Budget 2023 Supplement

Pri ritisi g educati a d sp rt

society’s well-being.

Overall, this budget focused on the immediate but also the longterm needs of our children, bettering their work prospects and their future.

This legislature is prioritising its Investment in education, as this is a basic need for a society to thrive and work towards Malta’s economic vision - in the long run, education leads us to a strong economy.

The budget for 2023 sees a vote of €846 million being directly invested in our children and educators, reflecting a Government who is committed to continue improving our educators’ profession, in addition to giving our children the best possible in their education journey, hand in hand with all the right opportunities, whilst continuing with research and innovation programmes.

teaching profession.

Whilst improving our education strategies is an ongoing commitment, this budget also focuses on investing in the education environment, with the continuation of ongoing projects and new ones on the cards.

with the unprecedented investment in the sport sector.

Education is a main pillar for economic growth, whilst sport and physical activity is a main ingredient for

Come January 2023, we will see the start of diligent discussions and negotiations, leading to a new agreement by which all educators will benefit from work conditions, and better pay. This will build on the present agreement which had already drastically enhanced the

Highlights of this Budget are the increase in the allocation of financial help for vulnerable students, a €10 million vote dedicated to training programmes, Improved scholarship programmes and tax credits for students. New laptops for all Year 7 students and the extension of the one-tablet-perchild scheme reflect our policy that digital technology is a must if we want our children to be prepared for the needs of the ever-changing needs of the employment sector.

This budget also continues

We are committing ourselves to build and finish the National Motorsport Centre in Ħal Far in this legislature, as well as finalising the first indoor pool in the South of Malta, in Bormla and the sports facilities earmarked for the Maria Assunta School.

Parents have applauded the increase in tax rebate, benefitting those who pay for their children to practice sport –an increase from €100 to €300 annually. The importance of physical activity is also an important measure announced in this budget, with more physical lessons in schools, as we are working to Increase the time and the establishment of a minimum number of Physical Education lessons in schools.

With the Small States Games practically on the doorstep, €9million have been allocated as an investment in the upgrading of the Marsa Sport Complex to an international level sports hub. €1 million is also being allocated to kickstart the necessary preparations to successfully host the Games of the Small States 2023. This budget also sees to the continuation of the preparations at hand to host the UEFA Under-19 European Championship 2023.

All these works will see better sport facilities to be enjoyed not only by our dedicated athletes and sport aficionados, but also the public in general.

A healthy society is a society which gives priority to its wellbeing. With education and sport on the top list as priorities, we are working hard and with determination to achieve results. As the Minister responsible, I again pledge my commitment to see that these sectors are given their due priority to benefit all, including our future generations.

Dr Clifton Grima is Minister for Education, Sport, Youth, Research, and Innovation

Putti g ur be iefs i t practice

The budget for 2023 presented in the beginning of the week, epitomises this nature of the Labour Party and its economic and social plan whilst in government.

STEFAN ZRINZO AZZOPARDI

This budget comes at a time when the proverbial clouds on the global economic landscape cannot get gloomier. When prices have soared. When the news is unfortunately dominated by war on our doorstep and instability all around. People elsewhere are aggrieved because their governments are simply out of touch.

We opted for different policies when compared to our European partners. For a series of budgets in the past two years, including the mini-budgets midway through the covid outbreak, this government has developed what may be called a trickle-up doctrine. Departing from the traditional centrist idea of enabling the wealthiest in society to generate heaps of wealth from which others may reap benefit mainly through employment, the government focused on shoring up the most vulnerable categories in Maltese society, and we did this repeatedly. This method prevents people from falling into a poverty trap which in turn creates even heftier burdens on us all.

In general, keeping a wider pool of people and households in a state where they can

participate in and contribute to the economy, is what fuels the economy, keeps it going and generates wealth and growth. It is this same growth which maintains demand for goods and services, and which as a result maintains (high rates of employment which then ultimately enables more former welfare beneficiaries to emancipate from the need of State assistance. When we pledge a budget with a social purpose, we mean it.

The major social intervention in this budget is the State’s absorption of the hikes in energy prices. This is maintaining households’ purchasing power in a wider context of pressure on prices in many a sector. Given that the State’s subsidies on energy prices is also impacting businesses, this limiting exorbitant costs for such businesses which would otherwise be relayed onto customers and ultimately safeguarding jobs.

Over and above the cost of living adjustment which is close to €10, and which would have otherwise soared to more than a double in the absence of the government’s energy subsidies, 80,000 low income families will be receiving an additional input to make sure they live adequately in the current economic climate.

We have once again taken a clear decision to assist

personsattempting to purchase their first home. The decisive intervention through the €10,000 grant to all first time buyers spanning for the first 10 years in their loan repayment, will alleviate a considerable burden from these young families who take such a hefty financial step.

Significant impact in cetrain people’s lives may be made not merely through financial measures but especially through improved care, most importantly medical care. The funding for an oncology clinic in primary healthcare makes treatment much more accessible to cancer patients as do chemotherapy pumps to be

used at home. The budget went far beyond lipservice to mental health. In fact adults of working age who spend time out of work due to mental health challenges at some point of their lives will start to be given credits for up to two years to cover the lost social security contributions. In the detail and speficity of such a measure one may find the core of the social fabric out of which this budget was born.

Various other initiatives have been announced aimed at weathering the economic storm. We firmly believe that our economic policies should be devised in order to facilitate growth as a means to our main aim – social justice. We have stood firm in our stance not to introduce new taxes while ensuring that our finances are sustainable.

Notwithstanding the context within which it coincides, this budget is another testament to the Labour Government’s economic and political plan which has people and their decent living conditions at its core. The model built on sustainable growth worked in good times and has seen us sail through different storms and remains the best tool in the shed to keep on delivering adequate living standards to all households.

Stefan Zrinzo Azzopardi is the Minister for Public Works & Planning

We fir y be ieve that ur ec ic p icies sh u d be devised i rder t faci itate gr wth as a ea s t ur ai ai – s cia ustice We have st d fir i ur sta ce t t i tr duce ew taxes whi e e suri g that ur fi a ces are sustai ab e

Whi st i pr vi g ur educati strategies is a g i g c it e t this budget a s f cuses i vesti g i the educati e vir e t with the c ti uati f g i g pr ects a d ew es the cards

The Government has confirmed its commitment towards the education and sport sectors through the budget presented last Monday in Parliament

The Labour Party is a progressive political organisation founded on social democratic principles, striving for an inclusive society which provides employment for everyone, ensures social justice, and whose state is measured by the progress of its most vulnerable members

CLIFTON GRIMA

The only way to renew ourselves as a nation is to make sure that the youths that are on their way up in society can dream of building their future here, among us, in this country.

While it is true that the desire to become a homeowner has its socio-cultural roots in specific circumstances that arose in the past couple of decades, it cannot nonetheless be denied that in Malta this desire to own our own residence remains very much alive and kicking. One can understand this desire since it represents the step which

eepi g ur fr t i ers at the f refr t

Tor yet another year, it is focusing on people’s quality of life, whilst also targeting specific pockets of our society including pensioners, students, and people with disabilities.

Amongst such targets, this budget consolidated the progress being achieved by our disciplined forces and their employees.

The Labour Government invested heavily in the human resources of the disciplined forces. In solving many of the injustices and compensating the officers for the work they did but never paid for, the Government also managed to achieve an unprecedent set of collective agreements that enhanced the conditions of work, with better salaries and conditions of work, to the officers of the disciplined forces. This budget is sustaining and building on such improvements.

Apart from all the capital investments within the

disciplined forces, next year’s budget is providing new incentives and level of protection that were never provided before. The

Government is introducing a 23% increase in pension to all the officers that work an additional 4 years after completing their 25 years of service. This is an important decision by which the hard workers of the disciplined forces will be appreciated for their extra years of devoted service. Through this incentive, there will be a smoother transition of talent and expertise between the experienced officers with others that will be considered as new to the service.

