Labour Government delivers first budget
Finance Minister Dr. Edward Scicluna delivered the first budget of Prime Minister Joseph Muscat’s Labour government yesterday. The Finance Minister announced that income would be around €3.05 billion in the current year with expenditure at €3.23 billion. Debt will reach €179.8 million.
The government estimates a deficit of €191.3 million or 2.7% of GDP. The target is to reduce the deficit to GDP ratio to less than 3%. Growth is likely to come in at 1.2% in 2013 and projected at 1.7% growth in 2014. Unemployment stands at 6.4% and annual inflation was 2.9%. Capital expenditure will be €453 million an increase of €66 million on the previous year.
The minister went on to say that the budget aims to continue fiscal consolidation and economic sustainability whilst strengthening the social safety net and providing incentives for further investment and the creation of jobs.
The Finance Minister listed six priorities as follows:
1) Expenditure should match revenue generated
2) Reduction of energy costs
3) Making Work Pay to improve economic efficiency
4) Reduction in bureaucracy and wasted resources
5) Diversification in industries and target countries with which Malta undertakes economic activity
6) Social services to be based on the concept of sustainability whilst ensuring that they are strengthened and improved.
Dr. Scicluna delivered some 250 measures within the budget but most important were a reduction in utility bills including power (25%) and water (5%) tariffs; top rate of income tax reduced from 32% to 29% and part-time workers to get 15% tax on the first €10,000 of their income, up from €7,000.
You can read the full budget document here.