As the October sun sets, all eyes turn to Parliament as the night of the Budget is upon us once again.
It’s the first Budget of this legislature since the March 2022 general election, but it’s also the tenth consecutive budget under a Labour government.
Finance Minister Clyde Caruana will be delivering his speech outlining the government’s economic vision for the coming year in Parliament at 6:30pm.
The theme set out for this year’s government is ‘Certainty and Stability’, the latest indicator that in times of record inflation and economic uncertainty owing to events in Europe the government’s priority is set to be keeping the ship steady.
The Malta Independent will be with you throughout the night bringing you a live commentary from Caruana’s speech and reactions to the newly announced measures as they come in to us.
Our team will also be working on summarising the measures which are announced. They can be read elsewhere on our website.
21:45: Good night, and thank you for following!
21:45: Caruana's conclusion brings this live blog to an end. You can check out the key points from the Budget for 2023 at the below links:
--- Children’s Allowance to go up €90 for every child
--- Discussions with stakeholders for services vehicles to be removed from roads before 9am
--- Sports and culture - Physical Education lessons to be extended
--- Increasing court efficiency while supporting victims, Caruana outlines way forward
--- Taxes and finance: Inflation expected to drop to 3.7% next year
--- By 2024, Malta will have 1,200 more electric vehicle charging points
--- €600 million allocated to absorb energy and cereal price increases
--- More Free medicines and treatments to be introduced
--- €1.6m CT scanner for St Vincent de Paul Home
--- ‘We are spending within our means’ - Finance Minister
--- ‘Tough decisions on Air Malta needed, but country will always have national airline'
--- Energy bills would have more than doubled if not for government intervention
--- COLA set at record €9.90 for 2023
If you want to check out the reactions to the Budget which are coming in, click here.
21:24: Just shy of the three-hour mark, Clyde Caruana's speech comes to a close.
But the fun isn't over just yet.
Reactions from unions and associations representing different sectors of society are already filtering in. We are also waiting on the government and the opposition to host their customary post-Budget press conferences. The government's press conference will largely be a repeat of what we've just heard and ready, but the opposition's press conference will give a first hint at what their views on the Budget are.
21:23: He said that the government will continue to help all facets of society – facets he mentioned one by one – and said that while it’s easy to fall into the trap of negativity and of internet comments, like one has just one mother, one has only one country and it’s up to everyone to improve it.
He quoted from the national anthem, saying that when a people is united it can face any challenge – he said that it was unity that had built this country as it is.
“This is a Malta which will keep fighting for progress. This is a Malta which tomorrow, will have a more beautiful future,” he concluded.
21:20: Caruana is now reaching his conclusion.
He said that the people can be certain of one thing: “with us, you know where you are.”
He said that despite all the challenges, the government had come to face them today and explained the challenges: “we did not shy away from what is nice or from what isn’t nice,” he said.
He said that the world is a complex one, but is certainly not all “darkness and negativity as others like to draw it.”
“With all its defects, my country remains my country. With all its defects, I will keep fighting for my country. Because my country doesn’t have only defects. It has heart. It has resilience. It has the hope of its people. It has the desire to keep improving. To keep changing,” Caruana said.
21:18: Meanwhile on the cultural sector, Caruana said that the coming years will see the completion of the restoration of the Grandmaster’s Palace while the restoration of bastions and churches will continue.
The government will invest heavily in the restoration of Villa Guardamangia, the only residence outside the UK in which Queen Elizabeth II had resided, he said - a project which had already been announced in the past.
The government will also be issuing a tender worth €2.5m for the restoration of the aqueducts in Gozo.
For the first time ever, Malta will take part in the London Design Biennale, which will give exposure to the artistic and creative sectors. Malta will also take part in the 2024 Venice Biennale.
2023 will also see the completion of various projects at MICAS, including the galleries, the sculpture garden and the administration offices.
21:16: On sports, Physical Education lessons will be extended in 2023 and there will be an established minimum number of PE lessons, Caruana announced.
Caruana said that there is already a pilot project underway where students have a daily PE lesson.
The government will see to it that the motorsports track in Ħal Far is completed by the end of this legislature.
The investment to turn the Marsa sports complex into a high-level sports hub will continue.
