Prime Minister Robert Abela has unveiled the theme for next year’s budget, set to be presented in Parliament this evening. The chosen theme, “Naħdmu Lejn Pajjiż ta’ Kwalità” (working towards a quality country) sets the stage for Finance Minister Clyde Caruana to deliver the third budget of this legislative term.

True to the spirit of earlier budgets, Labour’s 13^th budget since 2013 is anticipated to include further cuts to income tax, a pledge that aligns with the Government’s manifesto. Recent budgets have already introduced a series of positive initiatives, including a €10,000 grant for first-time buyers and a €1,500 allowance for parents whose children have pursued further education. In his upcoming address, Minister Caruana is expected to reveal enhancements to several social benefits, including pensions. He will also provide an overview of the country’s economic performance and the state of Government finances over the past year. According to the latest Eurostat statistics, the Government has achieved a notably improved deficit by mid-year, a promising indicator of its adherence to fiscal targets.

Today’s budget represents a pivotal moment in the evolution of the Government’s economic policy. The introduction of the Malta Vision 2050 process, already announced, will guide the formation of new strategic targets, ensuring the Government’s work remains aligned with people’s needs and aspirations.

All this must be considered in context: Malta’s public finances are demonstrating a robust performance. Over the first nine months of the year, the Government registered a remarkable surplus of €142 million, the highest recorded for this period since the commencement of such statistics. In stark contrast, during the final year of the previous Nationalist Government, the deficit stood at €282 million, with an even graver scenario in 2009 when it reached €334 million.

The figures from last year show a deficit of €48 million, indicating an impressive improvement of €190 million in public finances for 2023. This significant shift, exceeding earlier budget forecasts, resulted from Government revenue surging at a rate surpassing expenditure increases. Specifically, Government revenue soared by a record €748 million, reflecting a growth rate exceeding 16%. This upturn was largely driven by enhanced income from income tax, stamp duty, and VAT, underscoring the sustained economic growth Malta is currently experiencing.

Government expenditure, meanwhile, rose at a more measured pace, increasing by €558 million. Notably, over a third of this rise is attributed to enhancements in social benefits, including pensions and child allowances. Additionally, the costs associated with public sector salaries have grown as part of broader improvements in working conditions for various categories of public service workers.

Thanks to this positive financial trajectory, Central Government debt has seen a reduction of nearly €63 million between February and September of this year.

This financial success, achieved through prudent leadership and effective governance, empowers the Maltese Government to present a budget that not only meets current demands but also lays the groundwork for an ambitious future. The impressive economic outcomes pave the way for a Malta that embodies stability, sustainability, and an enhanced quality of life.