Mon - Fri: 9:00 - 17:30
Sat-Sun Closed
+356 21244895
Phone
55/1 Giuseppe Calì Street XBX1425 Ta' Xbiex Malta

News

Malta: Budget 2023, live from the Parliament

Pin It

malta budget 2023

Live blog: Budget 2023 as it happens

 

Malta's budget for 2023 will be announced in parliament on Monday evening, with Finance Minister Clyde Caruana expected to confirm energy subsidies and raise cost of living allowances. 

The budget comes at a time of global uncertainty sparked by persistently high rates of inflation, war in Ukraine and supply chain woes that persist from the height of the COVID-19 pandemic. 

Prime Minister Robert Abela has made it clear that there will be no new taxes announced. The 2023 budget, he said, would reflect the government's "social spirit". 

 

9.17pm Reactions to the budget have already started coming in.
The Malta Chamber says the bulk of proposals are directed at maintaining spending power rather than improving quality of life.
While subsidising energy and maintaining spending power is good for business, the country needs a longer-term strategy to be future-ready, it says.

 

9.14pm That concludes the bones of the budget speech: Caruana is now delivering his concluding remarks
Just like the introductory remarks, they are focused on playing to the gallery and taking a few digs at the Opposition. 
Caruana's voice rises as the banging on the benches gets more incessant. 
 "This is a budget that will have a better future," he concludes. 

 
 

9.12pm Having spent 20 minutes reminding people about projects that have already been announced, the finance minister ends with a genuinely changed measure.
Parents who send their children to sports, arts or cultural classes or activities will get a bigger tax rebate: €300 instead of the €100 it was previously. 

 

9.10pm Caruana says the Ħal Far racing track is still happening, and it will be financed through the National Development and Social Fund. I.e. passport money. 
There were unconfirmed rumours that the track would fall prey to budget cuts. 

 

9.06pm A push to introduce community policing now covers 76% of all towns and villages. It will be nationwide by the end of 2023, Caruana says. 

 

9.05pm A new scheme will encourage members of disciplined corps to continue working past their 25-year retirement period. The scheme will allow them to improve their service pension by 23% if they work for an additional four years, Caruana says. 
Malta’s police force has been struggling to attract recruits: this scheme may go some way towards improving that situation. 

 

9.01pm Demand for water is rising as the country grows, and work is therefore under way to increase reverse osmosis water production by 20 per cent. That’s a €12 million project. 
Works to build a network of underground tunnels to carry water across the country is around 25 per cent complete, Caruana says, and another tunnel will be built to move water from the RO facility in Cirkewwa to Ta’ Qala reservoirs.

 

8.58pm The first step of the Ecohive project in Magħtab will focus on a €50 million Organic Processing Plant. A skip management facility will also be developed in 2023, allowing around 47,000 tonnes of large waste to be removed from the Magħtab landfill, separated and processed. 

 

8.58pm The first step of the Ecohive project in Magħtab will focus on a €50 million Organic Processing Plant. A skip management facility will also be developed in 2023, allowing around 47,000 tonnes of large waste to be removed from the Magħtab landfill, separated and processed. 

 

8.55pm Studies are under way to identify public parking lots which can be turned into underground lots, allowing the surface area to be turned into publis spaces, the minister says. 
Expect the first concessions to that effect to be out within the first three months of 2023, he says. 

 

8.52pm The government’s headline electoral pitch was a €700 million investment in green urban lungs
Caruana says the first phase of that project will see preparatory work at sites in Cospicua, Birżebbuġa, Ħamrun, Marsa, Siġġiewi and San
Ġwann.
Works will be coordinated by a new, yet-to-be-established state agency. 
Work will also continue on the Ta’ Qali national park – the project will have soaked up €36.7 million in public funds by the end of this year, with an additional €13 million allocated to it for next year. 

 

8.50pm Schemes to encourage the installation of solar panels, heat pump water heaters, solar water heaters and well restorations will continue, he says. 
There are also plans to install 1,200 additional EV charging points across the country by 2024, he says. There are currently 340 overall.

 

8.47pm The government is in talks with Brussels about introducing a new, two-year Public Service Obligation for Malta-Gozo ferry trips, the minister says. 
There is “agreement” that prices for commuters will be immutable, he says. 
The current PSO, which Gozo Channel benefits from, lapsed years ago. 

 

8.45pm Incentives to buy an electric car are to increase to €11,000, rising to €12,000 if you also scrap your old car in the process. 
Those who tapped an older, similar fund for plug-in hybrid cars but are still waiting for their vehicle to arrive in Malta will still get the €11,000 grant, Caruana says. 
€20 million has been allocated to the schemes.