The government will also ensure that the Olympic size swimming pool at Cospicua and the new sports facilities at the former Maria Assunta school in Ħamrun will be completed by the end of the legislature.
The tax rebate for parents who send their children to sports, artistic and cultural activities will increase from €100 to €300.
21:14: Good governance will remain the priority of the government, Caruana said as he spoke about the country’s fight against money laundering. “Moving forward on the guidelines provided by the FATF, Moneyval and other organisations is also our priority.”
Caruana said that although a lot of effort was put towards getting Malta out of the grey-list, “we have to assure that we keep the same level of commitment. We have to create reforms where needed in order to keep the trust in our institutions.”
21:13: Throughout the year 2023, Malta will be introducing its first electronic tagging systems as approved by Parliament, as well as continuing with the renovations at the Corradino Correctional Facility.
With regards to the Victim Support Agency, Caruana said that since its inception, the agency has helped more than 1,600 people. These include victims of aggravated assault, domestic violence, sexual abuse, verbal abuse and hate crimes.
Due to its importance, Caruana said that a helpline is going to be set up for 24 hour support in order to strengthen the service and make it more holistic for victims.
Talking about domestic violence, Caruana pledged to improve the capabilities of the commission on violence as based on gender and domestic violence.
21:11: Caruana said that incentives put in place in 2016 by the government to promote service workers, in order to continue on in their job as past their 25 year pension time frame has begun to bear fruit.
These incentives include an increase of 23% in their pension when they complete another four years of service, and a service pension for widows who lost someone while in service – where they will receive the pension for 5 years.
Caruana also pledged that throughout 2023, all localities in Malta will be covered by the community policing service. The figure currently stands at 76% for all of Malta and Gozo.
Speaking about the Armed Forces of Malta, Caruana stated that an investment of €12 million has already been spent on new facilities and a Virtual Small Arms Training Simulator. This does not include a further €10 million which was spent in order to strengthen the Army Air Force.
The Armed Forces are also going to receive a new ship to improve their fleet. This is expected to cost €53 million and it will be financed through European Funds.
A big investment is also being made in vehicles for the Police Force and Armed Forces, as well as in new fire engines for both industrial and domestic use.
For the Civil Protection Department, new Hazmat vehicles are also being bought in order to prepare for electric care fires. With regards to fires on vehicles at sea, €2 million was spent on a specialised boat to better battle boat fires.
21:09: Moving onto the justice sector, the government pledged to reform certain procedural aspects, particularly related to the Family Court but also related to Criminal and Civil Courts.
Administrative space in court will also be converted into new courtrooms in an effort to increase the number of sittings and reduce the time it takes for court cases to be heard.
A reform will also see magistrates be specifically dedicated to inquiries – a proposal which was first put forward by Alfred Sant in the 1996 legislature and which was resurrected by the Nationalist Party in recent months.
Work is also being done on the Asset Recovery Bureau, which will be fitted with the latest technology and appropriate space needed in order to properly preserve confiscated items.
As from 1st January, Malta will have a non-permanent seat at the United Nations council. This is the second time Malta was given this honour, and it will be used to strengthen bilateral relations between countries with regards to economy and commerce.
21:04: On the Agriculture, Farming and Fishing sector the government is working on the development of the first National Policy for Sustainable Food, which Policy will also contain the Action Plan for Organic Production in Malta.
Works have also started to initiate what is known as carbon farming. During this year the first phase of this project has been completed thanks to a pilot project, while during 2023 the effects of this project will be analyzed and a national strategy will follow. Caruana said.
21:02: On waste management, the Multi-Material Recovery Facility in Hal Far will start operating in 2023, while next year will see the launch of a €50 million Organic Processing Plant as well.
New gate fees to reduce the amount of waste which is landfilled and to encourage waste separation will be introduced from 1 January 2023.
A Skip Management Facility will also be built in the coming years to reduce around 47,000 tonnes of bulky waste from the landfill and instead get it processed and recycled.
On water management, measures on the use of grey water are being reintroduced while work is ongoing to change around 40 kilometres of mains pipework.
A new pipeline will also connect the Reverse Osmosis plant in Cirkewwa to reservoirs in Ta’ Qali, while another pipeline will transfer water from Naxxar to Salini. The cost of those two projects is €14.5 million.
