Targeting better incomes for low-earners and pensioners will be the focus of the next Budget, according to Finance Minister Edward Scicluna.

Acknowledging the criticism the government has been receiving for failing to help the poorer strata of society, Prof. Scicluna was unapologetic for the direction taken over the past two years.

He said the government wanted to address middle-income earners and families with children through tax changes and other schemes like free child care because they formed part of the “productive engine”. Over the past two years it was important to give the economy fresh impetus and generate wealth, he added.

“Now that the economy is performing well it is important for us to look at ways to help lower income groups and pensioners to ensure they also benefit from the wealth generated,” Prof. Scicluna said.

He was speaking at the Finance Ministry as he rolled out the pre-budget document.

Asked whether income tax will be cut, Prof. Scicluna said targeting low-income earners was not best achieved through adjustments of the tax bands. He said various options will be considered, including equity release schemes for pensioners, who were cash poor but had asset rich through ownership of their home.
Prof. Scicluna identified the health and education sectors as the next growth generators.

The Finance Minister said he will shortly present a proposal to Cabinet for the creation of an intelligence task force to target illicit trade from Sicily through the catamaran service. “We need plain clothes officials to monitor and gather information that will then be used by Customs and other entities to take action against perpetrators that unfairly undercut the market.”

He said next year’s target for the deficit would be 1.1 per cent of GDP, a further reduction of 0.5 per cent.

This will create more pressure to control expenditure, Prof. Scicluna said. “But it is not just a question of cutting expenditure but creating innovative schemes that induce people away from benefits and into productive jobs.”

He said the tapering schemes for social and unemployment benefits introduced last year had weaned off some 2,000 beneficiaries, who were now receiving less in hand-outs and more through employment.

The pre-budget document will form the basis for discussion with the social partners and civil society ahead of the October presentation of Budget 2016.

On Wednesday, Prime Minister Joseph Muscat said the Budget would build on those presented over the past two years and would continue to encourage investment and job-creation.

He said the government would not shirk from taking tough decisions which would ultimately help improve the people's living standards.

The pre-budged document is available in full at

Members of the public may also submit their suggestions on the ministry's website. 

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.