Mark Micallef
Budget: How did you fare?
A week after the budget was announced, a number of people are unclear as to whether they are better or worse off. Mark Micallef takes a look at five scenarios.
Single
A single 30-year-old man, saving to get onto the property ladder with a home costing between €120,000 and €150,000.
He earns just over €16,300 and drives a small car with a 1.4 litre engine which he bought seven years ago.
For the time being, he rents a small, one-bedroom apartment and lives alone.
He stands to benefit from the new scheme for first time buyers.
After the Budget
Income tax revision - €102
COLA - €212
Water and electricity bills - (€93)*
Circulation tax: used to pay €93, will pay €114 - (€21)
Fuel bill: used to pay €842, will pay €856 - (€14)
He is now better off by - €186
Couple
A couple in their mid-30s have just moved into the new three-bedroom flat. It cost them around €165,000 and they currently have a monthly loan repayment of €570. He drives a fuel-guzzling 12-year-old SUV, with a 2.5 litre diesel engine, bought second-hand three years ago, which he uses mainly for work. She drives an economical seven-year-old small 1.2 litre engine car. He earns just over €23,000 as a property negotiator, while his wife, a government employee, earns around €14,000.
After the Budget
Income tax revision: him - €153
Income tax revision: her - €58
COLA (together) - €424
Water and electricity bills - (€208)
Circulation tax: he used to pay €349, will pay €581 - (€232)
Circulation tax: she used to pay €70, will pay €75 - (€5)
Fuel bill: He used to pay €4,160, will pay €4,351 - (€191)
Fuel bill: She used to pay €782, will pay €795 - (€13)
Worse off - (€14)
Family of four
The couple are in their mid-40s and can look forward to pay off their home loan in three years time.
They both work. He earns some €35,000 working as an accountant for a medium-sized company, while his wife earns around €19,500 working as a teacher.
He drives a brand new 1.6 litre petrol car while she drives an eight-year-old, 1.8 litre diesel engine family car. Both their teenage sons attend private schools.
After the Budget
Income tax revision: him - €153
Income tax revision: her - €153
COLA (together) - €424
Water and electricity bills - (€350)
Circulation tax: He used to pay €104, will pay €120 - (€16)
Circulation tax: She used to pay €175, will pay €286 - (€111)
Fuel bill: He used to pay €714, will pay €728 - (€14)
Fuel bill: She used to pay €720, will pay €724 - (€4)
Better off - €235
Family of five
The couple are 50. He works as an engineer with a company which is facing trouble. His wife used to do some part-time work but is now mostly dedicated to their 10-year-old daughter, who is disabled. They also have a 20-year-old son who is at university and a 14-year-old daughter. His business leaves the household with around €47,000. He drives a large, seven-year-old 2.5 litre diesel family-van, while his wife drives a small, 10-year-old 1.5 litre petrol engine car, which is also used by the son.
After the Budget
Income tax revision - €153
COLA - €212
Water and electricity bills - (€400)
Circulation tax: He used to pay €349, will pay €489 - (€140)
Circulation tax: She used to pay €93, will pay €141 - (€48)
Fuel bill: He used to pay €1,440, will pay €1,506 - (€66)
Fuel bill: She used to pay €1,000, will pay €1,017 - (€17)
Worse off - (€306)
Pensioner
Widower, aged 73, earns a pension of around €10,000. He lives in a townhouse on his own.
He stopped driving last year and figured he could do without the extra expense.
The only 'treat' he just cannot do without, despite doctor's orders, are his cigarettes.
After the Budget
Income tax revision - €53
COLA - €212
Water and electricity bills - (€93)
Cigarettes excise increase - (€73)
Better off - €99
* Figures marked in brackets denote a shortfall.
Figures are calculated on an annual basis.
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In Discussion
16 Comments
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Norman Stivala
Nov 23rd 2008, 20:16
Dear Sir,
Is this the typical pensioner. I am also a pensioner who fortunately still have a wife living with me (she has no pension of her own so we make do with mine). I still drive an oldish car, don't smoke, have some hobbies and try to make the most of what I may have left of life. I would like someone to enlighten me how I will be better off by 99 euro after I pay the new car licence, new petrol cost, and last but surely the most the new water and electricity tariffs.
Norman
J.Pace
Nov 14th 2008, 11:57
Get a real couple, with a normal wage of earning per person of Lm7500 = 17482 euro. and redo the calcutaions.
Try to ask new married couples how they are passing the month, with an average wage, paying loan (10x god now it is decreacing), trying to fill up the house, pay bills, car insurances,new car tax, fuel rising, buying food, paying W&E, cannot use roof. How these are passing and managing thier lives.
And also did you asked those people who finished with 4day week? how they will pass it now?
And also having to pay the new car emmision tax on the old body of the car and not on the new fitted engine.
lGalea
Nov 11th 2008, 23:22
Simon Cassar
Since zeros are worth nothing, the writer conveniently forgot to add a few of them to his figures.
George Debono
Nov 10th 2008, 17:10
lol !
1. cola is taxed @35% for those saving €153 in income tax.
2. 1.6l petrol engine - €13 per week only ! i'm impressed!
3. food ? cigarettes? beer?