20:58: Caruana reiterated the government’s flagship pre-election promise: that €700 million will be invested into the environment across the next seven years.
Robert Abela had launched the proposal during the 2022 election campaign last February, with the money being slated for environmental improvements to urban areas.
Amongst the projects mentioned during the election campaign were the creation of open spaces in Floriana and San Gwann characterised by gardens and urban reclamation projects.
Progress on any of the projects mentioned has been scant in the first months of the Labour government’s new legislature, but Caruana said that the private sector will be given the opportunity to invest in these projects and that the first phase of projects will be in Cospicua, Birzebbuga, Hamrun, Marsa, Siggiewi, and San Gwann.
A new agency will be set up to coordinate these projects, he said.
20:56: Turning to the green economy, Caruana dedicated the first part of his speech to energy, saying that the route for the second interconnector cable to Sicily has been identified.
The current solar panel schemes will also remain in place, while new interest-free loans will be given by the government to companies who wish to switch their vehicle fleets to once powered by electricity.
He said that work is ongoing for Malta to have 1,200 charging points by 2024.
Throughout the coming year, Caruana said that the government will be launching the implementation phase of a consultation process which looked into the possibility of offshore energy. The private sector will be invited to participate in this project.
20:52: A Sustainable Urban Development fund for Gozo has also been created, and will contain a financial kitty of €60 million.
€60 million had already been earmarked for Gozo’s sustainable urban development from as far back as September 2021, when it was listed in a document which proposed how Malta would be investing the €2.27 billion in European funds which it had been allocated for the 2021-2027 programming period.
Studies on land reclamation will continue, while discussions for certain services on Malta’s roads are not started before 9am in an effort to reduce traffic will also kick off.
A number of other schemes related to the purchasing of electric or low pollution vehicles have also been renewed.
A contract has also been signed for a ferry station to be built in Bugibba, while evaluations are underway for one in Marsamxett.
Caruana said that the government is also discussing a new Public Service Obligation for the Gozo Channel. The current PSO expired in 2017 and Prime Minister Robert Abela told journalists a week or so ago that the service may be opened to an open tender in the near future.
20:48: Turning to sustainable development, schemes related to properties bought in Urban Conservation Areas will continue, while the first-time buyers scheme and second-time buyers scheme will also continue.
On roads, he said that in the coming three years a number of major projects will be completed.
He said that the Mriehel Underpass project will soon be finished, while other priorities include the Kirkop Tunnels, Airport Intersection Project, and the Luqa Junction.
Plans are also in place for the new Msida Creek Junction, and investment will continue in residential roads in Gozo.
In the maritime sector, Caruana said that a contract had been signed for works on extending the Pinto and Lascaris Wharves so that a Wharf which can hold ships which are around 330 metres long.
He said that the Grand Harbour Clean Air project which will allow ships to turn off their engines when they berth in Malta and which will massively reduce pollution will be completed by the end of next year.
20:43: A new Acute Psychiatric Care Hospital will be built at Mater Dei Hospital to complement services already offered at Mt Carmel Hospital, while the Mental Health Services will also be promoting prevention and support measures so to increase education about mental health at the workplace as well.
20:41: A number of new health services will be introduced, such as a new Oncology Clinic at primary care level, a Diabetes Centre at the Qormi Health Centre, Genitourinary Clinics at community level, and GP Appointment Clinics at health centres.
The services at the Assisted Reproductive Technology Clinic (ART) will also be extended for parents trying for a second child.
In capital projects for the health sector include the building of a new blood bank, a new outpatients building and underground parking at Mater Dei Hospital, the Regional Health Centre named after Vincent Moran in Paola, and a new health centre in Rabat, Gozo.
The third Cardiac Catherisation Suite will also be bought, while there will be investment in the Medical imaging department at the Accident and Emergency Department in Mater Dei Hospital.
20:35: Turning to the health sector, Caruana said that the government had absorbed an extra €3 million in medicine costs and €4 million in medical consumption due to the price increases of recent months.
He said that as from next year a number of new medicines will be added to the government formulary.
The Human Papillomavirus (HPV) vaccine will be given to all boys born after the year 2000, multiple sclerosis medicines, diabetes and osteoporosis medicines, specialised nutrition formulas, and home chemotherapy pumps are among the things being added to the formulary.
