Budget 2012 live blog - Highlights

Welcome to MaltaToday's newsblog for tonight's Budget 2012.

22:00 Reactions to Budget 2012 from political parties and social partners:

Labour leader - 'No will to address energy inflation'

Mixed reactions to budget from Alternattiva Demokratika

GWU disappointed by Budget 2012

Employers' association dubs 2012 a 'business as usual' budget

Developers' lobby calls for wider incentives on properties in urban schemes

21:11 PBS now running adverts for government-organised tours of co-financed EU projects in Malta and Gozo...

21:08 The Malta Developers Association said Budget 2012 did not include its suggestion to reduce capital gains tax, and that the increase in excise duty on cement only increases the pressure on a dampened construction industry.

21:02 Pensioners will be given the full cost of living increase. They will also get a new €300 a year grant if aged over 80 and living in their own home or with their family. This initiative will cost €3.5 million, and will benefit nearly 12,000 elderly persons. Through this grant and the full cost of living increase, every elderly person over 80 will receive an increase of over €10 a week.

Additionally VAT on private nursing and home help offered by the private sector to the elderly in their private homes will be removed as from the 1st of January 2012; the income tax exemption for relatives of elderly people who live in private nursing homes will be increased by €500 euro to €2,500; service pensions will increase by €200; and elderly and persons who are tax exempt and who pay 15 percent withholding tax will start receiving refunds of tax paid without completing a tax form.

20:56 No mention of public-private healthcare reform: Fenech says the government will strengthen family doctor service by refurbishing health centre "so that the family doctor will be able to find in the health centres those services which can help him offer the best service to Maltese and Gozitan families."

20:55 Reform of the fifth and second schedules so that hundreds of persons who suffer from chronic conditions, and who so far have no assistance in buying their medicines, will now start benefiting from a number of free medicines.

20:54 Colorectal screening program will identify cancer in its earliest stage so as to avoid related deaths. Oncology Centre at Mater Dei Hospital will cater for 74 patients as in-patients and 22 more patients in day care. This Centre should start receiving its first patients in mid-2013.

20:53 Expenditure in the health sector will grow by €37.6 million for a total expenditure of €415.9 million.

20:52 Around 3,000 families are not homeowners since they live in accommodation built by the Government over land expropriated after the War under a title of possession and use. These will see €1.8 million so that the Lands Department capitalises on the acquisition rent which has been paid over the last decades. Around 2,800 residences in Valletta and Cottonera will be able to purchase the properties in which they reside.

20:47 Pensions and disability

Widowers or widows who remained entitled to a fixed rate of the widow's or widower's pension after remarrying will not lose this pension after having been remarried for more than five years.

As from next year, disabled persons who receive a severe disability pension will be able to work and earn up to the minimum wage without losing any of their pension.

For the past five years, when a person who received a severe disability pension got married, they did not lose the pension because of their spouse's income for the first five years of marriage. That limit is now removed so that a severely disabled person who gets married never loses their pension because of their spouse's income.

Increase in allocation to the agency SAPPORT for it to open a new branch in Pembroke, where disabled persons will be given more training and work experiences.

At present, the National Commission for Disabled Persons is finalising a report about the development which is needed in our country for severely disabled persons to have the required support not to become institutionalised. For this sector to carry out the necessary developments, the Government is allocating the sum of two million euro over a five-year period, with this year's sum being 400,000 euro.

20:42 Removal of television licences: As from next year television licences will be removed. Those with an outstanding unpaid licence will still be asked to regularise their position, and a scheme will be implemented for them to be able to do this and thus avoid paying additional fines. Total savings for consumers will be €4 million.

20:41 Increase in the minimum rate for children's allowance

Increase of Children's Allowance minimum rate by €100 to €350 a year for each child. This represents an investment of €2.8 million.

20:40 Expenditure in the social sector out of national funds this year went up to €989.2 million. In this budget expenditure will increase by €37.9 million to €1.02 billon. Government will grant a COLA increase of €4.66 a week.

20:39 Sports: €100,000 for promising athletes who lose their physical and sporting development because of a lack of time for training during their secondary school years; €120,000 euro for scholarships in the sports sector so that those who show promise continue investing in their sporting skills even abroad; €350,000 euro for the Maltese Council for Sports and Transport Malta so they can work with representatives of motorsport enthusiasts to help in the development of an adequate circuit for training and competitions connected to karting, mini motos, quad bikes, motards, scooters, as well as for the tuning of vehicles which participate in hill climbs.

