Finance Minister Prof. Edward Scicluna, presented the Budget 2014 in Parliament this evening. This is the Labour Party’s first Budget in the 12th legislature.

The Governement said that the Budget for 2014 is presenting the policies of the new Administration aimed at addressing the sustainability of the country’s public finances. Raising employment growth remains very high in the agenda of Government with measures being proposed to support employment creation as well as to make work pay.

“Investment in human capital is also key in determining the employability of the workforce. In this regard, Government is introducing specific labour market programmes addressing the needs of specific groups in society, include those within the Gozitan labour market, it continues to support the number of persons attaining tertiary qualifications, with a special consideration to eliminating mismatches between labour demand and supply.”

“Government is also introducing measures to support small and medium enterprises in creating employment and in sustaining the competitive profile of the Maltese economy, particularly in Gozo. In this regard, special consideration is being accorded to cheaper and greener energy. At the same time, traditional sectors such as agriculture and fisheries are also being assisted in light of their environmental and social sensitivity. Due consideration is also being accorded to environmental protection.”

Some of the main highlights that have been announced in Budget 2014 are as follows:

As from March 2014, household energy bills will go down by 25% while water bills will decline by 5%. Every family will be given the opportunity to have an energy audit, on a voluntary basis. The household would then be given advice on how to reduce consumption.

An incentive scheme will be adopted to help people upgrade their residence to one which is more energy efffcient. This measure will lead to a reduction in the domestic energy use which subsequently reduces the amount of CO2 emissions.

Street lighting in Gozo is a pilot project which entails the installation of intelligent street lighting. This is only the initial stage of a nationwide project that will lead to the replacement of all street lights in Malta and Gozo. Government has allocated funds for this proposed EU co-financed project. This project will contribute to increase national energy efficiency and will ultimately lead to a reduction in CO2 emissions. Furthermore, savings are expected on maintenance since the lifetime of LEDs is about 20 years as opposed to the lifetime of current bulbs which ranges from 3 to 4 years.

Government will be conducting a Cost-Benfit Analysis of the Malta-Sicily gas pipeline. This project has been classfied as a Project of Common Interest (PCI) by the EU. Government has allocated funds for this proposed EU co-financed project. This financial analysis will ultimately be used as the basis on which a decision will be taken as to whether the proposed connection of Malta to the European Gas Network through a pipeline to Sicily is feasible or otherwise.

Malta Oil and Gas Corporation The Government will be establishing a Malta Oil and Gas Corporation. This will be done so as to provide an infrastructural framework for the development of an Oil and Gas industrial services industry in Malta. This corporation will be the Government’s leading agency in this regard, and will be responsible for the implementation of the Government’s needs and plans for the purposes of oil and gas exploration.

Free childcare centres will be set up in order to encourage Maltese women to enter the labour market or continue working while their children are being taken care of free of charge.

In line with the Government’s Commitment to introduce more incentives to attract more women to either return or enter into the labour market, the ‘Breakfast Club’ service will be introduced. This service will be run by the Foundation for Educational Services (FES). It aims to provide a one hour care service before the school opens. It will be offered during school days. This initiative will not be rolled out nationwide during 2014. It will be phased in gradually.

A pilot project to introduce the ‘One Tablet per Child’ initiative will be launched in line with the National Literacy Strategy. The pilot project will study both the hardware and software to test educational solutions. In 2014 a select number of schools will be participating in this pilot project with the support of product and service providers from the ICT industry.

Persons in receipt of social or unemployment assistance for more than five years who start a full-time course will not lose the said assistance. This measure is intended so that those persons in receipt of social or unemployment assistance for more than five years and who embark upon a full-time course would no longer lose their right to such benefits while undergoing their studies.

This measure will thus not only encourage lifelong learning but it will also enhance the employability of these individuals. This measure will enhance the employability of persons who are not in employment and who are receiving social or unemployment assistance.

An Employment Aid Programme (EAP) will provide employment aid that covers up to half of the wages to Gozitan employers. The scope of the initiative is to promote the recruitment of disadvantaged and/or disabled persons.

In line with the Youth Employment policy, ETC will be launching a Youth Entrepreneurship Scheme with the aim of promoting entrepreneurship amongst youth. This initiative will provide training and support in preparation for entrepreneurship and setting up of cooperatives. This will be achieved through the provision of specialised training aimed at passing on the relevant skills and information required for them to be fully prepared to embark on setting up their enterprise or cooperative. In addition, the participants will benefit from mentoring services and monetary grants.

The Government is allocating money on a three-year programme for the maintenance and upgrading of schools. Furthermore, Government is also allocating money for the building of five new schools.

The Government will continue to deliver its promise of providing stipends to students repeating their scholastic year.

Stipends will be offered to students undertaking veterinary courses abroad.

