Malta gearing up for the future
This year’s budgetary preparations came in the wake of registering a surplus – a first after a 35year period during which year in year out, a deficit was registered. Indeed, last financial year, Malta registered also a surplus in structural terms, thus re
The importance of these achievements are also recognised by the Malta Fiscal Advisory Council in its half-yearly 2017 report, tabled in Parliament earlier this year. The Council remarked that the results not only meet the requirements prescribed by the Fiscal Responsibility Act, but, “importantly, the attainment of the fiscal targets would again ensure full compliance with the fiscal rules (specifically those regarding the budget balance and the debt-to-GDP ratio) prescribed by the Fiscal Responsibility Act and the Stability and Growth Pact.”
The importance of registering a budget surplus stems from the fact that such a result allows the Minister for Finance more room for manoeuvre to better address the country’s impending challenges: the improvement of its infrastructure; strengthening further its economic growth and achieve a better quality life for its citizens.
For the forthcoming financial year, the government is aiming to register, for the third successive year, a 0.5% surplus and concurrently, reducing the debtto-GDP ratio to just over the 50% mark. It is pertinent to highlight that such results will be achieved without resorting to increases of any existing direct or indirect taxes or the introduction of new taxes.
The well-being of the population remains a topmost priority on the government’s agenda. In fact, measures such as the weekly €2 increase for all pensioners; the €200 increase in the non-taxable pension income; the widening of the eligibility criteria and €20 per week increase in the disability pension; the “tax refund” to all full-time and part-time employees of a one-off payment amounting to a maximum refund of €68; the €30 per week increase in the fostering allowance; the monthly €200 wage increase to the community worker scheme’s employees; the grant which will be given to those couples who adopt a child; the extension of the allowance being given to guardians rearing orphans; the reduction and eventual removal of the SEC and MATSEC exams’ fees, are just a few of the measures which will improve the quality of life of our citizens in a tangible way.
The overall improvement of the social benefit package, the facilitation of entry into the labour market, especially of women, and the creation of new job opportunities, will continue reducing the number of individuals who are at risk of poverty while improving the living standards of the low and middle-income families.
Minister for Finance Scicluna has been saying that the economic success registered over the last four years brought about new challenges with the most pressing need being the need to invest and upgrade the existing infrastructure in order to support the increased economic activity and pave way for further growth.
In fact, for Malta to make the quantum leap in its developmental process and convergence to EU average living standards, it is paramount for the country to invest in infrastructure thereby ensuring that the latter does not pose a bottleneck to the economic growth being registered.
The most pressing issues are the hefty investment in waste management and disposal of domestic waste. We have physical constraints and thus we cannot continue to dump our domestic waste in virgin land. Exporting domestic waste to neighbouring countries, apart from being a costly operation, is a very shortterm solution. For a long-term, permanent solution, we need to invest in alternative technology. Here, we are talking about an investment which runs into millions of euros. It is thus of utmost importance that, following the widest possible consultation process, without any further delays, we take the decision about the most suitable investment to address our specific needs.
Another pressing issue is the complex problem of roads and traffic congestion coupled with the air pollution issue. The initiatives being introduced in this budget, whereby fiscal incentives are being given to those individuals who opt to either purchase vehicles operated by alternative power other than fuel or to go for bicycles or motor operated bicycles, can be seen as a small step forward but are aimed at instilling a culture change in favour of making use of public transport.
The upgrade of our roads is well overdue and must be carried out irrespective of any holistic strategy aimed at addressing the traffic congestion problem and that of coming up with alternative solutions to mass transportation instead of use of private vehicles.
The Agency, which is going to be set up in the coming months, will be looking into these issues while at the same time, oversee the implementation of the massive project of upgrading our roads.
The other pressing problem is the issue of social and affordable housing. The influx of foreign workers and the price hike of houses is compounding this problem.
The solution to address this problem is that of increasing the supply of property to meet the demand. The building programme of the Housing Authority, in conjunction with the private sector; the First-time buyer scheme; the Second-time buyer scheme and the introduction of the Equity Release schemes are just four initiatives, which will start addressing this complex problem.
In concluding, 2018 is looking very promising and one anticipates that Malta will continue to outshine its peers within the European Union to the advantage of all population living in Malta and Gozo.