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Coming up to this year’s budget, many people were very intrigued to see what issues were to be tackled and hopefully improved upon and many had quite high hopes. The main topic of this budget was obviously going to be Covid-19, as the pandemic has left a noticeable mark on Malta. It was made clear that the Covid-19 wage supplements and the following schemes will be retained till the end of March 2021:
tax deferrals
loan repayment moratoria
government guarantees of business bank loans
interest subsidy scheme
It was also stated that Malta’s GDP is expected to reduce by 7.4% in 2020. The document follows up to say that the Government is predicting the economy to recover in 2021 and grow by 5% in real terms and 6.4% in nominal terms. Unemployment is predicted to stand at 4% in 2021 with a 2.3% increase in jobs.
Mentions in the budget directly impacting Maltese citizens include:
Student stipends will increase pro-rata
Free internet to all students who continue post-secondary studies
Accommodation for Gozitan Students within Villa Lauri in Birkirkara
Matsec O / Intermediate / A level exams will take place at the same venue that students attend school in
New buildings for both the Institute for Physical Education & Sports, as well as the School of Performing Arts
Making the 4th ferry between Malta and Gozo permanent
An issue of another round of the €100 Government vouchers
Workers will be granted an additional day of leave to make up for the public holidays falling on weekends (28 days)
In-work benefits to increase for both spouses that work, one parent works and for single parents to €35,000, €26,000 and €23,000 respectively.
Increase in children’s allowance for low- and average-income families.
€70 per child per year for families that do not exceed a total of €25318 per annum
€50 per child per year for families that exceed a total of €25318 per annum
Foster care allowance increase by €520 - from €5,200 to €5,720
Adoption Grant - couples that adopt LOCALLY will benefit from a maximum of €1,000 to cover adoption expenses
Increase in pension of €3.25 per week (+€1.75 COLA) which translates to an increase of €260 per year. The applicable pension income tax exemption threshold is being raised to €14,058 in order to ensure that pension income remains exempt from tax
The career at home subside will increase from €5,291 to €6,000
Parents forced to stop work to look after a differently abled child (16+) will receive an annual grant of €300
Tax refund will between €45 and €95 with lower income earners, receiving a higher tax refund
Mentions in the budget directly impacting business include:
Increase in the exempt VAT threshold from €20,000 to €30,000 for small businesses/organisations
Taxes on property donations being eased, with the first €250,000 (increased from €200,000) being exempt from duty on documents
During 2021, the 15% final tax applicable on the first €100,000 payable on a transfer of a promise of sale agreement will be extended to the full amount of the consideration for the transfer of such rights
Industrial innovation scheme
Scheme will cover the lower of 50% and €200,000 of investment per company
€35,000 can be claimed in case of collaboration with research institutions
During 2021, Malta Enterprise will retain and improve upon the following schemes:
- the Micro Invest
- the Business Development and Continuity Scheme
- the Research & Development 2020 Scheme
- the R&D Feasibility Study Scheme
- the Business Start Scheme
Mentions in the Budget with direct Environmental implication include:
€1.5 million to be allocated to the scrapping of polluting cars scheme. The polluting cars have to have been circulating for more than 10 years. Grant amount will depend on the emissions of new car (capped at €7,000)
Vat refund scheme on purchase of bicycles and electric bikes to be extended another year.
Grant for buyers of bicycles, motorcycles, scooters equipped with an electric motor (capped at €400 per instance)
The annual license of small capacity motorcycles will be decreased from €65 to €25
On the 30th of September 2020, KSU issued a document of Budget Proposals made up and voted on by all the student organisations around University, including ASCS - https://www.ksu.org.mt/.../20-21/Pre-Budget%202021.pdf. ASCS also issued out a survey, asking FEMA students what they thought should be mentioned in the budget. These mainly included the wish to safeguard the environment which has not yet been damaged. It was understood that some of the proposals made through KSU were not mentioned in this budget. These include:
The amendment of the 20 hour limit a student can work to 30 hours not including weekends
The increase of teachers wages to acknowledge the effort done by them after hours of work and to alleviate the teacher shortage by incentivising prospective teachers
An increase of oversees scholarships opportunities as after Brexit these have been lacking
Increase in IT training for free for teachers due to online teaching
Fast ferries from Gozo to different locations around Malta (already proposed and dropped)
Any mention of Mental Health issues
This was undeniably a turbulent year with severe, direct economic repercussions. Despite the positive mentions in the budget and previous proposal extensions to 2021 (which several extended only until March), it was still perceived to be rather uninspiring overall. COVID-19 supplements we are definitely domain point of contention, which was rightly placed as the focal point for this year's budget. However, it was disappointing to note the lack of emphasis placed on environmental proposals, and the complete neglect of mental health issues, which were not addressed whatsoever. Understandably, there are certain pressing matters which surpass others currently, however the oversight of important sectors remains somewhat disheartening.