Emmanuel Bonnici
Nov 10th 2008, 11:42
I totally disagree with yesterday's article entitled "How did you fare". Without entering into too many details of electricity bills, petrol consumption per year, taxes, etc, my only question is "How many of us earn a salary of 35,000 Euros yearly?" We're talking an average of LM1250 monthly - not a joke? A couple with two children, and earning between them an average of 54500 Euros yearly, definitely should not be taken as an example, and compared with the rest. If a family of 4 is earning this sum, and both bread winners are (as we say in Maltese) "bil-ghaqal" - know how to manage their money, this family will surely be one of those few who will remain still, much better off then the rest. Sorry, but this example is surely not realistic.
George Debono
Nov 10th 2008, 11:01
I am a teacher with a private school and €19,500 is what an average teacher earns gross. In fact, all the figures seem to be quoted as gross. Roughly, that leaves you with some €14,000 net. Even the government employee cited in the couple example earning €14,000 is roughly there. Again net that person would be earning something like €10,000. The examples may not be representative of the largest swathe of the population but what's interesting is that both the high earning couple and the family of five - both at the peak of their productive potential - are hit badly.
George Abdilla
Nov 10th 2008, 10:09
These figures are certainly not representative of the average person in the street.
in my case family of 4:
wage cumulative - 30K euro
Cars: family landrover 30 year old with an 8 year old engine - taxed as a 30 year old - over €700
3 yr old For Fiesta 1.3 petrol,
fuel bill - Fiesta - 3 months ago - €28 to € 30 to fill up a tank. last Monday € 50! please note international fuel price has gone done by some $80 in past 3 months!
water and electricity - installed energy saving light bulbs and solar water heater 10 yrs ago, Current bill is killing us!
kids - 1 church school donations must be given and not cheap, transport cost has went up. other in gov primary. uniform costs an eye!
Food - prices are all the time up.
End of the day, before this budget we were managing to save some €500 a year, with this budget, we will surely be eating form our earnings!!
get real MATE!
acutajar
Nov 9th 2008, 21:34
Absolutely unrealistic figures.
Four-person, five-person households and pensioners cannot possibly have those earnings. Any what is this fixation with both parents working or having children attending private schooling as in your hypotethical case of a four-person household? Wake up: there are families where only the husband or just his wife are the breadwinner!
And don't you think that there are couples where both parents are under 40 and have either one or two kids!
Simon Cassar
Nov 9th 2008, 20:38
These values are highly unrealistic.Last january I used to pay a mere 50 euros per month for my 1.9 diesel car. Now I am paying more than 70 euros per month for the same distances (same job, same lifestyle) ie 20 euros more per MONTH and you say there is a fuel increase of about 4 euros YEARLY???!!! (family of four) You must be kidding!
I Abela
Nov 9th 2008, 19:13
Does the writer know that property negotiators work as self employed? So they don't receive the COLA anzi they pay VAT on what they earn? Also does the writer know that the average wage of a teacher is less than 2/3 of what is quoted as €19,500 and an accountant earning €35,000 is simply unrealistic? Also does the writer know that fuel and energy prices are going up also for the shops? Now can the writer tell us how will the inflation of day-to-day items such as milk, bread, butter, ham, cheese, etc etc affect the total cashflow of the mentioned scenarios?
natasha cassar
Nov 9th 2008, 18:52
From where did you get these figures? I ask myself....
We are a family of four. My husband works full time as a printer and I work as a clerk, where between us we earn a mere 23,000 euros after tax, (not as you mentioned 35,000 euros) I drive a 9 year old 1.9 diesel and he drives 20 year old 1.1 petrol. We cannot afford to change cars as it would be too expensive right now. How can you base your statistics on accountants and teachers, or any acedemic, when only a small percentage falls under that category. Please be realistic.
James Sultana
Nov 9th 2008, 18:09
With the increases announced in the budget, unleaded petrol went up by 3.43%m while diesel went up by 2% ... yet this article states some ridiculous increases for the fuel consumption.
Also, how can he be so sure of the rise in electricity bills, considering that the briefly publicised prices will not be paid by anyone since you either consume 1499 units and get a reduction, or else consume 1501 and pay a 7% penalty ?
Oh .... and we are not yet considering the 200% increase in gas prices to come around soon !
c galea
Nov 9th 2008, 17:18
I glanced at these numbers and will simply comment, that the COLA is meant to counter LAST YEARs' cost of living rise , not the coming year !
Also the COLA is taxable at say 25% and then you have to pay 18% Vat.
Can anyone predict the rate of inflation following these fuel price hikes ????
Remember that OIL is now ONLY $60 a barrel , what will happen if it returns to $100 a barrel??
Pull my other leg Mark !
c galea
Nov 9th 2008, 17:15
I glanced at these numbers and will simply comment, that the COLA is meant to counter LAST YEARs' cost of living rise , not the coming year !
Also the COLA is taxable at say 25% and then you have to pay 18% Vat.
Can anyone predict the rate of inflation following these fuel price hikes ????
Remember that OIL is now ONLY $60 a barrel , what will happen if it returns to $100 a barrel??
Pull my other leg Mark !
F J Brincat
Nov 9th 2008, 12:42
One variable that is very difficult to calculate and therefore take into consideration is the rise in prices especially foodstuffs, other items and services brought about by the increase in utility tariffs and fuel.
So, in around 3-4 months time I will know whether I am better or worse off.
Keith Chircop
Nov 9th 2008, 11:30
With regards to the family of four who are better off with the new budget...
A man earning €35,000 (Lm15000) per year.
His wife earning €19,500 (Lm8400) per year (a teacher? LOL).
Definitely not the average family of four.