, under which workers will also see their minimum wage for a 40-hour work week rise incrementally over four years.
The minimum wage for workers over 18 will rise to €200.73 in 2024, then €203.73 in 2025, €206.73 in 2026, and €210.73 in 2027. The hourly rate will rise from €4.82 to €5.34 next year.
"Next January, the minimum wage will increase by €21 per week. It means that for every €1,000 that a worker currently receives, they will be paid €1,100 from next January. In a year the increase will be equivalent to 40 days of the current wage," Abela said.