Another crucial measure is the introduction of a 5-year pension to the widows of the in service employees. Up till today, if a member of a disciplined force dies, his or her widow, does not benefit of any service pension. This measure shall provide

more of peace of mind to our disciplined forces, and their loved ones.

Community Policing service is currently provided in 76% of our localities. The introduction of this service led to positive results in various localities, whilst also contributing the recent spike in trust in the Malta Police Force. Our commitment is that this service

The b st y uths eed

provides the greatest stability and certainty in the long-term to whoever embarks upon it. Despite our best efforts in these past couple of years to regulate and financially incentivise players to create the conditions for a stable rental market, which does not intimidate people who turn towards it, the main aim of Maltese families and young individuals remains that of acquiring their own property and becoming owners.

Therefore, the affordability of the property sector is one of the main pillars, together with other essential matters, that will make or break the dream of future generations of building their future in this country.

Government has acknowledged this sentiment for a long time. It is a feeling that we’ve gauged throughout this past decade as the property market fast became one of the sectors which witnessed the sharpest increases in prices; a hike which was linked directly to the unprecedented growth in our economy.

Our challenge remains that of balancing the need of keeping the investment flowing in the property sector since it is a vital component of our economic machinery and at the same time ensuring that substantial parts of this market remain accessible to those who are trying to enter the market for the first time –the so-called “first-time buyers” cohort.

I’ve wasted no time since the commencement of my new

tenure as Minister for Social and Affordable Accommodation to make it crystal clear that the main challenge ahead of us shall be of tackling the affordability of housing. Our intentions were made even clearer when we immediately started a wideranging consultation exercise that involved youths at the forefront of the discussion. We also had lengthy talks with commercial banks that have a central position in the property market since they finance most purchases through loan facilities available to private clients.

This process led us to announce a very strong measure in this legislature’s first Budget, a measure which shall impact virtually all first-time buyers. This measure shall alleviate a significant portion of the burden carried by individuals and young families, who have just started their independent lives and have finally succeeded in purchasing their first residential property after many months of sacrifice. Through this measure, government shall grant the sum of €10,000 to every first-time buyer in the first 10 years of the loan repayment period undertaken with the commercial bank of their choice. As promised in the electoral manifesto, this measure shall be open to all those who have finalised the purchase of their first property from the beginning of the calendar year 2022 onwards.

This measure truly represents the boost that youths need to

make the next step.

When one considers the fact that we have thousands of firsttime buyers every year, one may appreciate that this substantial measure shall represent a significant financial outlay on the part of the government. It is also testimony to the government’s willingness to listen and understand the sentiment of future generations in respect to these challenges and its commitment to make available any and all instruments at its disposal to youths, so they may be able to transform their dream of growing and building their future in Malta, into a viable reality.

Announcing new measures is a positive thing, but it’s even better when an existing measure is followed up, adapted and optimised according to the needs of the day. That is what we’ve done with the 10% Deposit Payment scheme, which is also open to first-time buyers and which is now being strengthened through an extension which shall cover up to a maximum property value of €225,000 – an improvement of €50,000 from the scheme as announced in 2020 and which has already helped hundreds of young persons to become homeowners.

We did not limit ourselves to the purchase of property, but in line with our belief that the housing sector is a diverse and heterogenous policy area, we have also intervened in the rental market, and we have also

shall be available across the whole country by the end of the year 2023.

The unprecedent investment in the disciplined forces shows our commitment to the security of the country, and those who work hard to make Malta safe, every day. Moreover, we are investing more than €13million in equipment and projects at the Armed Forces, €8million in the Civil Protection, €3million at the Correctional Services Agency and another €5million in the Police Force, excluding EU Funded projects.

The reforms and investment in our disciplined forces during the past years, led to better employee conditions, better equipment and a better service. This budget proves once again, the Government’s commitment towards a more secure Malta and Gozo.

Byron Camilleri is Minister for Home Affairs, Security, Reforms and Equality

been pro-active in this sense during this year’s budget. In fact, this budget strengthened the private rent housing benefit scheme. This benefit, which takes into consideration the income of a family unit and what it is actually spending on rent, has been strengthened to respond to the most recent developments in the local rental market, developments which we can now gauge with more precision than ever through the rental price indexes which we are measuring in real-time.

One must therefore recapitulate that these measures will continue to strengthen the social programme which the Housing Authority has undertaken since existing affordability measures, as well as adaptation and regeneration schemes shall continue to operate and shall be sustained accordingly.

In the current global climate, rife with economic and social uncertainty, this Budget has once again shown that government is in tune with the people’s sentiments and preoccupations and that it wastes no time in acting in a decisive and effective manner. In the housing sector, we have once again intervened strongly to make sure that everyone has an adequate and affordable array of choices to suit his or her housing needs.

Roderick Galdes is Minister for Social and Affordable

RODERICK GALDES

The last time I addressed Parliament a few days ago, I reiterated that the principal aim of politics should be to create a country where the future generations’ aspirations may be met

Next year’s budget ensures stability and certainty, during uncertain and instable times currently being experienced at a global level, nonetheless throughout various member states of the European Union

Apart fr a the capita i vest e ts withi the discip i ed f rces ext year’s budget is pr vidi g ew i ce tives a d eve f pr tecti that were ever pr vided bef re

The certai ty f stabi ity

the Russian war on Ukraine, the spiralling inflation and exorbitant energy prices have left many unable to cope with their daily expenses.

These are three key principles that guide us as a government in the drafting of the annual budget, particularly in such unprecedented times, as we pave the way for another year that seeks to support families, give businesses a boost and guide the country to new and improved developments in different sectors.

Budget 2023 has kept this promise: the promise of a government that offers stability and stands by its citizens as it delivers a progressive and socially just programme during trying international times. It is hard not to analyse the Budget without taking into consideration what’s happening in Europe and the rest of the world. The toll left by the pandemic, the shocks sent by

The main difference between ‘them’ and ‘us’ lies in one fundamental decision: that of a government that has refused to transfer the burden of increased energy and cereal prices onto consumers and businesses. It is not some magic formula; but an economic direction of a Socialist Government that refuses to adopt measures of austerity and instead pushes in favour of space for growth. To put things into perspective: had we decided to follow the path of 2008, and transfer the prices of energy onto consumers, the burden would have been heavy. A utility bill that amounts to €100, would today amount to circa €230. A business that pays €500 in utility bills, would end up footing an approximate €1,200 bill.

The perseverance of the past years, good management and a progressive energy policy are chief amongst the reasons that have allowed us to absorb these costs, whilst allowing us the flexibility to source our energy at the points that benefit our country the most. It also required us to ensure strong, determined negotiations with the European Commission, allowing us to derogate from

mandatory and gas use reduction – which would have otherwise been catastrophic for our enterprises and industries. In turn, whilst this Government will be saving citizens €600 million in fuel, electricity and gas prices, we will continues pushing and encouraging energy efficiency and energy saving measures. Because whilst we want people to be comfortable, responsibility is equally important.

Budget 2023 continues to allocate schemes and incentives for households and businesses to invest in renewable energy

and energy efficient measures. It also incentives businesses to further invest in efficient operations, at the same time opening up opportunities in green careers. Achieving a climate-neutral economy is not only beneficial for the profit margins of a company, but it holds environmental benefits whilst creating new and niche job opportunities.

This legislature’s first Budget also delivers a clear commitment on one of the Labour Party’s main electoral measures: the implementation of the €700 million green promise, which seeks to deliver greener spaces, reclaim urban land and provide a better green environment overall. This will be delivered through the setting up of an agency that will be specifically focused on delivering several projects.

Protecting our green also

Stabi ity thr ugh pr activity

Budget 2023 provides stability and peace of mind, a rarity within the present global climate.

