The Malta Independent 4 December 2020, Friday

TMID Editorial: Budget 2021 - A sound plan for the Covid-19 era

Tuesday, 20 October 2020, 09:28 Last update: about 2 months ago

The government yesterday unveiled a rather positive budget, with no new taxes and several economic and social incentives.

It was not unlike other budgets announced by the previous administration, but the circumstances - the world we are living in today - is completely different to what it was then.

The financial plan announced by Finance Minister Edward Scicluna yesterday hit a lot of right notes for what is required in this Covid-19 era.

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The main aim of the budget is to safeguard jobs and incentivise consumption. Several positive measures were announced, including the second round of vouchers, another income tax refund, an increase in children’s allowance and extra spending power for the elderly.

The crucial wage supplement scheme, which has been instrumental in saving thousands of jobs, is being retained until March and, more importantly, the government is considering fine tuning the scheme to zoom in on the sectors where this form of assistance is most needed. The first few months of the scheme have served as an experiment. Now is the time to look more closely at the figures and see whether some sectors need it more than others, or whether the amounts can be decreased for certain sectors that are doing well, with the amount given to others who are still struggling.

Other welcome schemes include those aimed at ensuring continuation in the property market, and the fiscal incentives on third pillar pensions.

Such schemes are aimed at facilitating continuity in our everyday lives, something that is not easy to do in a world where social distancing has become the norm and economic growth has been reversed.  

It was explained yesterday, during a press briefing at the Office of the Prime Minister, that this is possible because our economy was strong before the pandemic hit and, despite the fact that Malta is also feeling the effects of Covid-19, we remain in a rather flexible position and can afford to continue measures aimed at sustaining the economy and jobs.

Now one might argue over the reasons behind the surplus that Malta registered over the past few years. Some might say that some of the money came from the controversial citizenship for sale scheme, or from an economy that is dependent on tens of thousands of foreign workers. But the fact remains that Malta is in a much stronger economic position than many of its European counterparts and can sustain measures aimed at stimulating the economy.

Not only, but the government is once again able to announce a myriad of social measures.

This budget would not have seemed like much a year or two ago, but in the current circumstances, it is more than one could have hoped for. We have to see it also in the context of a drastic increase in spending on healthcare and other Covid-19 related measures.

Perhaps one would have liked to see more measures related to sectors like the environment, culture and others, but these difficult times require a more targeted approach on priority areas.

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