Some of the main highlights that have been announced in tonights Budget 2012 are as follows:

Government forecast for 2012 is deficit of 2.3 percent of GDP. Income from direct and indirect taxation expected to be €2.5 billion, while €419.2 million comes from other sources of income. Recurrent expenditure expected by €92.6 million over 2011 forecast.

Capital investment in Malta and Gozo’s economy expected to be €425.3 million. Government’s debt is expected to be 68.9 per cent of GDP.

Inflation is expected to reach 2.1 per cent.

Cost-of-living increase will be €4.66 per week.

Employment is set as the Government’s main priority.

Budget is allocating €14.7 million for incentives to industry, increase of €5 million on last year.

Government investing €3 million over three-year period in fiscal incentives to those industries which consume more than 2Gwh per year and which invest in energy-saving measures and in systems which produce energy from clean sources.

MicroINVEST scheme, which offers a reduction in tax of 40 % of the investment value and 60 % in the case of Gozo, extended for another year.

Government to launch another guarantee scheme on bank loans intended to incentivize business and the creation of jobs in small businesses.

Government increases MTA’s allocation by a million euro, to €36 million to help it in attracting more tourists to the country.

€20 million is being committed to the restructuring of Airmalta.

Government investing another E4.2 million in archaeological sites around Malta and Gozo to continue increasing the value of the tourist’s experience in the country.

Local Councils and various associations will benefit from €3.3 million in European Union and Maltese Government Funds during 2012 to carry out a number of projects concerning the physical appearance and history of the country’s localities. They include Ta’ Pinu and the Victoria Foundation in Gozo.

Nearly half a million euro allocated to a number of festivals and to new art-related activities.

An added incentive to cultural education has been provided by extending the income tax reduction on sports education to included cultural education. Parents whose children attend courses in cultural and creative teaching institutions to benefit from a €100 reduction on taxable income for costs related to courses given by licensed or accredited schools or teachers. €40,000 allocated for a Public Lending Rights Fund so that authors and translators of books in Maltese receive remuneration when their publications are borrowed from public libraries.

Aid to be provided consumers who file a suit before the Consumer Tribunal, are asked to pay for the arbiter-appointed expert and end up dropping the action due to such expenses.

€10.8 million dedicated to the ETC which will include EU funds, to continue 10 programmes and schemes which provide training to to enable people to enter the labour market earlier or to become more flexible.

At present, pensioners working part-time with the Government are not entitled to the 15 % available to those working part-time in the private sector. This distinction will come to an end, and all these pensioners will now be able to benefit from the favourable rate of 15% on part-time work.

Maternity leave to be increased from 14 weeks to 16 weeks in 2012 and this should be increased by a further two weeks in 2013. The extra weeks will be payable from public finances with a fixed weekly rate of 160. Measure will be introduced after a discussion in the MCESD.

Introduction of new tax system category called ‘parent computation.’ Eligible for parents supporting children who are not gainfully employed up to 18 years of age. If the children are still in tertiary education, this age limit is extended to 21 years.

This means married couples with children will save between €150 and €840 in income tax yearly payments. More than 55,000 families will benefit through this measure which will result in a decrease of €10 million in government tax revenue.

Minimum excise duty on cigarettes to increase by 5.8 % on each packet of twenty. Excise duty on other tobacco products will increase by 8.5%. Excise duty mobile telephony remains unchanged but basic rate will change from tariff to volume.

Approximatelyy 19 % of the cars registered during this year were of the type Euro 1 to 3 or older. Registration tax on emissions for vehicles Euro 1 to 3 and older, which pollute more, will increase. Cars with emissions Euro 4 and Euro 5 will continue to pay the same rates currently in force.

An incentive to buy a new ‘greener’ car and scrapping the old one will amount to 15.25 per cent of the car value according to the make issued from the manufacturer or from the authorised agent of the manufacturer up to a maximum of 2,000 euro. The car needs to be new and with a Euro 5 engine or better with a low level of emissions up to 150g/km and the length must not exceed 4,460mm. The scheme will enter into force as from the 1st of December and will remain in force for 1 year or until 3,000 persons have benefited from it.

In 2012 in addition to the various incentives that are currently available to families in the energy sector which are being extended, the Government will introduce another scheme for anyone who wishes to invest in the roof insulation and double glazing. Grants of 15.25%, up to a maximum of €1,000, to whoever undertakes this investment. The sum of €400,000 is budgeted for this purpose.

Government will introduce a number of incentives related to restoration and conservation works of scheduled buildings in grades 1 and 2, as well as properties in UCAs on empty and derelict buildings in the town and city centres. The Government believes in the value of the investment in the urban environment. This investment creates a better environment and jobs in the localities, while it directs the energy of the construction sector towards urban zones that require regeneration.

MEPA will be widening the permitted use for these types of properties so that their use as guest houses, offices and other commercial premises will be permitted, while remaining compatible and complementary to the residential zones. The Government clarified that the benefits only apply when the property is being restored and renovated and not if the property is demolished to be rebuilt.