This year’s budget has also shown our aspiration to maintain and modernise the fisheries and animal welfare sectors by building on efforts already underway in both areas.

It also recognises the importance of increased efforts in achieving a more sustainable economy, thus improving our collective quality of life. In this light, Government has taken upon itself the task to promote these two industries as viable opportunities for employment and personal growth, while ensuring the proper environmental and financial safeguards remain in place for the benefit of present and future generations.

During the past few months, we have worked hard to lay the groundwork for what is to come. The preliminary plans for a new Animal Rehoming Centre, which will address a need long felt by our community, have now been concluded. In parallel, the imminent publication of a new National Animal Welfare

Strategy will be guiding our work in the sector in a comprehensive, mainstreamed manner.

Through the Animal Welfare Fund, which has been reconfirmed for 2023, we will keep supporting various infrastructural projects associated with our animal shelters, as well as the day-today operations of several voluntary organizations.

The microchipping of the local cat population is also set to continue, an initiative which allows the Department of Animal Welfare to keep better track of the overall population and health of our feline friends.

A new initiative included in this year’s budget homes in on

the importance of attracting new blood into the fishing sector. We aim to cultivate the transfer of knowledge from one generation to the next, while strengthening the educational programs already in place.

We are also intent on digitising the industry. Government is allocating considerable resources to ensure a digital ecosystem for our fishers, which will leave a beneficial impact on how this industry, and the relative Government agencies, interact and sustain each other’s efforts. This is complemented by our substantial investment in the tangible fishing infrastructure; from the recent installation of new water and utility pillars to

requires us a country to deliver on waste management. It is no doubt a challenge that was left unattended for far too long. A challenge we have to address sooner rather than later. We have taken the bold step of introducing new gate fees as of 1st January 2023 – an ambitious decision, with a staggered approach, that will benefit the environment and incentivise those operators who choose to separate their waste accordingly. Thanks to WasteServ, we are taking waste management to the next level, investing heavily in the appropriate setups and allowing us to turn waste into an energy resource. We want to transform today’s stark reality –where 90% of waste ends up in landfills – to just 10% in the years to come.

Improved environment, a better quality of life, affordable energy prices, job opportunities and space for economic growth can only be delivered if the government creates the right economic environment that allows its domestic markets to grow and develop sustainably, whilst attracting quality foreign investments. A Budget of certainty and stability, which measures will surely not disappoint.

Miriam Dalli is Minister for Environment, Energy and Enterprise

the maintenance of key winch rooms, as well as the opening of a new Aquaculture Lab in Marsaxlokk, which will all help in providing a multi-faceted support to our fishermen throughout the year.

Government also recognises the importance of engaging continuously with the Maltese consumer. I am convinced that there should be greater awareness of the sustainability and nutritional value which are to be gained from eating local, which is why we will be introducing a new information campaign on the wide variety of foods and products which originate from our seas.

Despite the many economic environmental and political challenges posed by today’s global perspective, Budget 2023 provides a welcome sign of fiscal health and sustainability. I am more confident than ever that we will meet the expectations of local communities and secure a brighter future for all.

Alicia Bugeja Said is Parliamentary Secretary for Fisheries, Aquaculture and Animal

ALICIA BUGEJA SAID

The budget document presented by Finance Minister Clyde Caruana earlier this week sends a clear signal as to Government’s determination to acknowledge our financial realities, while reflecting society’s aspirations

We are a s i te t digitisi g the i dustry G ver e t is a cati g c siderab e res urces t e sure a digita ec syste f r ur fishers which wi eave a be eficia i pact h w this i dustry a d the re ative G ver e t age cies i teract a d sustai each ther’s eff rts

tecti g ur gree a s requires us a c u try t de iver waste a age e t

F d security is f strategic i p rta ce

went to assist farmers to purchase fertilisers, pesticides, and animal feed . The price of fuel for fishermen too is being subsidised as without it the survival of our fishing sector will be jeopardised.

The Common Agricultural Policy is of fundamental importance in the European Union. This year my Ministry finalised its Strategic Plan 20232027 under the CAP. This guarantees that Malta will receive €191 million (an increase of 38%) to support our efforts in this field. In 2022 the Ministry for Agriculture, Fisheries and Animal Rights has been very active so as to ensure that the various EU financed projects, including the National Gene Bank at the Plant Biotechnology Centre and the AgriHub project at Ghammieri, are implemented in time and on budget.

The AgriHub is serving as a research centre and is expected to issue guidelines on growing produce in a more sustainable manner in the coming weeks.

the amount of fertiliser required to grow their produce as well as for improved testing and analysis of animal products intended for human consumption.

Improved and extended IT services are driving many of the activities of the Animal Health and Welfare Department, by introducing concepts relating to such apps as MyFarm and MyPet. These electronic developments include the introduction of an online payment system, a national information system on animal health, food and feed system, improvements to the rapid alert enabling veterinaries and the general public to raise alerts re animal diseases, the registration of newly born calves and the transfer of animals from one farm to another, information management relating to electronic veterinary certificates as well as veterinary laboratory analysis which will enable faster processing of samples and issuing of results.

made in the purchase of monitoring equipment and the installation of service pillars in various local harbours for the use of fishermen.

At the ‘Pixkerija’, the Malta Food Agency has introduced various administrative changes to be better able to meet the needs of fishermen.

This Agency has also embarked on the reform of the ‘Pitkalija’ and introduced various measures, such as the electronic provision of additional information to farmers, to enhance transparency. Plans are in hand to build a new ‘Pitkalija’ and a new Farmers’ Market which will have all the necessary amenities.

The Public Abattoir has made significant investment to improve its operational efficiency. It has doubled its freezer capacity, which has made it possible for pig breeders to benefit from the EU’s ‘private storage aid’. An agreement with the University of Ghent, recently signed, will enable the Abattoir to train various personnel to be able to better classify beef and pork according to the best practices within with EU regulations.

This year the Abattoir will also secure deboning and cutting equipment which will further improve the quality of local meat products.

During the AGRIFAIR held last May, The Animal Health and Welfare Department launched a consultation document which was the first step in our country having a National Animal Welfare Strategy. Tender documents for the formulation of this National Strategy are at an advanced stage.

This Department also formulated legislation relating to amendments to the Veterinary Services Act (Cap 437) and the Animal Welfare Act (Cap 439).

working on the Fisheries Conservation and Management Act (Chapter), new regulations under the Animal Welfare Act (chapter 439) which has already come into force and a Legal Notice relating to the Agriculture Consultative Committee. The latter has the aim of seeking to make the committee more inclusive of the various stakeholders in the sector and to further encourage their participation and contribution towards the development of agriculture in Malta.

One of the most important milestones that we have embarked on as a government within the agricultural sector, are the amendments to the ‘Lease Renewal Act (chapter 199) and the need for reform in the acquisition and ownership of farmland so as to ensure that agricultural land is used for this purpose. This reform was launched earlier this month and is key to guaranteeing the sustainability of agriculture and food production, as well as the protection of the rural environment. Whenever there are issues in this area, these not only affect farmers but also have a strong impact on the supply and security of food and the quality of the environment that can be enjoyed by society. When the acquisition and possession of land are not controlled, there is a risk of farmers losing agricultural land, to the detriment of their livelihood, as well as to the country’s ability to produce food and safeguard the rural environment.

This commitment has been strengthened over the last two years as the world struggles to cope with the challenges arising out of Covid-19 and the war in Ukraine.

Food security is of strategic importance and our government has had to intervene to protect farmers and fishermen, while ensuring that the Maltese consumer continues to enjoy fresh food at reasonable prices.

Due to the extraordinary events of these last two years the EU has launched the Agricultural Crisis Reserve and set new temporary guidelines governing State Aid giving Member States greater flexibility to intervene under the Rural Development Programme.

