The Malta Independent 6 August 2020, Thursday

Watch: Budget 2014 - Government proposes 250 measures

Malta Independent Monday, 4 November 2013, 21:34 Last update: about 7 years ago

Finance Minister Edward Scicluna is presenting the budget for 2014. Following are excerpts of his address in which he announced 250 measures to be introduced next year

In March the people of Malta made a choice for a change of leadership, the people wanted a continuity of what was doing well and a change for the better on matters that were not running smoothly.

Stability means that the country will generate more wealth. The changes being proposed today will lead to a better distribution of the wealth generated.

The country was spending much more than it was earning, and out credibility in the international sphere was being lost. This budget is not an accounting exercise, but one in which measures will be implemented to bring about more stability.

A priority will be to reduce the energy rates, a matter that was not deemed as possible. We will try to improve the economy to increase the standard of living of everyone. We will base the budget on making work pay.

We cannot concentrate on improving trade and commerce with a handful of countries, but we must widen our scope to cover other areas in the world.

There are signs that the economy is doing better, but the instability in the international sphere is not over. The economy is growing at a weak pace and unemployment is high.

The economic growth is estimated at 1.2 per cent, but there is a possibility that this could be higher. The unemployment rate at 6.4% is one of the lowest in the EU.

The government believes that the 2.7% deficit estimate for this year will be reached.

We are estimating a growth of 1.7% next year, which is higher than the European average. We are being prudent and hope that we can reach a higher target. We are being more cautious that what agencies are predicting for Malta.

The government is expecting an income of é3.05 billion in the current year while expenditure will go up to é3.23 billion. The debt will reach é179.8 million. We are estimating a deficit of é191.3 million or 2.7% of GDP. We will go bewlo 3% in the coming months.

The increase for the cost of living adjustment will be é3.49 per week, an increase that will be given to pensioners and students.

There will not be any new taxes in this budget.

The price of diesel will remain stabilise for six months up to March 2014, while the price of petrol will increase by just one cent as from January.

Car licences will see an adjustment of the rates from which the government will earn €21.4 million more than this year.

Capital expenditure will reach €453 million, €66 million more than last year. Projects include those at University, MCAST and government schools.

€94 million will be spent on the infrastructure and €59 million for the protection of the environment. Capital investment in the health sector will go up to €60.8 million from €52 million.

The income tax rate will be cut down from 32% to 29%, and this is applicable for single, parent and married computations.

Income tax will also be reduced for people in the lower income brackets. The parent computation will be widened from €9,300 to €9,800. Students will now be covered until they are 23 years of age.

Tax on part-time work will be reduced, with the limit extended to €10,000 from €7,000 and that for self-employed to €12,000. There will be no tax on the minimum wage.

Pensioners who work part-time will benefit from a 15% tax rate on their employment. Income tax payable by footballers will go down to 7.5% with the aim of making the sport more legitimate and pull it out of the black economy.

People who have an income from leases on property can choose to apply for a final withholding tax calculated on the gross income from the rest. This measure is aimed to encourage conformity with the rent market.

First-time buyers will not pay duty on the first €150,000 they spend on their new home, which will mean that they will save €5,200. There will no longer be a need for a government architect to draw up an estimate of the value of the property.

The government will be carrying out a study to establish what property it owns in Valletta.

The government will maintain its promise and reduce the energy rates by 25% (electricity) and 5% (water) as from March 2014.

It will work to seek more stability in the price of gas and fuels. The government will set up the Malta Oil and Gas Corporation, which will be the main government agency in the sector.

The government will also be offering incentives for alternative energy use.

On education, the government will be offering a breakfast club for students whose parents take them to school an hour before classes start. This will not affect teachers, although those who agree can help out against payment. Tax on child care centres will continue to be reduced.

Women over 40 years of age who have not worked for five years and who return to work will not be taxed while the tax paid by their husband will remain on the married rate. This will be for a maximum of five years.

Some 350 young people who are seeking employment will be given special attention for them to be able to integrate themselves in the world of work or receive some kind of training in an educational institution.

