On the 14th of October, 2019, Finance Minister Edward Scicluna delivered the Malta Budget 2020 speech.
The highlights of the speech were:
A. Leave and Wages
- COLA increase of €3.49 per week
- Special one-off bonus to make up for milk and bread price increases. Single person households will get €15 and other households will get €35.
- One extra day will be added to leave
B. Income Tax Refund
- A tax refund ranging from €40 to €68 will be paid out to anyone who has worked. This will benefit 200,000 workers and will cost €11.5 million
C. Lower Tax on Overtime
- Overtime will be taxed at 15%. This measure will apply on the first 100 hours of overtime in a year, for those with a basic salary of not more than €20,000. The estimated cost of such a measure will be between €5million and €6 million
D. Equal pay for job of equal value
- The government wants to introduce the concept in the private sector of equal pay for jobs of equal value. The matter will be discussed next year with social partners. This is not a gender issue but one that will target cheap labour on shop floors where contract workers are paid less and this will apply to basic wages.
E. Pensioners
- Pensioners will receive an increase of €7 per week, inclusive of COLA
- People who retire from disciplinary corps after 25 years of service will have their retirement pension recalculated upon reaching retirement age
- The supplementary allowance for over 65 will increase by €50 to €150
- The old age benefit of €300 for those over 75 will be retained and increased to €350 for those over 80
- Government will issue 62 bonds targeting 6,500 pensioners
- All those who are 75 and over will get free public transport
E. Child Bonus
- Parents will receive €300 bonus for every child born or adopted
F. Social measures
- Discrepancies in children’s allowances for widows will be removed and all widows will receive €10 per week
- Injustice fund will get another injection of €13 million
- Disability pension for those who cannot work will increase to €161 per week, from €150.
- The grant to cover VAT expense on the purchase of equipment for the disabled will increase from €400 to €1,000
- Parents who take care of children with a rare disease will be awarded eight years of National Insurance payments
G. Health
- People suffering from fibromyalgia will be considered for sickness benefit, including first three days of sick covered by the government
- More medicines will be added onto the free formulary for oncology, heart disease, skin, and rare diseases
H. Property
- New scheme will see people under 40 who cannot cover the 10% deposit to buy a house, eligible for a government interest-free loan up to maximum of €17,500, paid back over 15 years
- First time buyers scheme will apply on property value of €175,000, an increase from €150,000, and the maximum benefit will increase to €6,500 from €5,000
- The new rent law will be introduced next year
- Schemes for property purchases in Gozo, urban conservation areas, second time buyers and equity sharing will be retained
- Housing benefit will be extended for those who spend more than 25% of their income on rent
- A 15% withholding tax will be introduced on the sale of air space
I. Climate Change
- National strategy on carbon neutrality by 2050 to be published
- The changeover date when sale of zero and low emission vehicles will be stopped to be announced in 2020
- Electric car owners to pay special tariff of 12.98 cents
- Next year, the bottle return scheme will start
- Single-use plastic will be banned in phases starting from a ban on importation in 2021 and distribution in 2022
- Grant to help shops set up an environmentally friendly way of selling products by weight
- The project to roof over the exit of the Santa Venera tunnels will start
- Work on the expansion of the Ta’ Qali national park will commence
- A grant up to a maximum of €200,000 for contractors to change machinery into cleaner, and less noisy
- Schemes covering PV panels and water pumps will continue
- Those who introduced PV panels some years ago and whose pay back rate is running out will benefit from a €1,000 grant to buy their own battery to store electricity
- Lighting systems in all squares will be changed to renewable self-sufficient systems
- Malta Stock Exchange will open up for green bonds
J. No VAT on education
- VAT will be removed on educational and vocational services, including distance learning
K. Education
- One tablet, one child scheme will be extended to cover middle schools through pilot project
- Qawra primary school will be ready
- Drinking water fountains will be introduced in schools
- A new study on the weight of student bags
- Maltese language online spell checker will be developed at cost of €8 million
L. Other measures
- Malta Enterprise will invest in open areas in industrial estates to make them greener and adequate meeting areas for employees
- The ex-dump site in Luqa will be transformed into sport facilities, housing the Valletta FC football ground, and an enterprise zone
- Cash transactions in real estate, car, yacht, precious metals and art, purchases will be limited to €10,000
- NGOs will have planning appeal fees capped at €1,000
- Work on an adventure park in Cottonera will start
M. Gozo tunnel
- The pre-qualification questionnaire will be issued in the coming weeks
N. Economy and finance
- Economy expected to grow in real terms at 4.3%
- The surplus for 2020 is projected at 1.4%
- This will be the fifth consecutive year that public finances will record a surplus
- The country would still register a surplus even without the IIP funds
- The debt-to-GDP ratio in 2020 is slated to drop to 40.4%
- For the third year running, the budget has no tax increases
- Budget will cost more than €5 billion
- Economy will grow to €14 billion