Our government did not rely only on the financial assistance coming from the EU, and this year 5,000 farmers benefitted from €4 million financed through national funds to lessen the impact of Covid-19. A further €3 million

More emphasis will be given to more efficient use of agricultural land and organic farming. A

National Register of Traditional Agro-Food Products of Malta will be developed so as to promote their local production.

Soil sensors and smart traps network around the Maltese Islands are providing greater information that is essential for preventing the spread of plant diseases, and farmers will be informed through AGRICONNECT how best to control such diseases.

Information technology is fundamental to the modernisation drive being pushed by the Ministry. Significant improvements are being made to the IACS, the main electronic system at the Agriculture and Rural Payments Agency. An application for mobiles will enable farmers to apply for more services through their phone. New software will enable farmers to better estimate

Regarding the Fishing industry, Malta’s efforts in EU fora during 2022 focused on the difficulties being faced by local fisherman due to the illegal operations of fishermen from non-EU Mediterranean countries, especially during the ‘lampuki’ season. In August a pilot project was launched by the European Fisheries Control Agency, whereby its vessel ‘Lundy Sentinel’ made inspections in the Strait of Sicily.

The fisheries mobile application has been extended to cover the ‘lampuki’ season and is now also available for amateur fishermen. It is our intention to give a tablet to every fishing vessel so as to facilitate digital reporting. We have also introduced additional IT services for fish farmers. An online dashboard will simplify processes for fish farm operators to digitally access the website containing their profile and enabling them to make online payments.

Significant investment has been

Sites have been identified and plans are being prepared for the construction of a new Veterinary Laboratory, ‘Meet and Greet’ locations for pets and animal adoptions and areas for the training and exercise of dogs. Studies are in hand regarding the opening of modern ‘rehoming centres’ for the adoption of animals, including stray ones.

Our agriculture and fisheries are only as good as the people who work in these sectors. This year we launched a scheme offering extended training to young farmers.

My Ministry is conscious of the social importance of the sectors under its responsibility and their contribution to the Maltese ecosystem. It is also sensitive to assist in preserving the local heritage as evidenced by the Abattoir’s restoration of the Water Tower and the Victorian entrance to Marsa as part of the cultural initiatives associated with its being the Maltese City of Culture. We have also restored the more than 400-year old reservoirs and surrounding walls of the Plant Biotechnology Centre in Lija.

It is of extreme importance for us to have a strong, modern legal framework governing the sectors falling under the remit of MAFA. In this regard we have been

Achieving the goals that we envisage requires a reform that is based on a long-term vision and offers direction to the necessary action, and that is motivated by reasons which are in the interest of the general public, and involves farmers. This is why this White Paper brings together a set of proposals designed to address issues that may bring about the loss of crops, thus creating a legal framework and control systems that safeguard the social rights of all stakeholders, food safety, and environmental protection. The public has been invited to submit comments on the White Paper during the consultation period which ends on the 8th of November 2022.

A major event held in the month of May by the Ministry was the Malta AgriFair. The Malta AgriFair 2022 shone a well-deserved spotlight on local produce, machinery, systems, and technological developments in the agricultural and fisheries sectors. Over 30,000 people visited the MFCC grounds over the weekend to experience this one of a kind event.

We will be doing more to ensure that these sectors have the necessary human resources by ensuring that our agricultural and fisheries community enjoy an adequate standard of living by supplying fresh quality products appreciated by Maltese and visiting consumers alike.

Anton Refalo is Minister for Agriculture, Fisheries and

The Labour Government is committed to restructure and modernise the agriculture and fisheries sectors in Malta to ensure their competitiveness and sustainability

Certai ty a d stabi ity – the way f rward

JULIA FARRUGIA PORTELLI

what is a Budget for the future of a nation that while it has gone through a pandemic and continues to feel the impact from the Russian invasion of Ukraine and the subsequent energy crisis, it is still looking ahead in a significant state of economic readiness. We’re not saying it, established European and international institutions and agencies are.

They do so with a keen sense of positivity, fully aware there are no new taxes, no new burdens and no hidden traps in

Based on the credible platform of certainty and stability, the Budget reaps all that has been garnered in the past few years to make sure the resulting harvest serves as a springboard to better things and better opportunities. This “only way up” does not concern the general populace only, but also several niches and communities in our society – from persons with disabilities and the vulnerable among us to hardworking voluntary organisations and consumers –that deserve even bigger attention if we truly seek to make sure our economic success is reflected on their special needs and aspirations.

The Budget provides a momentous upgrade, for example, in grants and allowances to persons with disabilities, their parents and guardians. Persons who serve as carers to disabled children will get a grant increase from €500 to €4,500 annually, while €4.2 million have been earmarked to provide personal assistance to disabled persons. An annual €200 tax credit for every disabled child in the family is included, plus a 20% subsidy for the purchase of new vehicles or second-hand ones for wheelchair-bound persons; and a 10% subsidy for the purchase of modified second-hand cars that provide better access and independence to the person with a disability.

It doesn’t stop there, of course. I am happy to confirm two major banks will be joining the New Hope Guarantee scheme and we are negotiating with other prospective participants. Another milestone is the elimination of the old abhorrent means test for persons with disabilities. Those who suffer

from the coeliac condition will get an increase of €20 to the €45 monthly they already get. Add to these the provision of medicnes to persons suffering from multiple sclerosis, the centralisation of all CDAU and CYPS services in one state-ofthe-art centre, and a massive increase from €9.90 weekly to €174.80 weekly for persons suffering from Severe Disability.

Other striking increases announced in the Budget for next year cover cases of Severe Disability Assistance (from €6.60 to €116.12 weekly) and Disability Assistance (from €6.60 to €90.59 weekly).

Two other fields in my Ministry’s portfolio, voluntary organisations and consumer affairs, are not consigned to the sideline. The Voluntary sector will continue to find support and improved sundry services within the established one-stopshop, while the Consumer sector will not only see the further strengthening of consumer rights but, as promised in the Electoral Manifesto of just eight months ago, the maximum

amount that can be claimed is being increased to €5,000.

These proposals are the fruit borne out of much dedicated work carried out in collaboration with all stakeholders in the disability, voluntary and consumer sectors. They certainly form an impressive list which indicates a better future beckoning for the most vulnerable in Maltese and Gozitan society. Electoral promises and commitments are being realised at an unwavering rate and at a time when others are freezing theirs.

The principles of justice, fairness and equality epitomise these Budget proposals as Malta and the Maltese look forward to an even better future. This sense of positivity is the culmination of sheer hard work, kept promises and a strong and convincing economic policy in which the word austerity does not feature.

Julia Farrugia Portelli is Minsiter for Inclusion, Voluntary Organisations And Consumer Rights

€2.3

The

National

– VAT

The VAT rate remains at 18%, but the government is estimating an increase in income of €151 million from VAT in 2023 when compared to what it will receive by the end of this year.

€570 million – Non-tax revenue

Non-tax revenue will yield €57 million more. The bulk of this is in EU grants, which will amount to nearly €300 million

€384 million – Licences and fines

Licences, document duties and fines are set to hand the government €384 million, which is €18 million more than it will pocket by the end of this year €325 million – Customs and excise

Income from customs and excise duty will increase by €8 million in 2023.

€1.9 billion – Social policy

Retirement pensions will cost the government €754 million in 2023, €63 million more than in 2022.

Children’s allowance payments will reach €49 million, €4.5 million more.

€930 million - Health

Covid-19 supplies will cost €10 million less in 2023, but the Pharmacy of Your Choice budget will go up by €7 million to €20.5 million. Concession agreements with Steward Healthcare for the running of the Gozo and Karin Grech hospitals will amount to nearly €80 million.

€922 million – Capital investment

A third of the expenditure will come from EU funds, with investment in roads set to reach €90 million in 2023. The first €100 million of the €700 million the government is pledging for urban greening areas are set to be spent.