The government will be giving education a big boost with an increase in recurrent expenditure of é32 million for a total of é411.7 million. Some é15 million will be spent on school maintenance and the government pledges to build of five new schools in the next five years.

People over 45 years of age will be offered incentives to progress in their education.

The tablets scheme - whereby students will be given one each to help them in their studies - will start to be introduced next year.

Teachers will be allowed to have a sabbatical year in which they could invest in their studies.

€72 million will be granted to the University and Junior College.

Stipends will be increased, not only for next year but also for the year beyond. Next year they will go up 1.9%.

Students who repeat a year will continue to receive the stipend.

The law will be changed next year to allow 16-year-olds to vote in local council elections.

Malta will inrease its relations with the European Union, the United States, Russia, China and the Gulf States. Malta will give great attention to tackle irregular migration, but will seek to defend its interests.

Malta will seek to attract investment and in this respect it will launch the individual investor programme which will put Malta in the forefront along with other countries such as Canada, Portugal, Belgium and Singapore.

One of the aims is to generate funds that can be used for social projects such as housing, education and programmes for young people.

In tourism Malta will achieve what was unthinkable - more tourists will be coming over to establish another record. There will be a revision in the national strategy for tourism.

The government will launch a National Strategy for Research and Innovation 2020.

The opening hours of shops will be revised. A compromise will be sought between the needs of families and the needs of people who work in shops. A white paper in the subject will be drawn up for public discussion.

The government is requesting that the MFSA examines banking charges and interests offered to come up with any corrective measures to improve the situation.

The Valletta open market will go back to Ordnance Street.

The government will also be investing in the upgrading of roads and improve the traffic system in the short, medium and long terms. Trucks, heavy vehicles and horse-drawn carriages will be prohibited from using arterial roads at peak hours The Kappara fly-over will help ease the traffic flow in the main arteries and long-term plans will be drawn up, including better access between Malta and Gozo.

The CVA system in Valletta will be changed to improve the system. As from December, entry into Valletta will be free as from 2pm onwards. and free of charge all day on Saturday.

The government is in talks with the public transport operators and the future of the system depends on the outcome of these talks.

The registration tax of cars bought between 1 May 2004 and December 2008 will be refunded over a period of seven years. There will also be a reduction in the tax on vehicle registration.

Another €15 million will be given to Air Malta to continue strengthening its finances after the €40 million that was granted this year.

The government will commission a study on the possibility of having an airstrip in Gozo.

The directorate for planning and that for the environment will be separated. Waste will be managed according to European regulations; the previous plan was not in conformity and a new plan has been drawn up in this respect.

The government is drawing up a white paper to prohibit animal circuses from Malta.

An estimated €139 million have been budgeted for Malta's security.

The government is also planning a white paper aimed to lead to a revision of the local wardens system.

€444 million will be spent on the health sector, an increase of €38 million over the last budget. The most urgent matters that need to be seen to are the management of Mater Dei Hospital and the stock management of medicines.

The report drawn up on the situation by advisor John Dalli will "shock" people just as much as it shocked us. The government will seek consensus from the stakeholders on the way forward, including how the waiting lists problem is to be tackled. The government will work to increase the bedstock and eliminate having to treat patients in corridors.

The government will start to pay for both parents accompanying children needing treatment abroad.

The medicinals sector will be looked into to avoid situations when some items are out of stock while others become expired because too many items were bought.

A white paper on the POYC scheme will be drawn up in a bid to inprove the system.

The government is budgeting é970.7 million for social services which cover pensions, social housing and a myriad other benefits for people in need of sustenance.

The government is working on the introduction of means testing.

The government will be introducing regulatory basis for third pillar pensions that will be accompanied by fiscal incentives. The pensionable age will not be increased.

The waiting lists for social housing will be reduced and the government will offer incetives to people who would like to become owners of the residences they live in.

Members of Parliament will be paid pro rata depending on the amount of sessions they attend

 

The story is sponsored by HSBC Bank Malta p.l.c.

 

The full budget speech in English is in the pdf below

/uploads/filebrowser/Budget2014_Document.pdf

 

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