Updated 1100
Budget 2024 launched: pensions, minimum wage increase
Budget 2024 was launched on Monday evening, with government confirming an unprecedented Cost of Living Allowance of €12.81, a “prioritisation” in government spending, and an increase in the minimum wage and pensions. Children’s allowance will increase by €250 for every child, while pensions will be touched up for a 15 euro increase, including the COLA. As pledged in previous weeks, energy subsidies will remain. Finance Minister Clyde Caruana said without these energy subsidies, the average family would be paying double what they are paying now.
Healthy economic indicators forecasted
In terms of economic projections, the Budget expects the economy to maintain its positive momentum for the rest of the year with a predicted real GDP growth rate of 4.1%. Next year, the Maltese economy is expected to grow by 4.2% in real terms and 7.4% in nominal terms. Investment is expected to grow by 5.5%, while employment is expected to grow by 4.4% with unemployment levels remaining low, at 2.7%. Inflation is expected to decrease to 3.7% in 2024, with Caruana saying that increases in food prices and services are expected to persist but at a more moderate rate. Debt levels however continue to increase, and are expected to reach 11 billion euro by end of next year.
Finance Minister Clyde Caruana revealed on Monday that Malta will not be immediately implementing the newly agreed minimum tax rate for companies, as outlined by the OECD. In his budget speech, Caruana clarified that European Union (EU) member states have the option to postpone the introduction of the 15% minimum tax for a maximum of six years. These regulations are applicable to companies with a global income exceeding €750 million. Approximately 660 multinational companies with a presence in Malta are expected to be affected by these rules, collectively employing around 20,000 individuals. Caruana emphasized that, given the six-year grace period, it is not advantageous for Malta to enforce the new tax regulations in the upcoming year.
No immediate changes on corporate tax
Finance Minister Clyde Caruana revealed that Malta will not be immediately implementing the newly agreed minimum tax rate for companies, as outlined by the OECD. In his budget speech, Caruana clarified that European Union (EU) member states have the option to postpone the introduction of the 15% minimum tax for a maximum of six years. These regulations are applicable to companies with a global income exceeding €750 million. Approximately 660 multinational companies with a presence in Malta are expected to be affected by these rules, collectively employing around 20,000 individuals. Caruana emphasized that, given the six-year grace period, it is not advantageous for Malta to enforce the new tax regulations in the upcoming year.
Government to commit €215m in capital investment for new airline
The government is committing €215 million in capital investment for the establishment of Malta’s forthcoming national airline, scheduled to commence operations on March 31, 2024. In his budget speech to the nation, Finance Minister Clyde Caruana reiterated the significance of Malta having its own national carrier, emphasizing its integral role in driving economic growth. In an earlier announcement in October, Caruana disclosed that Air Malta would officially cease operations on March 30, 2024. The new airline will initially operate with eight aircraft, and over time, the company aims to have three of these aircraft owned outright rather than being leased. It is also slated to serve 17 routes.
A budget that offers no solutions – Grech
PN leader Bernard Grech said that the budget presented on Monday failed to provide solutions to the key issues afflicting the Maltese public, including overpopulation, the cost of living, environmental woes and corruption.He pointed out that the public is feeling the burden of this population growth, which increases by thousands, while the government persists with its current economic strategy, heavily reliant on the importation of low-earning foreign workers. As a result, he explained, this places nationals in competition for healthcare services and exacerbates traffic congestion. Grech also highlighted how throughout the speech, the Finance Minister failed to indicate how government planned to recover the over 400m euro paid for the Vitals/Steward fraudulent deal.