20:31: There will be significant investment in digitalisation, with the justice sector and maritime registry being on the receiving end of €10 million and €6 million investments respectively. Investment has also been reserved for digitising the health sector.
On the lands sector, Caruana said that a scheme for shops which belong to the government and are leased on an emphyteusis and are outside Valletta will be reopened, so that the lease can be renewed for 45 years.
He mentioned a measure which was announced last week to deal with people who have part of their property built on government land, and also said that issues related to agricultural leases will also be addressed.
20:27: Caruana dedicates a chunk of his speech to Air Malta, saying that the airline has been a major challenge.
He says that different governments left the airline in a position where it could never be efficient, and that governments had kept throwing millions into a well with no bottom which ultimately increased the problems rather than solved them.
He said that the European Commission – from whom Malta has applied for permission to give state aid to the airline – will not give special treatment to Malta.
He said that the government still needs to find a solution in the best interest of the airline but within the lines of free market and European regulation.
He said that the European Commission is evaluating the different choices it has before it, but added that Malta will continue to have a national airline – he however did not specify whether this would be Air Malta or not.
“Whatever the result of the next step is, there is a lot of work which has to be done for Malta to have an airline which can go from Luqa to another point in Europe and at least doesn’t lose money and is cost effective,” he said.
20:23: Turning to tourism, Caruana said that Malta will have attracted around 2.1 million tourists by the end of the year – equivalent to 81% of the volume of 2019, Malta’s current record high year.
He announced a scheme which will be operated in tandem with the Gozo Tourism Association to attract long-stay tourists, particularly in the low season, to Gozo.
The Foundation for Tourism Zone Development will be rebranded to the Agency for Tourism Zone Development Regeneration and will, among other things, introduce a concept of Town Centre Management in Paceville.
20:20: Social enterprises will be eligible for a €70,000 tax credit over three years under the Micro Invest scheme, while more emphasis will be put on the films industry and the gaming industry, Caruana said.
On residence schemes, Caruana said that there is to the need to carry out an evaluation to see whether certain schemes need to be updated to reflect the “international changes” which have happened over time.
He said that Malta must remain attractive and the integrity of any programme must be kept, especially in the midst of international pressure.
Malta is currently facing infringement proceedings from the European Union over its own Golden Passport Scheme.
20:17: Studies are ongoing for Malta to launch a Venture Capital Fund, while Caruana said that the government will also be taking part in the World Expo which will be held in Osaka, Japan, in 2025.
A scheme introduced to help businesses affected by Covid-19 to invest will also be extended, while businesses will now be able to get €50,000 per year rather than €25,000 for three years in rental subsidies.
The Cabinet, Caruana says, has approved calls for expressions of interest from the private sector with the intention of giving new life to Evans Building, the former Pixkerija in Valletta and the Chalet in Sliema.
“We want projects which respect the value of the place, which are sustainable and which create new opportunities,” he said, adding that more sites are being explored.
20:12: Turning to measures to grow the economy, Caruana says that Malta Enterprise has assisted 35 start-ups over the past year.
As from next year, Caruana announced that the government will launch a one-stop shop offering assistance services to start-ups.
An EU start-up summit will also be launched, bringing together Europe’s best start-ups.
A €40 million investment fund will be made available to SMEs, while Malta Enterprise will be doubling financial assistance in the form of cash grants for all Maltese companies investing in digital and sustainable projects. The grant will now cover 50% of the investment, up to a maximum €100,000.
Maltese enterprises will now also be able to benefit from a maximum of €40,000 tax credit when investing 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.
20:10: On education, he says that during 2023, works in schools in Ghaxaq, Msida, and Rabat will be completed. The sports complex at the Santa Lucija school will also be completed, he said, while works will continue at the Nadur school in Gozo.
The one-tablet-per child measure will be extended, while a new laptop will be given to every student from Year 7 upwards from next scholastic year.
Tax credits for students who want to follow Masters or Doctorates will also be extended, as will the Youth Guarantee Scheme.
Discussions on an Education Act for University will continue, while the new Institute for Tourism Studies campus will start being built.
In January, discussions will also begin on a new sectoral agreement for educators.
