Edward Scicluna is still mulling whether the Labour Party’s income tax refund pledge will be introduced next year as he prepares for the Budget.

The Finance Minister said yesterday internal discussions were still ongoing to determine what the government’s priorities for Budget 2018 would be.

“No decision has been taken yet if the refund system will be introduced now or how it will be spread out,” Prof. Scicluna said after exiting a meeting of the Malta Council for Economic and Social Development.

The PL electoral pledge was to introduce a tax refund system for those earning less than €60,000. The system would benefit even those who pay no tax, with those earning the least benefitting the most.

READ: Muscat lays out details of income tax refund plan

The lowest annual refund paid would be €200, going up to a maximum of €340.

The PL promised to introduce the system gradually, making no mention of when it would start. With the Budget expected on October 9, Prof. Scicluna is now carrying out a wide consultation with ministries and social partners.

Prof. Scicluna said he would have to balance the government’s electoral pledges, the 130 proposals made by the social partners and other matters that cropped up and had to be dealt with. However, he said that the next Budget would focus on the spillover problems caused by above-average economic growth.

Waste management, cleanliness, road infrastructure and rising rents are on the Finance Minister’s agenda.

READ: Budget 2018 to deal with problems of 'robust growth'

“The economy has continued performing well, and it is time to deal with quality-of-life issues and the infrastructure,” Prof. Scicluna said.

The economy grew by 6.4 per cent in the second quarter this year, figures released by the National Statistics Office last week showed.

It continued to outperform the euro area average.

Asked whether the government would use the Budget to intervene in the rental market, the minister said internal discussions were under way.

However, he said that with more than 80 per cent of householders being homeowners, the rent issue was not a crisis.

He acknowledged that there was a cohort of people, mostly young adults, separated individuals and single parents, who were feeling the crunch of higher rents caused by increased demand.

“We have to find solutions, but the major problem is that the rental housing supply has not kept up with demand and this has driven prices up,” Prof. Scicluna said.

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