20:36 €100,000 for youths who learn music in traditional bands.

20:35 James Debono writes on the environmental measures in Budget 2012 here.

20:26 The Old University in Valletta is being transformed into another University of Malta Campus, as an International School for Graduate Studies as well as a Centre for the study of performing arts.

20:25 €22.3 million euro for stipends. At present there are 18,000 students who receive a stipend at University, Junior College, MCAST, and ITS.

20:23 Aid to parents of children who attend private schools by increasing the maximum amount of tax reduction given to parents who pay school fees for their children.
- from €1,200 to €1,300 at the level of daycare, reception and kindergarten;
- from €1,200 to €1,600 at primary level; and
- from €1,600 to €2,300 at secondary level.
This initiative will cost €600,000 .

20:22 Fund allocated to private schools according to the number or registered pupils in this way: €95 for every child in kindergarten, €145 for every pupil in primary school and €170 for every pupil in secondary school. First step of a three-year programme intended to grow in total consultation with the representatives of the operators in this sector. For 2012, increase in allocation for those students who need a learning support assistant in private schools to €400,000.

20:21 Increase in financing of Church schools with additional support of €45.2 million for these schools.

20:20 For 2012 the investment in the education sector will be of €359 million, an increase of €23 million.

20:13 First studies regarding the possibility of a tunnel between Gozo and Malta. "These studies should lead us to have a clear idea of the options which may be considered in order for Gozo to have a permanent link with Malta. This is a long and delicate process which may have a huge impact in the economic and social development of Gozo, and therefore must be made in a way to allow that the strategic option made provides the best long term benefit for Gozo."

20:07 Investment in the maritime infrastructure - Repair work on the breakwater of Marsaxlokk and preparatory work on the Deep Water Quay in Grand Harbour equates to a total investment of €27.3 million. Lift from Lascaris Wharf to the Upper Barrakka to facilitate the arrival to the City centre will cost 2.5 million euro.

20:05 Introduction of a number of incentives related to restoration and conservation works of scheduled buildings in grades 1 and 2, as well as properties in UCAs:

1. Exemption from Duty on Documents on transfership between heirs in order to facilitate the consolidation of the property ownership, with this concession closing on 31st December 2013;

2. A scheme for private individuals who wish to restore their property where a rebate of 20 per cent will be given on the costs of restoration up to a maximum of 5,000 euro;

3. For individuals or companies who invest in the restoration of these properties to sell or rent a concession will be given as follows:

 - Final witholding tax of 10 per cent on income from rent for residential purposes, and 15 per cent on income from rent for commercial purposes; and

 - Final witholding tax of 10 per cent in the case of a sale or the payment of 30 per cent tax instead of 35 per cent on the gain; and

4. A tax credit of 20 per cent on the expenditure that qualifies for restoration of property for the commercial purposes of the company and this will increase to 30 per cent in the case of grade 1 and 2 scheduled properties.
The MEPA will be widening the permitted use for these types of properties so that their use as guest houses, offices, and other commercial premises will be permitted, while remaining compatible and complementary to the residential zones. The benefit applies when the property is being restored and renovated, and not if the property is demolished to be rebuilt.

19:56 New scheme for anyone who wishes to invest in the roof insulation and double glazing. Grant of 15.25 per cent, up to a maximum of 1,000 euro, to whoever undertakes this investment.

19:53 Enemalta Corporation is buying oil for 2012 at more than 99 dollars per barrel, when current tariffs are calculated using a price of 81 dollars per barrel. "However, the Corporation does not need to ask for a revision of the tariffs because of the positive impact that the power station extension of Delimara will have on reduced fuel consumption to produce the same level of electricity."

In spite of the increase in the price of oil by about 30 per cent in the last two years, we will be able to keep the tariffs on the same level of today. This means that the amount of 20 million euro saved is passed on to the consumer.

19:51 Those who disposed of their vehicle and did not inform Transport Malta will be able to regularise their position by paying a penalty of €125. One can decide to scrap the vehicle and pay the same penalty. Whoever garaged the vehicle and did not return the plates to the Transport Authority will be able to regularise his position by paying a penalty of €125 and half the licence payments due. Whoever has a vehicle but has pending payments and wishes to continue using the vehicle on the road will be able to do so by regularising his position, paying the licences due and paying a penalty of €125. The scheme will be open for one year as from 1 January 2012.