20:04: 17,000 pensioners will benefit from a tax exemption on their pension if they choose to continue working. That tax exemption will increase from 20% to 40% for the coming year and will cost the government €27 million.
The In-Work Benefit saw workers working at atypical times with a salary of lower than €20,000 in particular industries receive a cheque of €150 as part of the last Budget. Next year, they will receive a cheque of the same value.
20:01: Moving onto measures related to the workplace, Caruana says that measures from last year’s Budget which saw the decreasing of taxes for those who work part-time and overtime, and the increase in the In-Work Benefit will remain in place.
He also announced that the government’s tax refund cheques will return in 2023, with over 250,000 people eligible to receive a cheque in the mail.
The cheques will be between €60 and €140 with the highest refund being given to those with the lowest income.
The measure will cost the government €26 million.
The tax refund cheque has become a familiar financial measure under the Labour government, having first been handed out in 2018 during the Joseph Muscat premiership.
It was also the source of controversy earlier this year, when the cheques were timed to arrive in people’s mailboxes just a week before the 2022 general election – even though they had been announced several weeks prior.
In July, the international election monitoring body OSCE ruled that the cheques violated international standards related to free and fair elections and said that major announcements on financial allocations which might create a favourable perception of any given party should not occur during election campaigns.
On its part, the government had denied that this was a vote-buying exercise.
19:57: Caruana explained that a country’s debt is the strongest metric that one can use to measure the strength and sustainability of the government’s finances.
He says that the government debt to GDP ratio has remained stable across the years.
“Other countries have a debt to GDP ratio of 150% or even 200%. In many countries it is over 100%. In Malta, the figure is around 60%,” he says.
“When you make the argument that the government has lost control of its debt, the numbers say otherwise. The numbers say that you are and you will remain mistaken. On this, you are dead wrong,” Caruana says, referring to the PN.
19:55: Caruana said that at the start of the year he was aiming towards decreasing taxes, but developments in the international camp had meant that the country must now focus on other priorities.
“Since we’ve promised it, we will do it at the opportune moment. As we saw in other countries, irresponsible reductions in taxes can throw a whole country into chaos,” Caruana says, in a nod towards the chaos Liz Truss called in her 44-day tenure as British Prime Minister just this month.
He said that the planned tax reductions would have left €510 in a family’s pockets, but the government’s energy politics has now left an extra €1,300 in that same family’s pocket on their electricity bill, and €700 in their fuel expenses.
19:50: Despite these interventions having an impact on government finances, Caruana said that the deficit had still been brought down from 7.8% to 5.8% as he had projected in the last Budget.
He attributed part of this to the work of the Tax Department, saying that when one cuts out economic growth, the department had collected €120 million more in taxes, something which he said is the fruit of strengthening on enforcement and increase in interest rates for those who do not pay on time.
Malta’s debt meanwhile currently stands at 57% of the country’s GDP, Caruana said.
This debt is forecasted to increase to 59.1% in 2023 before then increasing further still to 60.3% in 2024.
The projections show that it will then level out at 60% in 2025.
He said that the government’s deficit is projected to remain stable at 5.5% for 2023, before decreasing to 3% in 2025.
He said that the government’s plan is to keep the country’s debt-to-GDP ratio close to or below 60%.
19:47: Turning now to sustainability in public finances, Caruana said that Malta’s economy had grown by 10.3% after the pandemic but noted that the war waged by Russia on Ukraine had aggravated inflationary pressures.
Speaking about local inflation rates, Caruana quoted from projections which showed that inflation in Malta stood at 5.7% during 2022 - a major increase from the 0.7% it stood at in 2021.
The projections however show that inflation will decrease to 3.7% in 2023, 2.6% in 2023, and then 1.9% in 2025.
Malta’s economy is projected to increase by 6% in real terms by the end of 2022, and by 3.5% in real terms and 7.3% in nominal terms.
Had the government not covered the rise in energy prices, the economy would have taken a 2.3% hit and inflation would have been 7.1% higher than it currently is. This would have meant that the risk of poverty would have increased by almost a whole percentage point to 16.3%.
19:42: The capping for the Private Rent Housing Benefit Scheme has also been increased by €100 per month across the board.