 

8.42pm Robert Attard, a partner with consultancy firm EY, has been analysing the budget for us.
His view?
“Budget Speech 2023 is primarily directed, in line with more recent budgets but more so in an inflationary period, at alleviating financial hardship of the underprivileged - targeting pensioners, social cases and citizens needing special attention.”
He says the budget confirms the government is continuing with its inflation-mitigating measures.   
Earlier we heard Clyde Caruana say that the cost-of-living adjustment would have been €25 had the government not intervened and inflation would have hit 12.8% rather than 5.7%
“In absolute terms, government estimates such inflation-mitigating measures (energy; cereals) to cost the country around €600m next year, that is, €70,000 per hour and around 10% of government's total annual recurring expenditure.”
Attard, a tax expert, points out that there are no major changes to the tax system.

8.41pm The government’s latest plan at reducing rush hour traffic is to try and prevent key services from operating before 9am. 
Talks are underway with stakeholders to see if that is possible. 
Caruana doesn’t say what ‘services’ he is referring to, though waste collection is the first to come to mind.

 

8.40pm Land reclamation remains on the cards, it seems. Caruana says the government has met with experts to “explore a number of projects”. Now work will begin on feasibility studies and environmental impact assessments. 

 

8.38pm Caruana is now speaking about infrastructural projects, but there’s nothing that hasn’t been announced previously. 
Work on the Msida Creek project announced last week will be “pushed forward” he says, as will dredging works in the Grand Harbour to improve Malta’s capacity to attract dry docking works. 
There are also plans to introduce a shore-to-ship power project to the Freeport, much like the ongoing one that will allow ships docked at the Grand Harbour to switch off their engines while docked. 

 

8.35pm Caruana is reminding people about previously-announced property incentives that will continue to apply in the coming year (and 2024).

Among them: tax benefits for those buying properties in UCA or that were vacant for several years, and a scheme allowing people restoring old homes to claim back up to €54,000 in VAT
Schemes slashing stamp duty for first- and second-time buyers and people buying properties in Gozo will also be extended. 

 

8.29pm Caruana is now presenting various initiatives linked to the health sector: from free HPV vaccines for boys born from 2000 onwards to chemotherapy pumps that cancer patients can use at home.
ART clinic services are to be extended to allow parents to access them when trying for a second baby. 

 

8.25pm  The government will be investing millions to further digitise some state functions: €10 million will go to digitising the court system and €6 million to digitising the maritime registry.
There will also be projects to digitise the pathology department, he says. 

 

8.22pm Speaking of flying, there's a problem titled 'Air Malta'. 
Doing nothing would have led to the airline eventually folding overnight, he says. It was just losing too much money. Now the government is in talks
with the EU Commission to secure state aid for it. 
But, the minister says, "there are no sacred cows" for the EU Commision.
"We will not be getting any form of special treatment, when countries and airlines far larger than ours did not”. 
The EU Commission is “evaluating its options” at the moment, he says, reassuring parliament that irrespective of what it decides, Malta will continue to have a national airline. 

 

8.20pm More airlines are on the cusp of shifting their registration to Malta, Caruana says, and there will be more announcements to that effect in the coming days. 
The government will be developing a masterplan for civil aviation and the area around the airport, to focus on developing economic niches like leasing and cargo, drones and electric vertical take-off and landing (eVTOL) aircraft. 

 

8.17pm “The time has come for various residency schemes to be revised,” Caruana says. The Global Residence Programme and Malta Residence Programme have been around for several years, he says, so now is the time to evaluate them and see if they need to be updated. 
“We want to ensure that Malta remains attractive in this regard, while ensuring these programmes continue, given international pressures,” he says. 

8.14pm There’s a vaguely-worded promise to help companies meet ESG (Environmental, Social, Governance) criteria, and then a bit more flesh: a rent subsidy offered to local businesses will double to €50,000 for the first three years. And the scheme will also be extended to apply to six years overall. 

 

8.11pm Local businesses that invest in digital projects will get up to 50% of their investment back, up to a maximum of €100,000.
Gozo-based businesses will also get an additional 10% as a tax credit, which can rise to 20% if the investment reduces their carbon footprint. 

 

8.09pm A scheme titled ‘Business Enhance’ will offer €40 million worth of cash grants to SMEs. And there will also be the EU-funded Digital Innovation Hub project, Caruana says, which will help SMEs and start-ups introduce things like cloud computing and AI into their work. 
Again, not too much detail. Caruana is flying through all these. 

 

8.07pm Our push to attract start-ups to Malta will see the country set up a one-stop shop named, somewhat creatively, Start Up Malta
It will help budding investors/companies establish themselves and tap funding schemes. 