Government said that Gozo still needs special consideration to ensure that the Gozitan families enjoy the full success of our country as well. Employment in Gozo is also a main priority. This year, Government said it “launched a number of initiatives in favour of the Gozitan operators and families, including:

* 200 Gozitan enterprises which benefited from the Microinvest scheme;

* more than 150 enterprises which together employ more than 450 Gozitan workers, which benefited from the Employment Aid Programme;

* 411 Gozitan families which participated in the installation scheme of photovoltaic systems, and 209 families which benefited from the solar water heaters scheme; and

During 2011, we continued working on a number of projects, some of which were concluded, while others are nearly concluded. These include:

* the re-building of the roads of Ta’ Pinu and Xlendi, and works on the Dwejra road, with an investment of 1.1 million euro;

* work on the slaughterhouse;

* an investment of €1.5 million in new equipment in the Radiology Department at the General Hospital in Gozo, leading to more than 800 CT Scans. Gozitan women also took part in the Breast Screening Programme in Gozo;

* an investment of €1.5 million in the upgrading of the IT system at the General Hospital in Gozo, which enabled its connection to Mater Dei Hospital;

* embellishment works in Villa Rundle, which are nearly concluded;

* the conclusion in the Cittadella masterplan as a basis for a number of restoration and rehabilitation projects;

* the closure of the last drainage outflow in Wied il-Mielah;

* the reform in the Public Transport and the restructuring works in the terminus in Victoria; and

* the drawing up of a strategy catering for the development of the human resources skills and the manner by which the Gozitan economy can be further upgraded.”

“More Gozitan students are furthering their studies at the University of Malta, MCAST or ITS. This will lead to additional expenses for the families of these students who must find accommodation in Malta together with any other expenses they might have. For this reason, the Government had revised the additional allowance which the Government grants to Gozitan students in Malta.

As of the coming year, Government will increase this allowance again, and will bring every Gozitan student studying in Malta to the same level, irrespective of whether the studies are being carried out at University, MCAST or ITS. The total allocation in order to aid these students for the coming year amounts to more than €700,000.

Also during the coming year, Government will carry on more structural work in the Ninu Cremona Complex, in order to finalise a language lab for the hosting of a number of examinations. Government also continue working to further improve the health services offered by the Gozo General Hospital.

The maintenance programme will continued on the roads in several areas, while starting the extensions in the roads leading to Ta’ Pinu and Xlendi, which add on to the works carried out so far. For this purpose, Government is allocating €1.5 million.

The cleaning of valleys and collecting rainwater, building of new reservoirs and the maintenance of old ones, building more rubble walls, and a number of other initiatives in the agricultural, cultural, economic and social area will all continue.

Government said the greatest challenge for Gozo remains employment. Despite all efforts made in recent years, the progress in employment and jobs in Malta during the recent years is not proceeding at the same pace in Gozo. Some situations may be improved with coordinated effort, such as the requirement that MEPA and other authorities understand better the reality in Gozo. In order to coordinate a National effort for the economic and social development in Gozo, the Prime Minister entrusted the Secretariat for Strategic Policy within his Office to focus the efforts of all the public entities for the creation of more employment and better employment in Gozo. Undoubtedly the studies related to the possibility of a permanent link between Gozo and Malta must also reflect this reality.

During this year, the Government initiated the first studies regarding the possibility of a tunnel between Gozo and Malta. These studies should lead to a clear idea of the options which may be considered in order for Gozo to have a permanent link with Malta. This is a long and delicate process which may have a huge impact in the economic and social development of Gozo and therefore must be made in a way to allow that the strategic option made provides the best long term benefit for Gozo.

In this year’s budget, for the first time, Goernment have allocated half a million euro for advertising the island of Gozo as a distinct tourist destination. The promotion of Gozo overseas was carried out along two main lines: one addressing the Maltese public and the other addressing specific markets, amongst which the markets for cruise liners and diving in countries such as France, Germany and the United Kingdom. Since the tourist industry in Gozo depends on self-catering accommodation especially farmhouses, we deem that we must revise all the licensing systems of this industry in order to provide more incentives for quality and investment in this sector. For this purpose, the Government will launch a wide consultation with all the concerned operators in order to draw up a programme which will lead to substantial improvement in this sector.

For the coming year, Government are allocating €4 million in order to continue implementing these projects and to keep carrying out the Eco-Gozo vision. This includes starting a vast programme of aid so that the economic operators in Gozo can invest in energy from alternative sources. This programme starts next year and ends the following year and should increase the contribution of Gozo to obligations which the country has in the production of energy from clean sources while aiding the Gozitan industry in expenses relating to energy. It appears that by the end of 2012 the allocation of €25 million for eco-Gozo will not be totally absorbed. The Government commits itself to allocate the balance to 2013, as it also does with European Union Funds.