This means that it has gone from €400 to €500 per month for a one-bedroom residence, from €500 to €600 per month for a two-bedroom residence, and from €600 to €700 per month for a three-bedroom residence.
This Scheme provides a housing benefit to tenants on rent paid for premises leased as ordinary residence of the applicants and their family thus rendering the rent more affordable.
The Deposit Payment Scheme has been extended to cover properties of a maximum price of €225,000, while the New Hope Guarantee which is currently solely operated by APS Bank will see two other “prominent banks” enter into the scheme in the coming weeks as well.
19:40: On social and affordable accommodation, Caruana said that through the Rent to Assist Scheme, the government had kept the list of applications for affordable accommodation stable at 1,300 over the past two years – far away from the 3,000 which Malta was used to before.
The Equity Sharing Scheme will also be extended.
First-time buyers will also receive a grant of €10,000 split across 10 years in what is the implementation of one of the Labour Party’s flagship electoral proposals.
Robert Abela had said that the measure would cost a total of around €57 million across the legislature when he announced the proposal back in February prior to the 2022 general election.
This grant will be for anyone who has purchased a home for less than €500,000, and is without a means test. It is being applied retroactively to all those who bought their first home after 1 January 2022.
It will be operated by all commercial banks which give residential property loans.
19:35: At St Vincent de Paul, the government will be investing in a new CT scanner at the cost of €1.6 million while renovation works on St Joseph Hall will also continue. A garden for people with dementia at the residence will also be opened.
On active ageing, several services such as the Silver-T, Home Helper of Your Choice, and free stroke screening campaign will be continued.
A new Outreach Clinic will be opened at Dar Padova in Ghajnsielem as well, with services focused on vascular, podology, occupational therapy, and psychotherapy amongst others to be introduced.
19:31: The Carer’s Grant for parents who do not work so that they can take care of their adult children who have a severe disability has been increased significantly from €500 to €4,500 per year.
This grant was first introduced in January 2021 after being announced in the 2020 Budget.
To be eligible for the grant, the parent must not be in employment and lives in the same household of the child with a disability who is over 16 years of age and in receipt of an Increased Severe Disability Assistance.
The parent themselves also must not be in receipt of an Increased Carers Allowance, Carers Allowance or an Increased Severe Disability Assistance in order to be eligible.
The government will also be a giving a €200 tax credit per year for parents to use on therapy for every child with a disability.
People who buy a car which is Drive from Wheelchair will also benefit from a subsidy of not more than 20% of the price of the car. The subsidy will be of 10% if the car is bought second-hand.
19:28: The grants to those who are coeliac will increase by €20 per month to make up for increases in food.
Caruana also reiterates a budget measure announced last week, that more aid – in the form of a €10,000 grant to each school every year - will be given to schools for children who do not have the basic necessities.
Scheme Nine for children, likewise, will be widened as well. This too was announced last week.
Those who live on social benefits will, for the first time, receive the full COLA, while measures for the tapering of benefits will also be improved, Caruana says.
19:25: The Fostering Grant will also be improved, Caruana said.
As things stand today the Foster Care Allowance stops immediately when the parent adopts, but this will instead be phased out gradually as from 2023.
The phasing out will be across four years, with the parents receiving 80% of the grant in the first year of adoption, followed by 60%, 40% and 20% in each following year respectively.
Refunds related to local adoptions which can be up to €1,000 will also continue, he says.
19:23: The children’s allowance will also increase for 41,100 families, in a measure which is worth €5.6 million.
The Children’s Allowance is awarded to married couples, civil union couples, cohabiting couples, single parents, separated parents or returned migrants, having the care and custody of their children under 16 years of age and whose total annual income of relevant year (2 years prior to current year) from employment / social security is less than €25,409.
19:22: Caruana announced that two years of stamp duty will be covered by the government for those who, between the ages of 18 and 30, do not work for a period and are certified as having been receiving psychiatric assistance during that period from someone who is or was a government consultant.
The annual bonus for people who have reached retirement age but do not qualify for a pension because they did not have enough contributions has also been increased by €50.
Around 15,000 people – largely married women – will be the recipients of this measure.
A total of €10 million is being set aside to deal with past injustices, with Caruana saying that a total of €83.5 million has now been spent or is to be spent between 2017 and 2023 to deal with injustices left over by previous governments.
