Government is committed to supporting the spending power of our families.
That is the message that resonates loud out of the Budget for 2024, presented yesterday night; a Budget that intends to tangibly improve the purchasing power of the most vulnerable segments of the economy.
The historical increase in pensions together with an agreement to increase the minimum wage are undeniably the flagship proposals therein, coupled with other bold decisions that will make a real difference in people’s lives. The extension of the COLA Plus mechanism will now cover more than 95,000 families, some of whom can see their income supplemented by nothing short of €1,500.
This is, in turn, reinforced by additional enhancements to the in-work benefit schemes, substantial increments on children allowances, and other cash bonuses to families.
But this is just one very important facet of the Budget 2024. The €900 million public investment earmarked for next year extends itself beyond the social element and delves into strong incentives to elevate our economy towards high quality sectors such as the specialised micro-chip manufacturing industry.
This Budget is testament to a government intending on furthering wellbeing for all, whilst giving a tangible direction forward.
As we confront the challenges of a growing ageing population and extended life expectancy, Malta is faced with an opportunity of a rising cohort of retirees who are physically capable and eager to work.
This Budget is improving the pension top-up that these senior employees will receive if they keep on working beyond their early retirement age to 29 per cent: an important incentive that will allow experienced human capital to remain in employment in an economic backdrop characterised by a lack of adequately skilled labour.
Furthermore, to keep incentivising pensioners to work beyond the official pension age, the government will now be raising the proportion of untaxed employment income to 60 per cent, on top of an untaxed pensionable income.
That’s not all – pensioners will now be receiving a €15 per week increase in their pension, equivalent to an added 1 month’s pension for some.
Supporting families and reducing the number of early school leavers
This Budget represents the most significant increase in children’s allowance since it was first introduced half a century ago. Starting in 2024, the children’s allowance will see a boost of €250 per child, nearly three times the increase seen in 2023.
We know all too well the worrying amount of early school leavers our country has. To help combat this, parents whose children choose to pursue their education beyond the mandatory age of 16 will now receive a special allowance of €1,500 spread over three years. Such measures incentivise education advancement which is the key to social mobility, reduced unemployment, improved health and wellbeing, civic engagement, and global competitiveness.
Promoting Gozo’s heritage and beauty
As outlined in Gozo’s strategy, the vision is to have an island of villages. Therefore, the reduced stamp duty scheme for Gozo properties will not be prolonged beyond this year. Conversely, there will be an increase in grants for the acquisition of vacant properties and properties situated in the Urban Conservation Area (UCA). These actions underscore the commitment of emphasising quality over quantity.
A better quality of life
In the wake of constant geopolitical and economic shocks – the pandemic, the ongoing conflict in Ukraine and the Middle East, coupled with sluggish economic growth within the EU and worsened by inflation, Malta is resolute in its decision to maintain energy and fuel subsidies throughout 2024. For a family consisting of two parents and two children, this translates to significant savings, amounting to around €1,275 on electricity bills and an additional €600 for car fuel expenses. Such measures are set to provide substantial assistance to both the middle class and businesses alike.
Malta is committed to providing a better quality of life and the energy subsidy is only one out of a series of incentives aimed at this.
With the Cost of Living Allowance, Malta will be giving people almost €1,000 per year on top of its employment income to combat the problems faced with inflation.
Quality of life is not so simply quantifiable, however, as the expansion of green open areas can provide as large as an improvement as the former. This budget has doubled the financial commitment for green open spaces as work is set to commence on an additional 80,000 square meters of green spaces.
A clear social agenda
Yesterday’s Budget sends a resounding message of social awareness and commitment to the well-being of all citizens. It acknowledges the challenges posed by global economic uncertainty, inflation, and the rising cost of living, particularly impacting the working class.
With a clear social agenda, this Budget focuses on supporting pensioners and low-income earners whilst simultaneously supporting the industry to develop the competitive leverage needed to generate future-proof growth.
Photo credit: Cottonbro Studio