For 2012 the investment in the education sector will be of €359 million, an increase of €23 million. €22.3 million allocated for stipends. At present there are 18,000 students who receive a stipend at University, Junior College, MCAST and ITS.

In 2012 Government will set up a one million euro Fund in order to strengthen the sustainability of private schools. This Fund, which will be used by schools according to their pupil population.

This fund will be allocated to private schools according to the number or registered pupils in this way: €95 for every child in kindergarten, €145 for every pupil in primary school and €170 for every pupil in secondary school. This is the first step of a three-year programme intended to grow in total consultation with the representatives of the operators in this sector.

For 2012, Increase for students who need a learning support assistant in private schools to €400,000. It will also continue helping parents of children who attend these schools by increasing the maximum amount of tax reduction given to parents who pay school fees for their children. This initiative will cost €600,000:

* from €1,200 to €1,300 at the level of daycare, reception and kindergarten;

* from €1,200 to €1,600 at primary level; and

* from €1,600 to €2,300 at secondary level.

€100,000 scheme next year offering financial assistance to band clubs to help them in musical training and teaching of youths.

€100,000 for promising athletes who lose their physical and sporting development because of a lack of time for training during their secondary school years. €120,000 euro for scholarships in the sports sector so that those who show promise continue investing in their sporting skills even abroad. €350,000 euro for the Maltese Council for Sports and Transport Malta for the development of a motorsport circuit for training and competitions connected to karting, mini motos, quad bikes, motards, scooters, as well as for the tuning of vehicles which participate in hill climbs.

Increase of Children’s Allowance minimum rate by €100 to €350 a year for each child. This represents an investment of €2.8 million.

Television licences to be removed in 2012. Justice requires that those with an outstanding unpaid licence be asked to regularise their position, and a scheme will be implemented for them to be able to do this and thus avoid paying additional fines. The removal of this licence will leave around four million euro in families’ pockets.

In this budget expenditure in the social sector will increase by €37.9 million to €1.02 billon.

Widowers or widows who remained entitled to a fixed rate of the widow’s or widower’s pension after remarrying will not lose this pension after having been remarried for more than five years.

As from 2012, disabled persons who receive a severe disability pension will be able to work and earn up to the minimum wage without losing any of their pension.

For the past 5 years, when a person who received a severe disability pension got married, they did not lose the pension because of their spouse’s income for the first five years of marriage. That limit is now removed so that a severely disabled person who gets married never loses their pension because of their spouse’s income.

Increase in allocation to the agency SAPPORT for it to open a new branch in Pembroke, where disabled persons will be given more training and work experiences.

At present, the National Commission for Disabled Persons is finalising a report about the development which is needed in this country for severely disabled persons to have the required support not to become institutionalised. For this sector to carry out the necessary developments, the Government is allocating the sum of two million euro over a five-year period, with this year’s sum being €400,000.

Expenditure in the health sector to grow by €37.6 million a total expenditure of €415.9 million.

Agreement reached with the private sectorto carry out proceedures, particularly on PET scans, operations such as cataract operations and others, so as to continue decreasing the waiting time. In the coming year, Government will also focus on hip replacement operations.

Government entering into agreements with consultants who work in some of the best hospitals in Europe for them to offer their services in Malta. This will enable the Government to extend the number of services that are offer in the hospitals.

Changes to the 5th and 2nd schedules being made to enable those who suffer from chronic conditions to start benefiting from a number of free medicines.

Colorectal screening programme will identify cancer in its earliest stage so as to avoid related deaths. The Oncology Centre at Mater Dei Hospital will cater for 74 in-patients and 22 more patients in day care. This Centre should start receiving its first patients in mid-2013.

Pensioners to get full cost of living increase. They will also get a new €300 a year grant if aged over 80 and living in their own home or with their family. This initiative will cost €3.5 million, and will benefit nearly 12,000 elderly persons. Through this grant and the full cost of living increase, every elderly person over 80 will receive an increase of over €10 a week.

VAT on private nursing and home help offered by the private sector to the elderly in their private homes will be removed as from the 1st of January 2012;

the income tax exemption for relatives of elderly people who live in private nursing homes will be increased by €500 euro to €2,500;

service pensions will increase by €200; and

elderly and persons who are tax exempt and who pay 15% withholding tax will start receiving refunds of tax paid without completing a tax form.

A national dementia strategy. This strategy gave rise to a number of important initiatives, among which:

• A new block at St Vincent de Paule with dementia friendly wards;

• Training for workers and carers working in areas related to dementia;

• Day Respite for patients in the community suffering from dementia;

• Services from the memory clinic at the Karen Grech Hospital for people suffering from dementia;

• A helpline for use by the public, with the collaboration of the Malta Dementia Society; and

• The publication of an educational children’s book about dementia affecting relatives. Government is committed to keep providing care and to help those suffering from this condition. Government are allocating €200,000 in order that medicines for the treatment of dementia can be provided free.

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