Successful results

Last Monday, Prime Minister Lawrence Gonzi presented the budget for 2008. After months of consultative meetings with constituted bodies and society in general, the end result was a budget that will affect positively all strata of society.

This budget document will lay the foundation stone for our 2015 vision. The measures presented are socially oriented and reflect the positive results we achieved in the past years. Once again, income tax rates have been reduced and children's allowance benefits have been extended to everyone.

With the new income tax thresholds, people will be making further savings. With the thresholds pushed up by Lm1,400 for single declaration and Lm2,000 for joint declarations, citizens will be saving up to Lm230 for a single computation and up to Lm341 for a joint computation. Once again, these are measures that confirm the government's commitment to a better standard of living.

This measure will leave an estimated Lm12 million in our families' pockets, which means that together with last year's reductions the government would have forgone some Lm24 million in income tax in two years.

The benefits for families do not stop there. Families that would like their young ones to practise a sport will also be assisted. Aware of the importance of having a healthy lifestyle, the government will encourage parents to send their children to sports activities and, for this, they will receive a tax rebate of up to €100.

Also directly affecting families with children are the amendments made to children's allowances. All children aged under 16 will be eligible for a children's allowance of at least Lm107, irrespective of the household's income.

Until now, households earning more than Lm10,300 were not entitled to this benefit while the minimum benefit was of Lm52. With the measure announced, an additional 25,000 children will be entitled to the allowance while the minimum benefit will go up to Lm107.

If we had to take into consideration and put them into a practical example, a family of four, that is two parents and two children, which make a joint income tax computation of Lm4,500:

• Will not pay income tax.

• Will receive €200 a year if their children practise sports (€100 per child).

• Will benefit from an increase in the children's allowance.

All this will result in further budget increase in our family's pockets.

To encourage young people to purchase their first property of residence, the government will be providing a subsidy on mortgages whenever the central intervention rate exceeds the 3.75 per cent mark.

Whenever the base rate increases, it reflects on the monthly mortgage repayments. A couple with a mortgage of Lm35,000 on a 35-year repayment deal would see its monthly repayment rise from Lm103.32, with a central intervention rate of 3.5 per cent, to Lm114.47 when the rate reaches 4.25 per cent.

The government has also raised the threshold for the stamp duty when purchasing first property of residence. The ceiling has been raised from Lm35,000 to Lm50,000; this means that property valued at up to Lm50,000 will be at 3.5 per cent, resulting in more money in young people's pockets.

Another measure that affects families in times of difficulty is the removal of tax on transfer of property to a spouse in case of death. In last year's budget, the exempt band was raised from Lm10,000 to Lm15,000 while the rate paid on the balance over this threshold was reduced from five per cent to 3.5 per cent. This year, the government went a step further and wiped it out completely. The surviving spouse will now not have to pay any succession tax.

Another social group that will be benefiting fully from the budget are pensioners. From next year, all pensioners will receive full cost-of-living increases. Elderly people who make use of residential services will be exempted up to €2,000 a year. Retirees who wish to continue working will be able to do so without losing their pension.

This budget further consolidates the commitment made by the government to give our families a better standard of living. At the same time, the government was prudent enough not to hinder the goals that we achieved in the last years.

The measures presented reflect the economic achievements attained over the last three years while at the same time pave the way for further economic growth.

This budget was described as a prudent and responsible budget, measures that encourage further job creation and further investment. The tax reform will boost the workers' purchasing power and this will further generate momentum for economic growth.

Once again, the government led by Dr Gonzi presented a budget that left more money in Maltese families' pockets, invested further in our country's potential while safeguarding the successes achieved and paving the way to further goals.

Undoubtedly, this budget will leave the Maltese citizen in a much better position both financially and socially. What leaves me dumbfounded is the fact that the Malta Labour Party did not acknowledge this fact and tried to play down the positive measures.

What is most ironic is the fact that this is the same MLP that in less than two years burdened the Maltese people with no fewer than 33 taxes. Facts are facts and can never be denied!

Mr Casa is a Nationalist member of the European Parliament.

david.casa@europarl.europa.eu, www.davidcasa.eu