€830 million – Environment and energy

Energy support measures will cost €580 million next year as the government subsidises the cost of electricity and fuel.

€764 million – Education

The University of Malta will get €91 million, MCAST €41 million and the Junior College €11 million. Church schools will get a subsidy of €112 million.

€409 million – Finance

The free child care scheme will cost €36 million, €5 million more than in 2022. The FIAU has been allocated €11.5 million, €600,000 more than this year, while the MFSA will get €500,000 less than it did in 2022.

Economic planners around the world are dealing with multiple shocks emanating from the aftermath of the pandemic which was compounded by the energy crisis. Supply-side bottlenecks, disruptions in the transportation sector and increases in the price of energy products, particularly following Russia’s invasion of Ukraine, led to widespread inflationary pressures that we had not witnessed for a generation or more.

In a context where the short term becomes complex to manage, one should not lose sight of the big changes in the horizon in the form of the digital and green transition. Indeed, sustainability is more than ever on the agenda of policymakers, regulators, and also economic operators. It is against this context that Budget for 2023 needs to be framed. Our Government took bold steps to shield households and economic operators from the increases in energy prices, clearly at a fiscal cost. Nevertheless, this has not lessened our ambition to contribute to the transformation of the country through the enactment of policies and the timely implementation of

Certai ty a d stabi ity tra sp rt a d i frastructure as e ab ers f sustai ab e deve p e t

projects that improve the citizen’s quality of life. In that regard, the Budget for 2023 will build on the gains of recent years while sowing the seeds to futureproof the country in transportation, the development of infrastructure, and the implementation of capital projects.

The considerable improvement in the country’s infrastructural stock in recent years is a reflection of an important legacy that needs to be sustained and improved. Projects that have made a significant impact on the Maltese road infrastructure, among many, are certainly the Central Link Project and the Marsa Junction Project, which were successfully completed by Infrastructure Malta. The measures in this year’s Budget will continue to enhance the country’s infrastructure, road networks and other capital projects to the tune of approximately €100m worth of investment. We have identified and prioritized various projects which are of an infrastructural nature, such as Kirkop, Luqa Junction, and Imrieħel Bypass, that will successfully be inaugurated for public use in the coming months. The most recent investment mentioned in this years budget is that of €18 million which will be able to fund the Imsida Creek Project. Furthermore, projects shall be carried out also in the maritime

infrastructure, particularly the extension and works at Lascaris Wharf and Pinto Wharf as well as the ship-to-shore project, which will contribute to reduce emissions in our ports and surrounding areas.

Infrastructure Malta, which plays an integral role in enhancing this Ministry’s portfolio, bases its strategy around four main pillars: quality, security, sustainability and accountability. Furthermore, IM is strengthening consultation with stakeholders and its coordination as an integral element in the management of projects. Last but not least, IM is committed to enhance the road network in the country with a view to reduce traffic congestion and emissions.

Connectivity is crucial for the economic development of the country and transportation, in its various forms, plays a critical role in that regard. Combating congestion remains a priority for Government. In that regard, a number of measures are being considered including strengthening the enforcement arm, consultation on the delivery of specific services during the morning rush hour as well as investing in technological tools.

Transport Malta will continue to implement more measures that focus mainly on improving daily commuting, safety and efficiency to the general public. Following the successful implementation of the free bus

service for all residents this past October, TM is now focusing on slowly implementing the electrification of buses and encouraging households and businesses to opt for electric cars by providing grants of up to €12,000. Government will also continue supporting sustainable mobility, including through measures supporting the uptake of electric scooters, pedelecs, and mopeds. Government is also in talks with the European Commission with a view to supporting the route between Valletta and Mgarr, Gozo served by the fast ferry service through a public service obligation. Furthermore, Government will carry out studies to determine the economic and financial feasibility of introducing metro transportation in Malta.

Additionally, Transport Malta will be doubling down on the aviation and maritime sectors, two key growth sectors of the Maltese economy. In that regard, over the coming year, Malta will be seeing the addition of more airlines basing their operations on the island, consolidating success in the ship registry and enhancing Malta’s presence within the area of super yachts and yachting on an international level.

Capital projects are also an important element of the Ministry’s portfolio. Over the next twelve months, the Grand Harbour Regeneration

Corporation will be implementing projects in Valletta whilst broadening the focus also on the regeneration of the Grand Harbour and of the Marsa town centre. During 2023, Government shall start commissioning the necessary technical studies. Finally, work is also underway with regards to projects of land reclamation. A number of sites have been identified, and over the next year, Government shall commission the necessary technical studies focusing on the economic feasibility and subsequently the environmental studies.

Government’s expenditure is key for economic growth. It forms aggregate demand, consolidates household consumption and business investment alike. Thus, it becomes a vital ingredient to achieve aggregate demand increases and interfere a strong economy.

We are able to continue prioritising transport and infrastructural projects because we have a strong economy; because we continue to focus on new economic niches and creating new jobs. Government’s focus on maintaining this stability and certainty is precisely what will ensure that our country has a bright future.

Aaron Farrugia is Minister for Transport, Infrastructure and Capital Projects

A s cia Budget – i deed

This is the scenario in which this year’s budget was presented in.

MICHAEL FALZON

Regardless of all this, however, we remain steadfast in our vision to further enhance the quality of life for our citizens based on a sustainable economy and social justice.

We have no illusion that combining economic growth, environment protection and social fairness, even at the best of times, is hard to achieve, let alone under the conditions of a “perfect storm”. Nevertheless, the strategy laid down by the Minister of finance is clear. We shall continue with fiscal responsibility and sustainability, while prioritising the well-being of the people and the businesses.

The budget presented last Monday was an exercise in strategic thinking and planning, accompanied with timely and sufficient action where needed. Our critics thought that the current international

predicaments will limit our capacity to change, but how wrong they were. They underestimated the confidence gained from the COVID 19 experience. The pandemic taught us, that in times of crisis, Government needs to stimulate the economy and support the people, as opposed to taking austerity measures. We chose the former road, one which is less sought by conservative Governments, but which for us, is the natural choice. We bounced back once, and we will do it again. This budget is a testimony that the way we do economics and social policy, not only works, but it also gives us the momentum to keep on course for an integrated approach to sustainable development.

The social welfare measures top the priorities list of this Government with a staggering 608 million euros going directly to fight inflation by subsidising the cost of energy and grain, together with €9.90 per week cost of living allowance to all

workers. A further 65 million will go to circa 96,000 pensioners, while 41,000 families shall benefit from 5.6 million euros in the form of an increase in children’s allowances.

Government is also seeking to address specific cohorts within the population that would need special assistance. The new mechanism that calculates the cost-of-living increase for those in vulnerable situations, does specifically that. An estimated 80,000 individuals shall benefit from the most socialist of the measures, a measure which is designed not only to compensate for the cost-ofliving increases, but also to ensure social security for the most vulnerable.

First time buyers will now benefit from a grant of 10,000 euros spread over 10 years, while those in rented accommodation shall benefit from an increase in rent subsidies. The carers grant to parents of disabled children, is

being increased from 500 euros to 4,500 euros per annum. A further 4.2 million euros shall go for the independent community living scheme, for people with disabilities, tax credits granted to parents of children needing therapy, foster care allowance, together with improved rates in the tapering of benefits system as well as specific measures that augment the quality of life of pensioners who do not qualify for a full pension. In line, 8 million will be allocated to address past anomalies.

Solidarity measures are not an add on, or a nice to have in a strategy for development. Social policy is central and intrinsic for a successful transition to a sustainable economy and for the well-being of all our citizens.

This budget defines who we are as socialists who truly believe in social justice and we are proud of it.