The Government will institute a regular increase in stipends for students according to the annual Cost of Living Adjustment (COLA) on a pro-rata basis as from 1st January, 2014.

The Government is going to provide grants for post-doctoral students.

The Government intends to begin consultation with teachers’ union in the future regarding how to provide a year’s Sabbatical to teachers.

Government is committed to extend NSO services to Gozo. In this context, a new NSO branch will open in Gozo.

The Government will be issuing new ID and eID cards.

The Government is going to initiate discussions by issuing a white paper where all the relevant stakeholders will give their opinions and suggestions on the possibility of extending opening hours and increasing the number of opening days of retail outlets. Furthermore, the Government also wants to discuss the possibility of introducing retail outlets that are open during the night.

A feasibility study on transport will be undertaken to evaluate the possibilities of underground and monorail services.

The Government will be reducing the income tax rate for those income earners who earn between €19,501 and €60,000 from the current 32% to 29%.

The excise on cigarettes and tobacco, fuel, alcoholic drinks and beer, cement, bunkering fuel and car licences is expected to contribute to an increase of €21.4 million in revenue. In spite of this, the price of diesel is guaranteed to continue remaining stable until the end-of March 2014. Negotiations are taking place regarding the price of petrol and up till now the price will only go up by 1c per litre from January 2014. Licences for cars that were registered after 2009 with CO2 emission of 0 to 100 grams will remain the same while the other car licences will increase.

The Government will fulfil its pledge to refund tax paid on vehicle registration. For this purpose, the Government has allocated the sum of €2.5 million so that, as from next year, all persons who paid this tax receive a refund. The process will be carried out over a period of seven years, and the ex gratia payment will be provided to those persons who registered a vehicle for personal use between 1st May 2004, and 1st May 2008. The details of the measure will be announced shortly.

The tax on auctions is going to be abolished.

So as to ensure that households have access to more disposable income, the Government will broaden the tax band for Parent Computation from €9,300 to €9,800. In this way, households will benefit from an increase of income of €75 per week.

Helping the long-term unemployed to join the labour market The Government is going to help the long-term unemployed to join the labour market by ensuring that those entering the labour market will not loose benefits at the rate of 100 per cent. Extension of 15 per cent self-employed contribution to pensioners. Currently the pro-rata 15 per cent self-employed contribution is only available to self-employed part-time women whose annual earnings from self-employment do not exceed the minimum earnings threshold. This measure is intended for part-time self-employed pensioners who will be given the option to pay a 15 per cent pro-rata self-employed contribution given their earnings from self-employment do not exceed the minimum threshold pertaining to the lowest contribution due.

Single parents on social assistance currently are not incentivised to improve their employability prospects or go to work other than the fact that the first €54 per week from employment are not taken into consideration when calculating the means of single-parents to determine their right to and rate of social assistance. Through this measure, single parents on social assistance who choose to enhance their employability prospects by undergoing intensive training or full-time education will be given credit, ranging from €200 per annum for vocational basic training to €1,000 per annum for full-time education. Parents may also benefit from free childcare if needed.

The preferential rate of 15 per cent will increase from a present threshold of €7,000 to €10,000 for those working part-time, and from €7,000 to €12,000 for those who work part-time as self-employed. For those businesses that employ two part-time workers, the 15 per cent rate will still be applicable.

From 2014, principle breadwinners whose wives are over forty years of age and have been inactive for more than five years but are going to start employment earning a tax-exempt wage, will benefit from reductions in income tax as the income of the wives will not be considered when using the joint tax computation. “This measure will encourage more women to enter in the labour market.”

The Government is committed to introduce measures to reduce precarious work.

The Government is introducing a series of health reforms that ensure better use of community care facilities to release pressure on the national public hospital.

The Government is going to establish a Patients Charter and National Health System Strategy which will stay in effect until the year 2020.

The health centre in Victoria Gozo will be modernised and located near the General Hospital in Gozo. In addition, clinics are going to be devolved to Local Government.

The Government will continue to strengthen further the National Strategy on Obesity and sexual health. It is also going to launch a National Plan on diabetes while revising the Food and Nutrition Policy.

Government is proposing a travel reimbursement scheme for Gozitan children undergoing cancer treatment at Mater Dei Hospital.

Government will proceed with the reform underway at Gozo General Hospital by upgrading the outpatients’ wards, performing the necessary infrastructural works, the opening of a new kitchen and the maintenance of the electrical system. This year, Government will introduce chemotherapy treatment services in Gozo. Government will also be opening a Day Care ward in Gozo and will also be offering new services such as the pain clinic, the rheumatology and urology.

The Government will introduce the new IVF programme.

Patients that suffer from mental illnesses will be treated in the community enabling these patients to continue with their social life under the supervision of healthcare professionals specialised in this sector. The Government will be modernising Mount Carmel, strengthening a Young People’s Unit (YPU) and improving mental health services in the community.

