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Budget reactions, mostly positive, but concerns over traffic, Gozo properties tax cut and power tariffs

Civil society has welcomed the Budget measures that improve pensions and social benefits for low income workers, but concerns have been raised about inadequate measures to tackle transport. There has been a mixed reaction to plans to reduce tax on all property purchases in Gozo.

Business organisations regretted that power tariffs have not been reduced and the Developers Association warned that the tax on building materials could harm 'small consumers'.

The GRTU said the increases in pensions and allowances for low strata people would increase disposable income and generate economic benefit across the board.

Alternattiva also welcomed the benefits being given to low income people but called for a revision of the basket on which the minimum wage and the cost of living are calculated.

The Chamber of Commerce said the €1.75 cost of living adjustment, while not an unaffordable figure for employers, departed from the standard mechanism in that it included an anticipated payment.

With a view to avoid similar arrangements which could harm competitiveness, the Chamber called for adjustments to the formula used and an updating of the Retail Price Index.

Transport

The GRTU welcomed the tax deductions to employers that organise free transport for their employees and the incentives for the building of underground car parks.

It regretted, however, that measures addressing organised school transport were left out.

Alternattiva said investment in public transport was not keeping up with the problems of the sector. The emphasis on new roads and junctions rubbed salt on the wound, when the true problem was the exaggerated number of cars on the roads. It called for incentives for electric bikes.

Environment NGO Flimkien Għal Ambjent Aħjar said the budgetary measures on transport lack vision and commitment. "While subsidising workplace communal transport initiatives is positive, the widening of roads and the building of carparks will only increase traffic, not diminish it. Such capital projects yet again put the interests of developers before the national interest. Promising more bicycle stands is risible when cycling lanes are missing where they are needed most.

"Free public transport for 18-year olds should be extended to all students and coupled with providing more frequent bus trips in order to convince car owners that public transport is a viable option.

"The budget is totally lacking in measures to incentivise the purchase of low-emission vehicles. Instead, the Government continues to encourage the creation of a motorsports track which will continue to fill the air with toxic emissions."

Energy

The GRTU said it could not understand how further reductions to energy bills had not been introduced. It said it had wanted the energy market to be opened up for more operators in a bid to increase competition and reducing cost to businesses.

The Camber of Commerce said failure to further reduce the tariffs could undermine Malta's competitiveness with other countries. 

Family business transfer

The GRTU welcomed the one-year window whereby tax will be reduced on the transfer of family businesses. It asked, however, why this measure has been limited for 12 months , saying this timeframe does not allow for planning and execution. 

Shop opening hours

Commenting on plans for flexible shop opening hours, the GRTU said this was another long-awaited commitment by government which had been dragged from one Budget to the other.  

Tourism

The MHRA - Malta Hotels and Restaurants Association - welcomed plans for investment to support the growth of the cruise-line business; the commencement of works on the new Institute of Tourism Studies; infrastructural investment, embellishment initiatives and improvement in the road network.

It also welcomed the tax credit schemes for renovations in hotels and restaurants but said it had expected specific spending allocations for the immediate upkeep of core tourism areas, such as Bugibba and Qawra, which are in urgent need of serious investment. 

Tax on building materials

Alternattiva said the new duty on building materials should help for this industry to give something back to the country, but it reiterated its call for a moratorium on major projects, especially in areas with a concentration of empty buildings. 

The Malta Developers' Association said that it recognised that in a situation where the construction sector was doing well, those involved in this sector have to contribute to society.

"However, it feels that the introduction of excise duty on imported construction materials will negatively affect the small consumer who is acquiring his first home."

The association welcomed the extension of the tax exemption for first time property buyers, the incentives and subsidies on rents, lower duties on Gozo property transfers and incentives on the building of underground car parks.

Gozo property tax cut pros and cons  

The reduction in duties on property purchases in Gozo - whether as a first home or speculative 'savage' building - would further harm the quality of life in Gozo, AD warned.  