Michael Falzon is Minister for Social Policy and Children’s Rights

The slow economic recovery of most major economies following the pandemic; the urgent need to address climate change; the tackling of unprecedented inflationary pressures; the insecurity of energy and grain supply; together with social instability; was described by the IMF as “The Perfect Storm”

Budget reacti s

GWU: ‘A fair and just budget’

The General Workers’ Union’s reaction to the Budget 2023 was one of praise, as it says it builds on the social improvements introduced in previous budgets.

The GWU said it is also satisfied with the social aspect of the budget, stating that “while other countries are still battling the economic difficulties they find themselves facing, Malta is ensuring economic growth while easing everyone’s mind.”

The most important measure found in the budget, according to the GWU, is that of the €600 million fund to absorb the expenses of the raise in electricity and cereal prices. “Without introducing new taxes, the government has kept prices low while ensuring a sustainable economy.”

The GWU also mentioned the increase in pensions, the added COLA mechanism, increase in children allowances, increase in stipend, increase in carers’ grants and tax refunds.

Praise was also given for the expected economic growth of the economy for 2023, as well as the decrease in deficit from 8% to 5.8%.

“The government is in a position to safeguard stability within Maltese families because of its hard work throughout the years. This Budget will ensure economic recovery in a time of difficulties.”

Malta Chamber of Commerce: A budget that preserves our current economic model

It is evident that Government is using all the financial resources it has available to maintain stable energy prices and to safeguard the spending power of lower income groups against the backdrop of persistent inflation, the Malta Chamber of Commerce said.

“We would have liked to see more ambition with respect to sustainability beyond the continuation of existing schemes for the purchase of electric vehicles. We would also have liked to see more tangible support with respect to innovation and new economic niches that can guarantee sustainable economic growth.”

It is positive to note that Government acknowledges that in spite of all the investment in roads and free public transport, traffic congestion has not improved, and it is therefore seeking to engage with stakeholders to limit circulation of certain service vehicles before 9am, the Chamber said.

Similarly, the Chamber said that it feels encouraged to see that its proposal for the establishment of a Board for the assessment of quality and aesthetics

features of new developments has been taken on board.

The bulk of proposals are actually 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 longerterm strategy to be future-ready, the Chamber said.

The financial projections presented rely on Government’s ability to raise funds through the issue of Government stocks and presume a modest negative impact on our exports against the prospect of a looming recession in Europe. The extent to which a recession in Europe will impact our manufactured exports and tourism will be a determining factor for the performance of our economy in 2023, the Chamber concluded.

Chamber of SMEs: A budget of continuity

The Malta Chamber of SMEs welcomed the continued confirmation that the government will be extending the safety net of protecting Malta from the international hikes of energy prices, saying that this is by far the biggest threat Malta is facing at the moment.

UĦM: ‘Budget lacked long-term vision’

The UĦM – Voice of the Workers welcomed proposals on COLA for civil servants and public entity workers, but warned that with slower growth, the Budget lacked long-term vision.

“At present the country needs investment in human resources. The Budget does not mention how it will increase productivity to move from a quantity-economy to one based on quality.”

UĦM said there were no concrete proposals on the environment, and the way by which to address traffic problems, increase energy efficiency, and increase public and recreational spaces for families.

UĦM said many of its proposals were ignored, chiefly the non-payment of stamp duty, double payment for all on Sundays, and work-family balance measures for parents to have the right to reduced hours.

Another positive element found in this Budget is the extension and widening of the Rent Subsidy Scheme, as proposed by the Malta Chamber of SMEs, that will help Malta mitigate the impact of freight costs. The work being done to tackle issues with banking services and the increased importance being given to aesthetics in the development of buildings are positively noted.

Apart from this, the budget is a continuation of the 2022 budget, where it concerns SMEs.

The Chamber said that disappointingly, the Budget fails to effectively tackle other major challenges which are choking businesses.

“Very serious issues have merely been given a mention in this Budget speech, which falls too short from the action that Malta should be taking at the moment, as a stage of implementation.”

The serious employment crisis, suffocating bureaucracy and impossible traffic merited more than a simple mention in this budget. These issues are seriously affecting productivity and we cannot afford to start thinking of policies now, with no solution anywhere on the horizon, the Chamber said.

Budget reacti s

Malta Employers Association: A budget that is focused on shortterm stability

Employers said that on a macro scale, the main feature of the budget is government’s decision to shoulder the increase in fuel, energy and cereal prices on businesses and consumers to maintain economic stability and price competitiveness. This is fundamental in a global scenario where many countries are experiencing rates of inflation which have been unheard of for more than 40 years, it said.

“In the current situation, the government does not have much room for fiscal manoeuvrability, and for the fiscal targets to be attained, it becomes even more imperative that government exercises discipline in its spending, and to curtail unnecessary expenditure such as unproductive employment in the public sector and extravagant activities of dubious national benefit,” the MEA said.

The MEA said that it agrees with the Minister’s announced objective to have a viable national airline. The Association added that for such an objective to be realised, the airline must be run on a commercial basis, free from politically motivated interference.

All in all, while the budget speech addressed the immediate issues, which might be understandable in an uncertain global situation, the MEA noted that this has to be accompanied with a longer-term economic direction. This includes a clear human resources strategy, which should follow the exercise of the census of skills, together with a plan for economic transformation to maximise the country’s economic potential whilst safeguarding the people’s quality of life.

MHRA President Tony Zahra stated in the MHRA’s reaction that “the Government’s 600 million investment in energy represents approximately 10% of Malta’s budget and this must be the most important budgetary measure towards ensuring the continued sustainability of the tourism industry.”

MHRA noted that countries which have not been as bold as Malta in subsidizing energy costs are finding that a lot of small and medium-sized enterprises are struggling to stay afloat. MHRA said that it believes that this budgetary measure was necessary to ensure the continued good health of the tourism and hospitality sector.

Zahra also remarked that air connectivity remains the key to a successful economy, especially in relation to the tourism sector, where 99% of tourists arrive by air. In this respect Air Malta remains the most important channel for the industry and MHRA reiterated that the national airline must continue flying without any interruptions whatsoever.

With reference to the product, MHRA noted that once again reference is being made to the restructuring of the Tourism Zones Foundation for more effective embellishment and for the regeneration of tourism designated areas across Malta and Gozo. However, urgent attention is needed to ensure a better upkeep and cleanliness level for these zones.

MHRA welcomed the investment towards infrastructure, particularly the road network, electricity distribution and water production, but noted that investment in the drainage system is equally important.

MHRA also said that it is pleased to note that works on the ITS Campus are to commence next year, as labour supply remains a critical success factor for the industry.

currently facing, the Malta Union of Midwives and Nurses said.

“Patients in MDH will still be placed in corridors, in the medical library and in the staff canteen since this budget failed to provide the necessary investment for such inhumane areas to be closed down,” the union said.

The MUMN said that it would have expected the Government to embark on the building of new wards in MDH so that such areas will be closed down permanently.

“Our patients deserve proper wards when being admitted to MDH, and not to be placed in corridors or make-shift areas with mobile toilets. Currently there are four corridors used as “wards” in MDH besides the staff canteen and the medical library. That is six areas in all, areas which are “wards” having no toilets, no showers, and making it very difficult to deliver the proper care and maintain the dignity of the patient,” the union said.

MUT: Satisfied with teachers’ sectoral agreement inclusion in budget

The Malta Union of Teachers said in a statement that it is satisfied that the government has made reference to the new sectoral agreement for educators.

The new sectoral agreement will begin to be negotiated with the union as from next January, Caruana said in his speech.

The MUT said that with this electoral promise it has now become part of the Government’s programme to substantially improve salaries and working conditions for educators.

“The MUT looks forward to when these negotiations can be started.”

With reference to laptops for each student in secondary school, this measure requires discussion both from a logistical point of view and with regards to the pedagogical use of these resources, noted the union.

The MUT also urged the government to finalise the distribution process of laptops to educators in State schools, as it “has been going on for a number of years now.”