19:18: Caruana says that the capping for non-taxable pensions has been increased in order to reflect the increase in pensions.
The cap from next year will be of €14,968.
Those with a computation for married couples will see a further exemption of €3,600 per year.
A new limited for pensions for those who were born in 1962 or later will also be introduced.
From 2023, 56,000 pensioners will receive a variable addition of up to €1.50 per week, in a measure which will cost €1.7 million.
Service pensions will increase by €200, while the widowers pension will be adjusted again so that 9,000 widowers will have an increase of up to €3.54 per week. That measure will cost around €1.6 million.
19:15: Reiterating something which was already announced last week, Caruana said that an additional COLA mechanism which will not create any more burden on businesses but will help those most vulnerable will be implemented.
In the last Budget, the government had pledged that it was to start meeting stakeholders to discuss a new mechanism to help vulnerable families, which works independently of the COLA in circumstances where inflation rises by a lot.
The new mechanism, Caruana explains, is adapted to make up for the fact that the current COLA mechanism is based on the Retail Price Index (RPI) – which he says does not always reflect the consumption of a below-average income family.
The mechanism will come into being when global inflation is over 2% across a 12-month period, and when the inflation in three out of five of the main RPI categories – these categories being food; accommodation; electricity, water, gas, and fuel; home maintenance and appliances; and private healthcare – exceeds the average for the previous five years.
The mechanism will address all those who are receiving social benefits and those whose salary is below the Median Equivalised Income
80,000 people and 37,000 families will benefit from this measure and will received this compensation before Christmas, Caruana said.
19:13: Had the government not intervened in the energy sector, Caruana said, then the COLA would have stood at almost €25 per week.
He says that besides being a massive financial burden on families as such an increase would mean skyrocketing inflation, such an increase would have been a huge weight on businesses as well.
That increase, he believes, would have led to many businesses going bankrupt and many workers out of a job.
19:12: Some 100,000 pensioners will receive an increase in their pensions for yet another year.
Besides receiving the full €9.90 as allowed by the COLA, pensions will also be increased by €2.60 – meaning that pensions will increase by a total of €12.50 per week.
This is the equivalent of €650 in a whole year.
The measure will be worth €65 million, and it is the eighth year in a row that pensions have been increased.
This is over double the increase which pensioners received in the previous Budget which saw 95,000 pensioners receive around €24 million between them – equating to €5 a week each.
Of that figure €1.75 was the increase for the cost of living and €3.25 is an additional increase.
19:10: This year’s COLA adjustment, Caruana announces, will be of €9.90 per week.
This will be given to all workers, pensioners, and those on social benefits. Stipends will also increase on a pro-rata basis.
This is the highest COLA increase since the system was introduced back in 1990.
Read more about that here.
19:09: Turning to social measures now, Caruana says that the difference between Malta and other countries is that Malta has introduced more social assistance with wisdom and prudence.
“We are spending within our means,” Caruana says.
He said that as the economy grows, the government transfers its income into more social assistance.
“As an economist I think that we cannot spend that which we do not have. But as a Labourite, I believe that our society is judged also on how much we help those who can cope with the least,” he says.
This is why, he says, the government had remained strong when faced with calls for amendments to the Cost of Living Allowance (COLA) so that it can be reduced this year.
He says that the government wanted to show that it will continue to support workers against inflation, like it is supporting businesses with their energy bills and through the wage supplement during the Covid-19
19:06: He said that all of this revolves around energy, saying that this is the matter which they can control the most.
Therefore, he said, the government – as has already been announced – has set aside over €600 million for the energy and cereals sector.
This is effectively €70,000 per hour and almost 10% of the government’s annual expenditure, Caruana says.
He said that this also signifies an element of financial discipline in the country’s administration, but says that the government had successfully manoeuvred this without any knocks or bumps.
“This is a more efficient government which reaches its targets with better use of money. What you didn’t do, we are doing,” he says.
19:04: Caruana however says that he has an appeal for those who produce and sell their products in Malta to look at the long-term and use this opportunity to show the value of its product to the Maltese consumer.
This means keeping their prices competitive when compared to products abroad so that people are attracted to them.
19:02: The first part of this speech will focus on the country’s economic environment, and Caruana gets right into it by speaking about inflation.
