‘Defend Malta’s turf’ on financial services and iGaming - Finance Minister

The country must defend its turf on financial services and iGaming while finding new methods of growing the economy, Finance Minister Edward Scicluna said.

Scicluna was addressing a business breakfast as part of the Government’s pre-budget consultation process. He said that by using the budget as an economic tool, the government has managed to implement bold measures which are leaving a positive effect on the country and on people’s overall wellbeing.

Scicluna said that the country is currently reaping the benefits of the government’s philosophy of making work pay. He added that the government sees tax on work as a burden to the economy and shifting the tax onto consumption has helped in encouraging people to join the workforce. This together with generous in work benefits, free childcare as well as tax credits has driven the country’s recent economic success and makes for a positive outlook for the coming year, with debt expected to fall below 60% of GDP

Pointing towards employment statistics rather than GDP, Scicluna emphasised that the economy is in good shape and while growth is expected to taper off slightly in the coming years a strong economic performance is expected, especially when considering projections for other countries as well as the EU on the whole.

On social benefits Scicluna said that the government, through its previous budgets, had sought to change a situation which paid people to refuse work and remain on benefits.

“People on benefits went down in mid 2014 and has been coming down every since. For any tax payer who had given up on seeing a reduction in this area this is a major breakthrough,” the minister said.

He added that as of January 2016, 1400 persons were no longer on social assistance and 2000 families were registered on the tapering of benefits scheme.  This he said was producing significant savings and was giving space for maneuvering to the ministry responsible for social policy.

On the issue of poverty, Scicluna stressed that each budget has been evaluated from an income distribution perspective. He said that after seeing the rise in poverty stop in 2013, an appreciable decline could be seen in 2014 and while data for 2015 and 2016 were not yet available he expected that it will decline further once the data is available.

Scicluna also explained how the strategy of supplementing the minimum wage with in work benefits was helping families experiencing a number of economic burdens.  In this regard, the percentage increase in disposable income was highest in lower income brackets as was the impact of increasing the minimum pension rate.

“When combined, the overall effect we’re seeing is that these measures are giving more disposable income to lower income families,” he continued.

Moreover, Scicluna said that investment was up after having previously been declining. He said that inflation was also up however if this stays at around 2% it will be positive for the country’s debt as deflation was currently hindering the economic revival on a European level.

When asked about an increase in the minimum wage the minister pointed out that this was not in fact a government benefit and would only be increased if there were indicators showing that the economy needed it.  Instead, he said, the government will continue with its policy of supplementing different sectors according to the needs of the country.