The union also welcomed the increase that will be given to government workers who fall under a particular agreement, as they will also be benefitting from financial increases, since the COLA has now reached a new height.

The new wards would have been the most important investment for the Health Sector and should have been given a priority since patients are suffering and paying a high price, but it is clear that this budget completely ignored the needs of the patients and the everincreasing population. In this budget, the so-called deficit has become more important than the lives of the Maltese people, which is a great shame, the union said.

Another important issue which the MUMN said that the budget failed to address was that of Mt. Carmel Hospital, which not only requires a massive refurbishment, but has also become too small to cater for the needs of the population.

MUMN said that it is disappointed to note that no finances are being allocated to actually permit Mt. Carmel Hospital to address the mental wellbeing of our society.

The budget also failed to address the shortage of nurses, the union said, and also “recycled investments” that have been mentioned in previous budgets, but in fact have never even started, let alone been completed, such as the new mental health facilities at Mater Dei Hospital, the refurbishment of Mt Carmel Hospital, and the new outpatients block at Mater Dei.

The budget focused on the new Health Centres in Paola and Gozo, which investments are far from new, since they have been moving at a very slow pace for the last six years, the union pointed out.

“MUMN has no other option but to label such a budget as disappointing, since it drastically fails to address the needs of the patients and shows that the Government has no intention to give the Health sector the priority it deserves.”

MUMN: A very disappointing budget for the Health Sector

The 2023 Budget fails to address the major crisis which the Health Sector is

MHRA: ‘Strong headwinds, importance of firm hand on the tiller’

Ec ic stabi ity i a u stab e w r d

Last Monday the minister for finance presented the annual Budget speech for the year 2023. People were hooked to the television and the radio to listen whether it will be a bountiful or a stingy Budget. Indeed, it turned out to be a bountiful one. Direct taxes were left untouched and the reallocation of capital expenditure made it possible to sustain the most pressing negative effects of energy inflation.

Personally, I think that the most two awaited announcements were the stability of the energy and fuel prices and the cost-of-living adjustment better known by its acronym the COLA. This year’s COLA amounted to €9.90 per week. In addition, pensioners were rewarded an extra increment of€2.60,thereby increasing their pension by €12.50per week. Moreover, a new adjustment to the COLA,for those falling within the vulnerable category, was introduced to support low-income families.

Notwithstanding that the COLA is one of the highest in recent years, also reflecting the increase in inflation, government sought to introduce additional targeted measures. The new targeted measures are directed towards different categories. Eighty thousand vulnerable people will be receiving an additional COLA under a new mechanism. This will be shouldered by the government without adding any additional burden on the private industry.

Research shows that in exceptional times of high inflation the COLA is not enough for those falling within the vulnerable bracket. The minister for finance explained that the Retail Price Index (RPI) does not always reflect the consumption behaviour of the most vulnerable families, especially in periods of instability and higher inflation. Clearly, in times of high inflation, the most typically affectedare those services and products that are mostly needed for low-income families. For this reason, government introduced a new mechanism targeting the most vulnerable by introducing a thorough analysis of the components of the products and services in the basket of the RPI. If annual inflation is higher than 2%and three out of five listed components, mainly food; accommodation; water, electricity, gas and fuel; costs related to the maintenance and household appliances and private health care, exceedthe average of the preceding years the new mechanism is triggered to help those falling in the vulnerable category. The finance minister informed that around 21,000 families will be receiving the compensation before Christmas.

There are other targeted measures and clearly some nudge economics was also introduced in the 2023 Budget.

One of the measures that caught my attention relates to the additional financial compensation for those suffering from the condition of coeliac. The targeted

measure relates to a compensation of €20 per month to aid families with the increase in food prices given that theirlimited choice of food products became dearer in the past months. Unquestionably, another measure that struck me pertains to the increase in the carers’grant.

Those parents who cannot work because they must take care of their adult children with severe disabilities,will be rewarded half the net of the national minimum wage which amounts to just over €4,500 annually and it will be paid every quarter.

Certainly, I can carry on mentioning other measures that I personally support. However, I will devote part of this article to the analysis of the Budget not just from a financial perspective but also from a people’s priorities perspective. When I engage with my counterparts abroad, they question the sustainability of these measures. Nevertheless, when I explain that the most important measures are those that offer stability to sustain economic growth through private investment and the stimulation of private consumption, they tend to somehow agree. Surely, these newly proposed policies ought to,just like the preceding Budget measures, yieldadditional economic growth.

During the Budget speech I stayed updating my social media page with the announced meas-

ures. My Hayekian peers were criticising the government intervention and leaving me comments on my page. However, the criticism brought a smile on my face. When I was analysing the fact that on mainland Europe people are worried about fuel shortages this winter, here in Malta some commentators were worried about the traffic congestions.

Certainly, fuel shortages won’t be a problem in Malta if traffic congestion is one of the most prioritised problems on the island. To put things into perspective I am not saying that in Malta we do not have a traffic problem. However, when I compare the traffic and the long queues that I had to wait under the park Cinquantenaire tunnel in Brussels, to arrive in time for my committee meetings in Council, certainly the traffic waiting time here in Malta is less than that of Brussels. Relatively, the same distance from Tarxien to Santa Venera used to take me twice the time in Brussels,even when we consider that they also have a tram and an underground system in place.

Currently, people in Europe are worried about the shortages of fuels, astronomical energy prices, as well as the shrinking pockets to provide for their families. Also, people are worried to pay higher loan mort-

gages repayments. It is worth mentioning that this week the European Central Bank announced another interest rate increase as part of their monetary policy measures to curb inflation. Undoubtedly, the economic prospects look grim. For this reason, in such turbulent economic times one would expect other priorities to top the list rather than the traffic congestion. I am not saying that this must not be a concern for the affected people, but it should not top the list.

Certainly, this reminds me of my elementary economics and the Maslow’s hierarchy of needs. When economic growth reaches society at large in what is called trickle-down economics, and when a country progresses, both economically and socially, the deficiency needs related to deprivation diminishes and people look for other priorities relating to growth. Indeed, when we reach the growth stage in the hierarchy of needs, these continue to be felt and perhaps become stronger once they have been engaged.

And to conclude, when we rank our priorities we must analyse the context of the global economy, especially when our European counterparts are grappling to make their ends meet.

Clint Flores is an economist

ANTON REFALO

Budget reacti s

Gozo Tourism Association: Satisfied with inclusion of long-stay tourism focus

The Gozo Tourism Association said that, due to the current international situation, it understands that this a budget that in the short-term ensures the sustainability of the business activity, as well as the wellbeing of the low-income earners, pensioners and workers battling to keep up with the rising cost of living.

Amongst measures related to tourism, this Budget includes a measure proposed by the Gozo Tourism Association. This measure, in the form of a scheme, is intended to attract long-stay tourists to the Island, particularly between the November and March period, to continue mitigating seasonality on Gozo.

Other measures affecting the Gozitan touristic sector refer to the inter-island connectivity, including the development of the rural airfield in Xewkija and the public service obligation contract for the operation of the fast ferry service between Mgarr and Valletta.

Whilst acknowledging the setting up of the Agency for Tourism Zones Development and Regeneration, the Gozo Tourism Association noted that there is no mention of the ring fencing of the eco-contribution funds collected from Gozitan accommodation for tourism projects on Gozo.

The additional COLA benefit announced in the Budget is a misguided attempt to create an alternative mechanism to one that already exists and that could be updated to reflect the needs of all those who have been feeling the pinch of the cost of living increase, including those who depend on social services.

This was stated by ADPD – The Green Party Chairperson Carmel Cacopardo in the first reactions to the Budget 2023.

“The need for the newly-created COLA additional mechanism confirms what we have been stating all along – that the current mechanism badly needs to be updated to better reflect today’s needs. For the first time, the Minister of Finance is confirming that over 80,000 people are living in poverty. While the policy of handouts, Father Christmasstyle, has been reinforced, these individuals are not being assisted to improve their situation so that they no longer need to depend on social benefits,” the ADPD said.