He says that inflation is a vicious circle and goes into an explanation as to why things become more expensive on supermarket shelves, noting that Malta imports over 40% of its foodstuffs from Italy and the UK where inflation has “exploded.”
He says the price controls on basic necessities such as food would result in importers simply not importing any products which have their prices increased at source abroad, leading to empty supermarket shelves.
18:56: He says that there are five principles guiding the government across this “difficult and complex” road.
The first is the Labour Party’s “social good”, saying that poverty is rearing its head in countries which has allowed energy bills to increase. “Our heart was, is, and will remain a socialist one,” he says.
The second concerns a stable economy, Caruana says, as he speaks of how the government had stepped into keep energy bills stable – a measure which he says saved hundreds of businesses and without which Malta’s inflation rate would have been amongst the highest in Europe.
The third is on the country’s energy politics, where its dependence for energy has been diversified; while the fourth is keeping the country’s financial situation strong and under control.
He says that some wanted to scaremonger the economy into failure during the Covid-19 pandemic, but added that this had not happened.
“That type of politics failed in last March’s general election, and it will continue to fail in the future because scaremongering doesn’t work. People want mature and rational politics,” he says.
The fifth and final principle, Caruana says, is simply that the government knows what it’s doing and the people know where they are.
And with that, Caruana moves onto the first chapter of his speech.
18:49: Caruana rails against populism, saying that some were trying to go out into the streets to transfer people’s unhappiness at matters such as rising inflation to gain political points.
He says that the government will promote the road of “accountability and seriousness” over the road of insults, shouting and populism.
He says that the steps taken to protect families from prices increases was built on this philosophy.
18:45: Caruana says that Malta was the only country which said no to increasing energy prices.
He gives an overview of what the government has done to keep the country going in the right economic direction, and provides the first jibe against the Nationalist government of the night by saying that in times of crisis, previous administrations had passed the burden of rising energy costs onto the people.
Caruana continues by saying that had the government today done like the PN had done the damage would have been far greater.
He said that in 2008 the PN had lumped a €100 million burden onto the people. The impact of today’s situation is six times worse than that, Caruana said.
“You crucified an economy and burdened people; we are going to lead to more economic growth without burdening anyone,” Caruana added.
18:40: Caruana kicks off his speech by saying that the events which had happened in the last three years are usually things which happen over a span of decades, but said that despite a myriad of challenges – which he delves into one-by-one – the country and the government had remained “solid.”
18:37: And here we go, Caruana gets underway.
18:34: Some MPs are now tabling papers in Parliament, and we are now only minutes away from the start of Caruana's speech.
18:25: Refalo gets a telling off from the Speaker for taking a touch too long to answer a supplementary question from backbencher Rosianne Cutajar - right after sidestepping questions from the other side of the House on that historic stone marker which Refalo was found to have in his garden.
Refalo in fact jibes back at PN MP Julie Zahra, saying that he will receive Zahra - even to sing - at his garden whenever she wishes. That earns a rebuke from PN leader Bernard Grech, and an even sterner rebuke from the Speaker who says that there should be no attacks to anyone in the House.
Refalo denies that he attacked Zahra and apologies if his words caused offence.
We're still five minutes away from the Budget speech itself, but this is proving to be an intersting enough sideshow until then.
18:16: There is already some rucus in Parliament as Anton Refalo answers questions, prompting Speaker Anglu Farrugia to call for order. Meanwhile, we're only around 15 minutes away from Caruana's Budget speech.
18:06: We've already seen something of a break in tradition as Caruana unveiled a new Budget briefcase earlier in the day.
The briefcase utilised by Minister Caruana is a nod to Malta’s British past and displays the Republic of Malta’s coat of arms. It has two inscriptions; on the front side, ‘Ministru tal-Finanzi’ and a verse from the Maltese national anthem, ‘Saħħa l-ħaddiem’, on the backside.
Caruana used his private funds for the briefcase.
18:00: Good evening and welcome to our live blog of tonight's Budget 2023 speech. The main players have filtered into Parliament as Speaker Anglu Farrugia gets us underway. Finance Minister Clyde Caruana will begin his speech at around 6:30pm, right after conclusion of Parliamentary Questions.