19:50 Around 19 per cent of the cars registered during this year were of the type Euro 1 to 3 or older. Registration tax on emissions for vehicles Euro 1 to 3 and older, which pollute more, will increase. Cars with emissions Euro 4 and Euro 5 will continue to pay the same rates currently in force.

Incentive to those who buy a new car which causes less harm the environment while at the same time scrapping the old car. The incentive will amount to 15.25 per cent of the car value according to the make issued from the manufacturer or from the authorised agent of the manufacturer up to a maximum of 2,000 euro. The car needs to be new and with a Euro 5 engine or better with a low level of emissions up to 150g/km and the length must not exceed 4,460mm. The scheme will enter into force as from 1st December 2011 and will remain in force for one year or until 3,000 persons have benefited from it.

19:48 Customs and excise The customs duty on fuel for bunkering of ships outside territorials waters will increase to 5 euro per tonne.

Customs duty on cement will increase by 3 euro per tonne, while minimum excise duty on cigarettes will increase by 5.8 per cent on each packet of twenty cigarettes.

Excise duty on other tobacco products will increase by 8.5 per cent. Regarding mobile telephony, excise duty will remain unchanged but the basic rate will change from tariff to volume.

19:44 Amendments in the part-time tax rules in order to remove some anomalies which were having a negative impact, particularly on pensioners and some Government employees. At present, pensioners working part-time with the Government are not entitled to the 15 per cent rate available to those working part-time in the private sector. This distinction will come to an end, and all these pensioners will now be able to benefit from the favourable rate of 15% on part-time work.

Definition of 'same employer' in the case of public sector employees will be extended since it is currently limiting the benefit excessively. The Government will no longer be considered as 'same employer' if the entities involved are in fact separate. This will enable more workers to benefit from the 15% tax rate on part-time work.

Extension of deadline for the payment of the 15% tax on part-time work from the 15th February until the 30th June in order to give more time for the payment of tax arrears.

19:42 Maternity leave will be increased from 14 weeks to 16 weeks as from next year and this should be increased by a further two weeks in 2013. The extra weeks will be payable from public finances with a fixed weekly rate of 160 euro. Measure will be introduced after a discussion in the MCESD.

19:41 This will mean that married couples with children will save between €150 and €840 in income tax yearly payments. More than 55,000 families will benefit through this measure which will result in a decrease of 10 million euro in government tax revenue.

19:40 This computation will be eligible for parents supporting children who are not gainfully employed up to 18 years of age. If the children are still in tertiary education, this age limit is extended to 21 years.

19:37 Fenech says that fulfiling the PN's 2008 electoral promise is still on the agenda, but going for blanket income tax cuts would cost the economy €40 million - instead the government is introducing a new tax band for parents whose children live with them at home. James Debono writes about the family budget here.

19:31 New law which permits class action lawsuits. This enables consumers to file a single lawsuit to demand both a legal remedy and the payment of damages. We have published a draft and, after the conclusion of a consultation process, we will shortly submit it before Parliament. This right will also be given to enterprises, constituted bodies and registered consumer associations.

Medicines Authority will proceed with the information campaign 'Your Medicines' and with its work to inform consumers and health care professionals about the proper use of medicines.

Aid to consumers who file a suit before the Consumer Tribunal, are asked to pay for the arbiter-appointed expert, and end up dropping the action due to such expenses. 

19:30 Full list of incentives for cultural and creative industries:

€200,000 euro to move National Museum of Fine Arts from its current location to the Auberge d'Italie in Merchants Street.

Malta will be hosting the European Film Academy Awards, which is an important event.

€250,000 in funds will be used for further development of the Maltese film industry

Extension of copyright initiative to cover works protected by copyright, including books, film scripts, music and art. This benefit will consist of a tax exemption on income from copyright.

Added incentive to cultural education by extending the income tax reduction on sports education to cultural education as well. Parents whose children attend courses in cultural and creative teaching institutions will benefit from a €100 reduction on taxable income for costs related to courses given by licensed or accredited schools or teachers.

Exemption from the payment of registration fees for new companies in creative sector as well as on their annual payments to the MFSA for three years.

€40,000 euro for a Public Lending Rights Fund in order for authors and translators of books in Maltese receive appropriate remuneration when their publications are borrowed from public libraries.

