The Malta Independent 7 December 2024, Saturday
View E-Paper

Five things which went unsaid in Budget 2025

Albert Galea Sunday, 3 November 2024, 09:30 Last update: about 2 months ago

Much of the focus after Finance Minister Clyde Caruana read out his budget speech last Monday was on what was said.

The adjustments to the income tax bands, quite understandably, attracted a lot of discussion, while the decision to renew energy and fuel subsidies and increases in several benefits also drew attention.

But there is substance in what was also not said. From the three hospitals, which were part of the infamous concession, to the island of Gozo, there's quite a bit which the budget speech did not include details on.

ADVERTISEMENT

The Malta Independent on Sunday looks into some of the things which were missing from the minister's speech.

Plans for the three infamous hospitals

The story that dominated the headlines in the last year concerned three hospitals: the Gozo General Hospital, St Luke's Hospital and Karin Grech Hospital.

These three hospitals - back in 2016 - were handed over to Vitals Global Healthcare on a concession-basis. Steward Health Care took over the three hospitals in 2018.

Matters came to a head in February 2023 when a court rescinded the concession in a damning judgement which suggested that elements of the deal were "possibly criminal" and that there was also evidence of "fraudulent intent".

The hospitals were handed back to the government, and while Steward appealed, the judgement was confirmed in October 2023. As the government fights to get financial compensation from Steward, and the Opposition continually refers to €400m being wasted through the concession, many were expecting the budget to feature plans for what the government will do with the three hospitals.

Yet, those plans were nowhere to be seen.

The Health Ministry announced plans for an embellished Gozo General Hospital last May, a month before the European Parliament elections, and also spoke of plans to relocate some services towards a revamped St Luke's Hospital - but none of that featured in Clyde Caruana's budget speech.

In fact, none of the three hospitals, which were part of the concession, were named at any point in Caruana's 150-minute speech. It's a significant omission, given the prominence of the hospitals' deal.

Gozo

The sister island is a sector which always attracts significant attention when budget day comes around. The Nationalist Party - after each budget - has consistently said something along the lines of "Gozo has been forgotten". This is generally irrespective of what the budget actually includes, but this time around they may have a point.

The budget speech is usually divided into chapters, which then include sub-chapters. Some years the chapters and sub-chapters relate to specific sectors and themes, other times they are more thematic. This year's speech was a mix of the two - but either way did not include a specific sub-chapter dedicated to Gozo.

Instead, we got several mentions of the sister island spread across the speech: but almost all of these mentions were in relation to projects, which had already been inaugurated or where work is already ongoing, and not announcements of new projects.

For example: the Finance Minister mentioned Dar San Ġużepp, which was inaugurated last March; new schools like the one in Rabat, which have already been built and the Aquatics Centre in Rabat, where work has now finished after multiple missed deadlines and target dates.

We were afforded one paragraph outlining a semblance of a vision for Gozo: "Gozo has unique characteristics which we need to preserve, as that is how we maintain its value and sustainability. We need to keep addressing Gozo's double insularity and remain committed to ensuring Gozo's connectivity," Caruana said in his speech.

A direct commitment made was to continue to revamp arterial roads in Gozo - although these arterial roads were not named or specified, and another one was for the Occupational Health & Safety Authority (OHSA) to establish an office in Gozo.

There were other mentions to restorations of the aqueducts, which run between Rabat and Ta' Pinu, and on works to the Gozo Museum - but not much else.

Those seeking details on the Gozo law courts, Gozo General Hospital, the Gozo ferry service - where stakeholders wanted investment, particularly to replace the much-maligned Nikolaus, and the Gozo rural airfield, which was recently approved by the Planning Authority were left wanting.

University and MCAST

Education was given some due emphasis in Caruana's speech, and while no new schools were mentioned during the speech, Caruana pledged a maintenance programme which will see 100 schools revamped in the space of 13 years - with eight schools being fixed up per year.

This is a strong measure in favour of revamping the environments that students learn and study in, but for comparison there was no mention of tertiary educational institutions such as the University of Malta and MCAST.

In fairness, both institutions have been subject to significant investment in the past few years, but there is still work to be done. In the case of the University of Malta, for example, there is no sign as to when works on the long-awaited sports complex will begin even though permits have been approved for it.

At MCAST, an issue related to the expired collective agreement for lecturers - one that has caused significant issues due to the industrial action that came out of it - is still persisting, and no commitment was included in the budget for this matter to be resolved.

There is precedent for collective agreements to be mentioned in the budget speech: this year, Caruana mentioned the collective agreement signed for educators in State schools, and last year, Caruana said that the government would be sitting down for talks with a number of unions representing public service workers for what was described as the "country's largest collective agreement".

Mandatory union membership

The topic of mandatory union membership has courted controversy as of late. Ever since it was a general election pledge in the Labour Party's 2022 manifesto, there has been plenty of discussion on the philosophy of the proposal and how it would be implemented - or even if it should be implemented in the first place.

The battle lines since then have been quite clearly drawn: unions and organisations that emphasise on workers' rights have backed the proposal, while those representing businesses and employers have been dead-set against it.

Indeed this year, the General Workers' Union, which has been one of the big proponents of the idea, included mandatory union membership in its pre-budget proposals, as it has always done since 2019, and the UĦM began calling for mandatory union membership for low-income workers in spring 2022. 

Parliamentary secretary Andy Ellul is the person politically responsible for this reform, and in September he told journalists that the reform would come well before the end of the legislature - but when the budget speech came, mandatory union membership went unmentioned.

The UĦM's reaction to this omission was to label the government as being scared of employers. Make no mistake though, this is a topic which will crop up again soon - budget or not.

Stabbiltà

Many were quick to notice that one of the omissions from Caruana's budget speech was the government's food price capping scheme, Stabbiltà.

The scheme was introduced in February in order to combat food inflation, and ensured a minimum 15% reduction in Recommended Retail Price (RRP) based on the October 2023 rates for 15 food categories.

It was met by some opposition from businesses, but the Central Bank of Malta said that it did have an impact in slowing inflation on the products that it catered for.

Still, there was pressure from the business community against the scheme: the Chamber of Commerce had told The Malta Independent on Sunday in an interview that the scheme's impact was "negligible" and that renewing it would be nothing more than a "PR exercise".

Soon after that interview was published, the Prime Minister told journalists that the scheme had run its course and would not be renewed because a fall in inflation had made it redundant.

It's omission from the budget speech essentially confirms the Prime Minister's words.


  • don't miss