 

8.06pm There will be a €5 million investment in a ‘Technology Extension Support’ scheme that will rope in private investors. Malta also intends to “broaden” its involvement in the Horizon Europe scheme – the EU’s key R&D programme – and “strengthen” the National STEM Community Fund.
But that’s all about that. There were no details or concrete pledges. 

 

8.03pm Students in year 7 are to be given a new laptop each, starting from the next scholastic year. That’s an extension of the government’s one-tablet-per-child policy. 
The government will also be restarting a programme of distributing fresh fruit and vegetables to primary school children and “starting talks” to extend that to secondary schools.

 

8.01pm Caruana listed some tax-related pensions benefits earlier. Here’s more: 40% of pensioners’ working income will be ignored by the taxman, up from 20% this year. 
The measure is obviously intended to encourage people to keep working past their pensionable age. 
It will cost €27 million, Caruana says. 

7.59pm As Jobsplus CEO, Caruana piloted an employment policy that looked to import tens of thousands of foreign workers
As finance minister, he’s in charge of implementing a new employment policy that focuses more on upskilling domestic workers. 
He reiterates that here: the “main principle” behind government measures will be to “improve the local (employment) market before looking to third countries,” he says. 

 

7.56pm Caruana spends some time explaining some basic numeracy here, most likely to parry criticism from the Opposition about ballooning national debt: the absolute increase in national debt is irrelevant if the economy is growing at a faster pace, he says. It is the percentage of debt, as a share of national wealth, that matters.

 

7.53pm Caruana sheds some light on the government’s thinking. Tax cuts would have saved families with two working adults €510 a year, he says, while subsidizing energy costs will save them €1,300 in electricity costs and €700 in car fuel
“The European Central Bank is veering towards a tighter monetary policy, to rein in inflation,” he says. “Reducing income tax at this stage would not be aligned with this policy and could send conflicting messages to the economy.” 
It would be interesting to be a fly on the wall during a conversation between Caruana and Kwasi Kwarteng. 

 

7.48pm The deficit will drop slightly, Caruana says, despite that promise to spend €600 million to insulate energy and cereal prices. He says that’s in large part thanks to the Inland Revenue Department collecting an additional €120 million in owed taxes this year. 

Debt will rise slightly, with Caruana saying the government's plan is to keep it within or around the 60% of GDP mark. 
"Projections show that from 2024 onwards debt will start declining," he says. 
You can read more about the government's finance projections - and its previous expectations - here.  

 

7.44pm Tourism did better than expected this year, Caruana says, with gaming, manufacturing and some other sectors also doing well. 
But international pressures will weigh down the local economy, he adds.
The economy will grow by around 3.5% in real terms next year, with private consumption rising about around 4%. Government expects investment to increase by 5.9%. 
The unemployment rate will most likely hover at around 3.1 %, the minister says, with inflation moderating to 3.7%. 

 

7.40pm Caruana is now onto the next chapter of this year’s budget speech, which focuses on government finances
He will now discuss GDP growth rates (and targets), the national deficit and debt, among other things. 

 

7.37pm  Here's one we missed earlier: student stipends are to rise by €50 a year, the minister says. The increase follows a larger boost of 10% introduced last year.  
The increase is in line with the Labour Party’s electoral manifesto, which promised students a 15% increase over the course of this legislature.

 

7.28pm We’re onto a section in which Caruana is presenting a series of benefits focused on those with a disability. 
There are too many different ones – and he is reading too fast -for us to list them all here -  but they range from tax credits for therapy sessions, to a €4.2m programme to introduce personal assistants for people with a disability, to subsidies to buy cars equipped for wheelchair users. 
Carers will also get social security payment credits and the law will be changed to make it easier for cohabiting couples in which one person has a disability to have the other registered as a carer. 

 

7.28pm We’re onto a section in which Caruana is presenting a series of benefits focused on those with a disability
There are too many different ones – and he is reading too fast -for us to list them all here -  but they range from tax credits for therapy sessions, to a €4.2m programme to introduce personal assistants for people with a disability, to subsidies to buy cars equipped for wheelchair users. 
Carers will also get social security payment credits and the law will be changed to make it easier for cohabiting couples in which one person has a disability to have the other registered as a carer. 

 

7.27pm There’s a massive increase in grants for parents who quit work to look after their disabled children
Rather than the €500 yearly grant they received this year, they will now receive €4,500 a year, divided into four payments. 
The PL has promised to increase the grant to half the minimum wage, Caruana notes. 

 

7.25pm Last year, Caruana announced plans to give school principals €10,000 a year to allocate to children from financially challenged families. The grant came into effect some months ago. 
Now he says that the grant will be modified: schools in larger catchment areas, or in lower-income areas, will receive more. 