Establishment of the Malta Games Fund with an investment of €150,000 euro to develop local industry.

Tax credit scheme to Maltese companies wishing to commission educational or promotional digital games which credit will be granted on the expenditure incurred on the development of the game or on a maximum expenditure of €15,000.

Extending the flat 15 percent income tax scheme for international professionals such as game directors and game designers.

19:16 Half a million euro to a number of festivals and to new art-related activities, like the Children's Arts Festival, a Baroque Music Festival and an arts program related to the open-air theatre in Valletta. Increase in allocations to the National Orchestra, to the Manoel Theatre, to the St James Cavalier Centre for Creativity and to the Malta Council for Culture and the Arts.

19:15 7.7 million euro in cultural entities for the coming year, an increase of nearly half a million euro.

19:13 Industry and tourism incentives in point form uploaded here.

19:03 Extension of fiscal incentives in the financial services and online gaming sectors to three other categories: Maltese with a presitigious career and who wish to return to our country to work in important industrial sectors; to highly qualified and skilled foreign workers who are required for certain industrial sectors; and to those persons who would like to carry out research or market an invention or technology in Malta.

19:02 Three million euro over a three-year period in fiscal incentives to those industries which consume more than 2Gwh per year and which invest in energy-saving measures and in systems which produce energy from clean sources.

19:00 14.7 million euro for incentives to industry, an increase of five million euro on last year.
This past year, 35 projects for factories and companies have been approved so far with an investment of 145 million euro. These projects are expected to create 700 jobs over three years.

18:55 Current unemployment stands at 6.6%, 3.1% less than the European Union average.

18:52 In the first months of this year, employment increased by more than 2.5 per cent, which compares very well to a growth of approximately 1 per cent in the Euro Zone. Since the start of the crisis, only five countries have increased their employment rate: Malta was among them.

18:50 While deficit and debt levels are low when compared to those of our partners in the European Union, our country is still in an excessive deficit procedure. Fenech says Malta remains committed to lowering country’s deficit to 181.7 million euro by the end of this year, or 2.8 per cent of the Gross Domestic Product.

For 2012, the forecast deficit is of 2.3 percent of the Gross Domestic Product.

The income from direct and indirect taxation is expected to be 2.5 billion euro, while 419.2 million euro comes from other sources of income.

The recurrent expenditure is expected to increase only by 92.6 million euro over that forecast for 2011.
The capital investment in Malta

18:44 "The Government’s strategy is to safeguard employment, to incentivise investment, to develop the economy, to invest strongly in education, to keep the tax burden low, to fight inflation, to reduce bureaucracy, to strengthen pensions and social benefits, to support the neediest families and to continue to invest in the development of health services. This strategy is bearing fruit, because we believe that economic policy and social policy are inextricably linked even in times of crisis."

18:30 You can catch up on the daily news on www.maltatoday.com.mt [Scroll down for Today News]

18:07 Finance Minister Tonio Fenech has arrived at parliament where he will first present the Budget to the President of the Republic.

17:51 A television survey on TVM has polled 62% of viewers saying they believe taxes will be increased during this Budget.

17:08 Labour's 'Real Budget' has just gone online and uploaded some videos:

16:54 Government is presenting the Budget for the first time on Facebook and Twitter (see earlier entries on this liveblog); and it also launched a smartphone app for Iphone, Ipad and Android.

The public can also call on 188 for information on the Budget today after the speech up until midnight, and from 8am till 8pm between Tuesday, 15 November and 27 November - Sundays included. The public can also send emails to [email protected] while other information will be available on www.budget2012.com.mt

16:50 Labour organ maltastar.com claims an average shopping basket of 43 items costs €8 more, one year since the last Budget.

16:07 WATCH An interview with Finance Minister Tonio Fenech on Reporter, over whether income tax cuts or higher tax ceilings can be expected in Budget 2012.

13:28 Labour have filed a complaint with the Broadcasting Authority over alleged imbalance in PBS's reports on Budget 2012.

We'll be uploading various links to news items on the various aspects of tonight's Budget as we go along, as well as include the experts' opinions on the Budget broadcast on Reporter on Favourite Channel today.

The Finance Ministry also has a Facebook page and a Twitter account for its Budget 2012.

You can also download the 2012 pre-budget document here.

The Labour Party has its own budget website called The Real Budget, which you can also follow on Twitter and Facebook.