The Gozo Business Chamber (GBC) took a different view on the measure and welcomed it. It said that this measure should be put into immediate effect and not at the beginning of next year, and include all pending promises of sale.

Gozo tunnel and cargo service

The GBC welcomed plans for an extension of Xewkija Industrial Estate, a second fibre optic cable to Gozo and geological studies  and a call for the design, building and operation of the tunnel between the two islands.

Front Favur Il-Mina said the call for proposals for a fast ferry service between Valletta and Mgarr should be issued without any further delays.  

It looked forward to the call for proposals for the design and development of the Malta-Gozo tunnel.

It said that an essential measure which was omitted from the budget document was the reintroduction of a cargo-ferry service  after the service between Mgarr and Sa Maison was discontinued. 

Motorsport

The Malta Motorsport Federation noted a reference in the Budget speech to a Motor Recreation and Education Park and said it would support it.

"Such facility will help our athletes to improve their skills in a safer facility. This project will also generate new form of tourism which will contribute directly in the economic growth with ripple effect across all sectors."

The federation said it welcomes plans for stricter penalties for drink driving and the ban on smoking in vehicles in the presence of children.  

No surprises or shocks

The Chamber of Commerce and Industry said the budget speech has spared major surprises and shocks on private economic operators.

It said it was encouraged by the remarkable rate of economic expansion over the past quarters and the manner in which this is supporting public finance consolidation.

The Chamber welcomed the the tax incentives on voluntary second-pillar pensions, the improved access to finance via the seed-capital for setting up of the Development Bank, tax incentives on dividends from companies listed on the Malta Stock Exchange, tax deductions on employer-schemes for transport of workers, incentives on transfer of family businesses, te attraction of an international accelerator for local start-up companies and a proposal to support companies to facilitate the research and commercialisation of innovative
products and services.

It also welcomed the introduction of lower permitting (planning) fees to industry,
simplification of licencing and start-up procedures for business.

Sick Leave

On the proposal for workers to be able to use their sick leave to care for ill children, the Chamber said this measure needs to be designed and implemented carefully as it may lead to further abuse of sick leave. 

A Budget that recognised social realities - GWU

The GWU welcomed the pension and social benefit adjustments, saying this was a budget that recognised social and economic realities.  

It also looked forward to the public consultation on sick leave entitlement. 

The environment

Flimkien għal Ambjent Aħjar (FAA) welcomed measures to upgrade existing parks and create new ones, especially the plan give Comino the status of a national park. Local Councils and private companies will also be given incentives to develop gardens and open spaces.

"The Budget which has just been announced would seem to include many positive measures related to heritage and environment, however closer scrutiny reveals that many of the announced plans are half-measures consisting of committees to be set up and calls for proposals to be received," the NGO said. 

"Measures to promote the purchase of property by foreigners, fiscal incentives to boost purchases of property in Gozo and a €50 million plan to build social housing; these could have been perfect vehicles to encourage the redevelopment of Malta’s over 42,000 empty buildings. Instead they will almost certainly continue the process of building on precious open spaces," it added.  

FAA said rebates on restoration works for those who buy scheduled or urban conservation area properties were a very positive measure.

Education

The Malta Union of Teachers said the budget listed a continuation of previous initiatives and built on measures taken in recent years in the education sector.

However the budget was short on innovative initiatives.

It said decisions needed to be taken urgently on various issue including measures to attract and increase the number of new educators in the teaching profession which is facing an imminent crisis, and a budget to introduce a curriculum to cater for students with different abilities.

"The union is also disappointed on the fact that beyond the tourism industry there is no provision for a general setup across the board which takes care of accreditation of prior learning to the detriment of many skilled workers. Also, the proposal for a permanent committee on education which would exonerate education from partisan wrangles has not yet been taken on board."

The PN reaction is being reported separately.

Read the Budget text in full in the pdf below. 

Attached files

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