Budget 2020 Sustaining inclusive growth

Malta’s budget is expected to be presented by mid-October, Finance Minister Edward Scicluna said on Tuesday although the exact date is still to be announced.

The pre-budget document, titled ‘Sustaining Inclusive Growth’, was presented by Finance Minister Edward Scicluna on Tuesday, in preparation for Budget 2020. The government, Scicluna said, is looking to focus this budget on the elderly and healthcare, among other things.

Asked if there is a plan to increase taxes or add on new taxes, he said that the government does not normally announce this at this time, and would rather wait for the budget and announce then. He said that he did not want to comment about taxation at this point.

Scicluna said that economic prosperity allows the government to continue to commit to policies that ensure greater social justice.

In the coming years, the government will continue to address the new challenges brought about by the rapid economic expansion to ensure that economic growth is sustained, he said. “The strengthening of the public institutions including the justice system, as well as sustaining the investment in the health and education sectors, will remain a priority. The upgrading of the physical and digital infrastructure will continue to feature in future budgets as well.

“The Maltese economy is a success story. We will ensure that this success is well-managed so that it continues to be enjoyed by all. In this regard, inclusion and integration are key. Indeed, we will nurture a society that cares.”

The document itself highlights the government’s priority areas for the 2020 budget. “The government will continue to ensure higher quality in healthcare services, while prioritising investment in education to sustain the improvements being achieved so far. It will also continue with its drive to strengthen the regulatory and supervisory institutions while focusing on making Malta a leading player in technological innovation as well as raising the quality of Malta’s tourism product offer.”

Asked about recent rises in price for fuel and milk, and whether the government has any incentives or plans to deal with this situation and help those who suffered as a result, the minister said the government is taking note of any economic changes, and watch them very closely. He said that the Central Bank’s remit itself is inflation. He said that any increases are noted “and we will see what effect the automatic mechanism will have on this, and whether there will be any additional measures required in the budget to address that.”

Justice system reforms

The document highlights that the year 2020 should see the implementation of the separation of functions of the Office of the Attorney General through the establishment of the Office of State Advocate which will act as legal advisor to the Government. The legislation to set up the new Prosecution Unit has been passed through Parliament.

“At the same time, the government is intent on implementing further aspects mentioned in the Venice Commission report on Malta, particularly those related to an improved system of Judicial appointments which requires the support of a two thirds majority in the House and the other subjects on which there has already been a first reading in Parliament. These, in all, cater for one third of all the Venice Commission proposals.”

Institutions and authorities

Apart from the enactment of legislation to transpose the fifth AntiMoney Laundering Directive, more initiatives will come into force from other regulations against fiscal evasion, such as the Base Erosion Profit Shifting Directive (BEPS), the document explains.

“The government will continue with its drive to strengthen its regulatory and supervisory institutions. These institutions have been engaged in implementing a substantial number of initiatives... The international institutions are recognising the efforts and endorsing the improvements being made in this regard. The strengthening of the process of prosecution, where cases of money-laundering and tax evasion arise, will continue, with the setting-up of a specialised Financial Organised Crime Agency.

The National Coordination Committee will spearhead further initiatives to be taken to ensure closer collaboration and sharing of information between the institutions.

Innovative technology hub

The document highlights that the first licensed operators in virtual financial assets will soon start operating. “This will encourage further private investment in Malta, in turn creating not only high skilled employment but also bringing knowledge and other related positive externalities.”

Artificial Intelligence will complement blockchain, the document adds. “It can be developed into a new economic niche. Currently, the government is working on assessing how regulatory and fiscal measures can be used to strengthen Malta’s appeal as a hub for foreign investment in this sector, while identifying the underlying skill base and infrastructure needed to support AI.”

The document also highlights that the space sector holds various opportunities and investing in this area provides national and commercial interests. “The government’s aim is to create a regulatory framework and incentives which improves Malta’s attractiveness and capability to capitalise upon commercial activities related to the outer space.”

It also states that the government will continue investing in the online gaming sector.

Social justice and social exclusion

The document states that the government will continue to improve the quality of life for the people and protect the most vulnerable in society.

“The government fully intends to make certain that senior citizens who have worked hard their entire lives enjoy a secure and dignified retirement, free of financial worries. Helping the elderly and the vulnerable remains a priority, especially certain pockets of poverty and deprivation which inevitably occur. These tend to be elderly people, mostly single who are over 65 years old, and who have low pensions. Women who have had limited working lives and therefore fail to qualify for a pension are also negatively affected. “

Healthcare

The document highlights that further investment will be made to upgrade and enhance the health infrastructure. Among other things, “in the coming year, there will be a drive to improve the primary healthcare facilities to offer a number of specialised services in a more efficient and effective way.”

Other areas the government is focusing on include enhancing Gozo’s economic prosperity, continuing to improve road infrastructure, sustain the tourism industry success, quality education, youths and sport, the environment, gender balance in Parliament, and others.