Although the current geopolitical realities are indisputable, one would have expected the Budget to include more measures to bring about permanent changes to improve the quality of life for all, it added.

It has long been felt that the basket of products and services that are used to work out the minimum wage and COLA need to be revised to reflect today’s needs. Caritas’ studies have shown that the minimum wage is at least 40% less than what it needs to be. This means that low income earners cannot ensure a decent living for their families. Only a regularly revised basket will lead to a decent minimum wage and improved pensions and social services that ensure a decent living income, it continued.

“Government hard-headedness in its refusal to revise the current basket, on which the minimum wage is calculated,

is keeping people dependent on low wages and on government handouts.”

The party highlighted that COLA compensates for the impact the past year’s inflation had on wages and pensions. With a substantial rate of inflation a once-a-year COLA increase is not sufficient to minimise the impact in a timely manner and the increase should be split in two – between July and January.

Basic, essential consumption of electricity should remain subsidised. Otherwise the subsidies on the consumption over and above essential use and on fuels should be studied better. It is pertinent to point out that more expensive fuels are a price signal which can push towards less cars on our roads, with people mainly using cars when absolutely necessary. This price signal should be coupled with more frequent public transport services, and serious investment in safe roads for clean modes of transport, resulting in better air quality for us all, the ADPD said.

“Less subsidies on fuels can also mean more quality investment in sectors which really and truly lead to a better quality of life for future generations –more investment in quality education, and the transition to renewable energy – sectors for which only token initiatives were mentioned in the Budget speech.”

“The international crisis is an opportunity to tackle overdependence on cars.”

Concluding, ADPD reiterated that this Budget could have focused more on the necessary measures – social and environmental – to permanently improve everyone’s quality of life.

concerning a Digital Innovation Hub for the purposes of facilitating the digital transformation of Maltese businesses. This is encouraging in terms of the challenge of digitalisation and similar measures have been called for by the MMF in the past.

Clearly, the MMF also noted those maritime-specific initiatives which were mentioned in the Budget Speech such as the continued digitalisation project of the maritime registry and the ongoing upgrading of maritime infrastructure including dredging works in Maltese harbours. Of course, dredging works are crucial to ensure safe access to private concessions for the purposes of terminal operations and ship-repair in particular. Such works ensure uninterrupted commercial operations in such concessions in the face of continuous changes at the sea-bed level which mainly occur due to deposits caused by rain and storms. Similarly, the MMF welcomes the proposed extensions of Pinto and Lascaris wharves which were once again mentioned in the 2023 Budget Speech. As the MMF commented in the past, the planning and timing of these works and coordination with related private-sector stakeholders is crucial to ensure minimal disruption to operations and commitments with key international players in the industry.

The Malta Maritime Forum: Safeguarding the competitiveness of local operators

The Malta Maritime Forum (MMF) acknowledged the approach taken in the 2023 Budget whereby the Government has decided to cushion the economy from the significant hikes in the cost of fuel and energy at an international level. This is a positive development in terms of safeguarding the competitiveness of local operators in a fiercely competitive regional market given that fuel and energy are important elements in the cost-structures of maritime business operations over a number of sectors not least transport, logistics, terminal operations, ship repair and ship services.

The MMF took note of generic initiatives announced in the Budget Speech which are also applicable to the Maritime Industry such as that

The Forum of course noted and welcomed the declared ambition made in the Budget Speech for the country to continue to consolidate its leading position in terms of ship registrations however the MMF must reiterate its position that there is much more to the maritime industry than ship registrations. At the same time, there is much more that is expected from the authorities to support the maritime industry than the promotion of the flagstate.

In fact, in anticipation of Budget Day, the MMF submitted a set of 9 concrete proposals aimed at supporting the Industry and businesses within it to grow sustainably. Here it highlighted the need for better planning and stronger focus on the maritime industry when it comes to charting the way forward for the industry in line with holistic strategies at the national level. The MMF’s flagship proposals were, in fact, calls for:

a)The re-establishment of a national Maritime Authority for Malta, and b)A dedicated Maritime Court

The MMF was disappointed to note that these were not included in the Budget Speech for 2023 and shall continue to pursue the matters with the authorities for the long-term benefit of the Industry.

ADPD says Budget fails to make best use of Malta’s limited resources

Ec ic gr wth

to their well off and luxury lifestyle.

However, the pinnacle on what the Budget forecast was presented upon is that the projected growth in public debt from around €9 billion in 2022 to around €12 billion in 2025, would be sustainable as the economy is forecasted to grow from the level of a GDP of around €16 billion in 2022 to around €20 billion in 2025 (as shown below). Such a forecasted growth in GDP would make it possible to keep the growing debt level within sustainable levels and hence within the 60% debt-to-GDP mark.

However, I feel it is very important that we get a good grasp as to what the projected growth in Malta’s economy until 2025, really means in practical terms. As can be seen below in 2021, we had a GDP level of almost €15 billion which was

possible through around 260,000 full-time equivalent employed people. This means that on average every employed person in the economy contributed around €56,000 to Malta’s GDP in 2021.

If we are to assume that the production levels will keep increasing year-on-year by 2.5% (similar to the increase in production we had in 2019), this would mean that to achieve the forecasted GDP level of almost €20 billion in 2025, the economy would need to increase the amount of full-time equivalent employed people by around 60,000 persons over the level of

employed persons in 2021. This would mean that Malta’s population would increase to around 580,000 from the level of 520,000 we had in 2021. This is a calculation based on a number of assumptions, mainly being that inflation will be as predicted by Government and that nominal GDP forecasted is not partially achieved by other means, like the curbing of the black economy. Such an increase in population would obviously mean a greater stress on the country’s infrastructure at all levels. It is curious however that with this added increased stress on

infrastructure, one would expect Government’s capital expenditure to keep increasing. Instead, Government is forecasting a decrease in capital expenditure in 2024 as shown below.

ust as the world economies were starting to recover from the pandemic, during which many governments increased their debts exposure dramatically to keep their economies afloat, we were all faced with a war in Europe that is creating an energy crisis with very wide-ranging inflationary effects. The Budget does absolutely everything from a social perspective to safeguard as much as possible the weakest in our society. In actual fact, the criticism on this front is that when trying to safeguard the weakest by subsidising energy and fuel costs for everyone, it would be doing so also for those consuming energy beyond certain levels due

Government has obviously an alternative route. Instead of pursuing growth based on the present economic system, to instead implement an economic strategy that adds more value added to the economy per person employed in the economy. This would mean pursuing new economic sectors that provide more value added, plus restructuring present economic sectors that to become more efficient. This would also mean adopting an economic policy of having people employed mostly within the economic sectors that provide greater value added. As a purely academic exercise, if Malta’s GDP is to grow to around €20 billion, whilst not increasing the 260,000 persons employed in the economy, this would mean that Malta’s economic productive output would need to increase by 7.8% year-on-year until 2025. This contrasts sharply with the increase in productive output of 2.5% experienced in 2019.

In this Budget there are some signals that Government is trying to going down this route, by getting more serious and coordinated on start-ups and aiding businesses become more digitalised, efficient and environmentally friendly. Will this be enough?

The message on the wall is quite clear. Whilst in the past it was easier to grow Malta’s economy by increasing the number of people active and participating in the economy, it will increasingly become difficult to pursue the forecasted economic growth based on this model. The challenge staring us in the face is to achieve the forecasted economic growth by increasing productive output, which means the implementation of a new economic strategy. At the end of day, it is either that, of having debt levels which are completely unsustainable, which would create more problems that the ones we are trying to avoid at the moment.

SILVAN MIFSUD

One surely understands that the Budget 2023 is being presented in an abysmal international economic climate