This year, Government will be allocating funding for the purchase of new medicine that are not available at present for dealing with conditions such as Multiple Sclerosis (MS), Attention Deficit Hyper-Active Disorder (ADHD) amongst children and widening the choice available of medicines including the treatment of diabetes.

A new investment programme on emergency vehicles will be undertaken.

AWhite Paper will be issued on medicine management and the implementation of Pharmacy Of Your Choice.

Government will be launching an Investment Registration Scheme, whereby individuals residing in Malta who hold eligible assets without the necessary exchange control permits and/or, without declaring the relevant income (including capital gains) for the purposes of the Income Tax Act, will be given the opportunity to regularise their position.

Tax evasion awareness campaign will be announced.

Third Pillar Pension will create an additional voluntary pension, thus increasing the quality of life for senior citizens. The actual measures will be introduced after the consultation process with interested parties will be concluded.

An evaluation will be carried out with a view to address the pension situation of those persons who were performing duties with Government Departments before 1979 but were employed directly with Government after 1979.

For 2014, the COLA payment will be €3.49. With an inflation rate below 2 per cent, this represents a real increase for all families.

Persons on the minimum wage who receive the COLA will be exempt from paying tax on the increase. This will apply equally to pensioners who at present are not paying tax.

The Government is actively working to launch the LEAP project which is an EU initiative to tackle poverty. The aim of this project amongst others is to support and further strengthen voluntary non-governmental organisations (NGOs).

The Government is going to extend the limit from €1,300 to €2,000 in tax credit for parents sending their children to private childcare centres.

To date, the amount of service pension not taken into consideration for Social Security pension assessment purposes is €1,266. As from 2014, this amount will be increased by €200 to €1,466.

First-time buyers that are going to finalise their contract in 2014, will be exempt from paying the 3.5 per cent duty on the first €150,000 of the property bought.

The €300 grant to the elderly will be extended to also cover senior citizens over 75 years of age.

The current weekly rate for a Disabled Child Allowance is €16.31 per eligible child. The measure is intended to increase the weekly rate entitlement to €20 per eligible child.

A new scheme will come into effect whereby a one-time grant will be given to every person who scraps an M1 vehicle with an age of 10 years or older and registers a New M1 passenger vehicle with a CO2 of not more than 150g/ km and having a length of not more than 4460mm. The grant will be on a first come first served basis and will be higher for those vehicles which pollute the least. A grant of €900 will be given for cars that emit up to 100g/km of CO2 , €700 for cars that emit between 101 and 130g/km of CO2 and €500 for cars that emit between 131g/km and 150g/km of CO2 . Vehicles registered must be for private use only and the scheme will be applicable as from the 1st January 2014.

The vehicle conversion scheme, initially introduced in January 2013, is being extended with slight technical modifications. The first 500 vehicle owners who apply for the scheme will still be given a €200 grant to convert their vehicles to LPG. This grant is subject to a number of conditions and standards which the conversion process must adhere to and is limited to two cars per household.

A support scheme is being launched to facilitate the digital transition of cinemas in Malta and Gozo. In addition, the scheme aims to increase the circulation and viewership of European audiovisual works and seeks to encourage further accessibility of audiovisual works to a wider public. To support the digital transition of cinemas in Malta and Gozo and to increase the accessibility of audiovisual works.

A white paper is going to be presented with the aim of abolishing animal circuses that tend to abuse certain animal species by 2015 from Malta. Construction works will initiate on the building of an animal cemetery.

The Minister said that the Government is committed to green initiatives and to the reduction of CO2 emissions. In this regard, a number of measures will be taken in order to continue with Government’s drive in this area. These include the Wild Birds Regulation Unit and a sponsorship for the United Nations Environment Programme/ Mediterranean Action Plan (UNEP/MAP) meetings, as well as updates to the Waste Management Plan and to the National Sustainable Development Strategy. Government will also provide a budgetary allocation for the launch of an Environment Upgrade Campaign. In addition, investment is underway on making public buildings energy self-suffcient.

Gozo

Government has reviewed the current work practices with a view to identify work in Government Departments and entities that may be transferred to Gozo. The necessary preparations are being carried out to transfer such work to Gozo.

The Ministry for Gozo will also be setting up a Gozo Regional Youth Council This council should create a new framework and give a new voice to Gozitan youths.

Government will embark on a project to build a new Law Court in Gozo which is estimated to around €12 million. This project will address the space and accessibility problems of the present Law Court.

Government has entered into a contract with the Gozo Curia. Saint Joseph Home will be restructured, embellished and expanded, thus creating facilities and recreation opportunities for the elderly. The home will have 70 laid out spaciously rooms and 140 beds. This project will contribute to significantly increase the quality of life of residents.

In order to increase employability, the Government will be providing a budgetary allocation for the launching of a Gozo.Business Promotion and Incentive Framework.

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