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ASCS Review on Budget 2020

Updated: Aug 31, 2022

The Budget presented for 2020 was on the most part a pretty uneventful budget. The budget very clearly showed that the country is in surplus, with its strict emphasis on the fact that this was the third consecutive budget without an increase in taxes. The budget was also full of tax rebates and one offs meant to counter increases in the cost of living (such as the milk and bread price bonus).

However, ASCS feels that the root cause of much discontent such as rampant construction and the negatives that come with it, the constant nibbling of ODZ land alongside the poverty inducing skyrocketing rental prices, were barely addressed in this budget and if so, only at surface level. However there is hope that the new rental policy may help to solve some of these issues.

The Economy

As already referred to, the 2020 Budget does not include any new taxes, tariffs or duties, or an increase on the current ones. Despite taxes not being increased, this year the government is expected to receive €141 million more in income taxes alone from income taxes in 2020. This reduces the need to increase taxes that will counter the increases in expenditure brought about by increased welfare benefits and increased spending on roads and infrastructure.

Social Welfare

A new scheme was announced whereby people under 40 years of age who are not able to cover the 10% deposit to qualify for a mortgage will be eligible for a government interest-free loan up to a maximum of €17,000. This is a big step forward in the fight to eclipse the unprecedented increase in property prices in the last 5 years.

The first-time buyers’ scheme, which usually impacts young people starting in life, will continue into 2020 with some small adjustments to the inflation in this area although the adjustments fall short of the rise in prices.

The minimum wage increase this year (COLA) is an increase of €3.49 a week. ASCS feels that this increase was too little when compared to the great increases in the cost of living which Malta is being subject to. Pensioners on the other hand will receive a more substantial increase of €7 per week inclusive of the COLA adjustment.

A lower tax on overtime has been announced as the first 100 hours of overtime in a year will be taxed at only 15%. This is a very good step forward which will encourage productivity increases in the economy. However, it is disappointing to see that this scheme will exclude people that earn more than €20,000 a year. This disqualifies nearly all university graduates.


The free public transport scheme of 16-20 year olds has also been expanded to people which are 75 years of age and over. The free school transport to school children scheme has also been extended. This is a great idea as it will promote the usage of public transport and shift people slowly away from cars. However, this will never have a large effect unless dedicated bus lanes are built and cars are disincentived.

Three very good initiatives that serve to reduce the traffic gridlock in the country have been released in this budget.

1. New pedestrian and cycling bridges will be built in Blata l-Bajda, Gudja and Mcast.

2. The ferry network will also be extended to include St Paul’s Bay, Marsascala, Marsaxlokk, St Julian’s and Mellieħa.

3. All existing schemes to buy bicycles, scooters and pedelecs will be extended.

Climate change

Very welcome initiatives have been announced in this budget. New initiatives have made it even cheaper to run an electric car with a new special tariff of 12.98 cents. The date of the ban on importation of the sale of petrol and diesel cars will soon be announced.

The most drastic announcement was that single use plastics will finally be absolutely banned in 2022. This is a very sizable move forward which will hopefully drastically reduce the amount of rubbish which gets thrown in the Maltese and Gozitan towns, villages and countryside.

All in all, this budget was a good one. It has alluded to distributing some of the benefits that come with a growing economy. However, it could have been more ambitious in tackling certain severe problems which have been left relatively untouched.

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