 

7.24pm Allowances for fostering will from now on be tapered to end gradually, rather than abruptly the moment the fostering takes place. 
And there will also be a benefit for coeliac patients, equivalent to €20

 

7.23pm Children’s allowance is to rise by €90 per child. The Labour Party had made such increases part of its electoral manifesto. 
Caruana says this year’s increase will cost taxpayers €5.6 million and impact 41,000 families. 

 

7.22pm The government continues its age-old tradition of allocating millions to fix ‘injustices’ workers in state entities suffered in the past.
This time round, it’s allocating €10 million in total to that end. 
Caruana boasts that the government will have forked out €83.5 million for such purposes between 2017 and 2023. 

 

7.20pm Retirees who do not qualify for a contributory pension are to receive an additional €50 a year.
Those with fewer than five years’ worth of contributions will receive €450 a year.
Those with between five and 10 years’ worth of contributions will get €550

 

7.19pm Anyone aged 18-30 who misses up to two years of work due to a mental-health-related issue is to get those social security payments covered by the state.
Applicants will need to prove that they received psychiatric care during that time. 

 

7.17pm The non-taxable ceiling on pensions is to rise to reflect the increase in pensions, Carauana said. It will now stand at €14,968.
And 56,000 additional pensioners are to receive cost of living bonuses that reach up to €1.50 a week this year. This is a continuation of a measure announced last year.
Service pensions are to get €200 added to their social security exemption capping. It will now stand at €3,266 a year.
Pensions for widows and widowers will continue to creep upwards to match that of their deceased spouse. Increases will reach up to €3.54 a week. 

 

7.13pm A new mechanism intended to help low-income people cope with the rising cost of living will, Caruana says, see 80,000 such people receive a cheque at home.
The average grant will be of €300, he says, and grants will be means-based. 
Caruana said eligible people will receive a cheque in the post “before this Christmas”. 
This measure will cost around €10 million. 
Caruana had first announced this mechanism well over a year ago, and there was some expectation that it would be announced during last year’s budget. Negotiations with social partners pushed that forward, though, to this year’s event. 

 

7.12pm Pensioners are to get a €12.50-a-week increase, equivalent to €650 a year. It’s the eighth year in a row that pensions have increased, Caruana tells MPs. 
That’s a huge weekly increase, but remember that it includes the record COLA increase triggered by record levels of inflation. 
The increase will cost around €65 million to finance, given that there are around 100,000 eligible pensioners.

 

7.10pm As Times of Malta had exclusively revealed back in August, this year’s Cost-of-Living-Adjustment will be of €9.90.
The COLA, which is paid to all workers, is automatically calculated based on inflation and cost of living indicators. 

 

7.02pm Caruana confirms that subsidising energy and cereals will cost around €600 million next year. That's €70,000 an hour and around 10% of all government's recurrent expenditure, the minister says. 
Keep in mind, however, that the €600 million figure is just an estimate. It might end up costing more if energy prices rise further, or less if they drop to more moderate levels.

 

6.52pm Caruana is still speaking about the thinking behind the government's push to cushion energy prices. 
Had energy prices not been subsidised, Caruana tells MPs, bills would have shot up by 130%
“For every €100 owed, people would have had to pay around €230,” he says.

 

6.43pm As is tradition, the first part of the speech sets the scene. Caruana speaks about the global challenges the country faces, the war in Ukraine and rising prices. 
“The last time energy prices were raised in this country, the economy collapsed,” he says. 
The minister recalls how Enemalta had, at the time, raised an additional €100 million by raising tariffs. 
"Today, we are absorbing a hit six times bigger, and we're not asking people for a single euro," he says. 
The minister has effectively confirmed that subsidising energy prices will suck around €600m out of government coffers next year. 

 

6.34pm The Finance Minister has handed the president’s message to Speaker Anglu Farrugia, who now reads it out. It marks the start of today’s budget event.
Caruana then presents the budget 2023 motion, which is seconded by Byron Camilleri. 
And now the finance minister can begin his speech. 

 

6.15pm The finance minister unveiled a new budget briefcase today, breaking from the traditional black one used in previous years. 
Here's more about this flashy new addition to the annual budget speech - it looks like Caruana may have spent a pretty penny on it. 
Read: Malta nods to British past with pillar-box red budget briefcase

 

6.10pm Good evening and welcome to this year’s budget blog. We’ll be takin g you through the Budget 2023 speech – and its key measures, of course – as Finance Minister Clyde Caruana unveils them. 

 

Image
Image
Image
Image
Image
Image
Image
Image
Image
© Copyright 2022 MALTESE ITALIAN CHAMBER OF COMMERCE. All Rights Reserved.