[LIVE] Budget 2014 live blog

Welcome to MaltaToday's live-blog for Budget 2014 - tweet your views using #maltabudget

Prime Minister Joseph Muscat with Finance Minister Edward Scicluna & Deputy Prime Minister Louis Grech #maltabudget http://t.co/GxmK5wTAGy — Nestor Laiviera (@NestorLaiviera) November 4, 2013

Minutes before the post budget 2014 press conference! #maltabudget http://t.co/7wHMNS7oTt — Nestor Laiviera (@NestorLaiviera) November 4, 2013

20:59 This live-blog ends here. Thank you for following us.

20:58 Budget speech ends here... Separate press conferences by the Prime Minister and the Opposition leader to follow soon.

20:57 A 'shock' for the MPs: The government will honour its electoral promise to ensure that MPs are paid pro rata according to their attendance - a measure which got a half-hearted applause with some MPs shifting uncomfortably in their seats.

Scicluna also reiterates the commitment to reconvene the constitutional convention, which is expected to change Malta's constitution.

The remit of the commission for equality will be extended to the safeguarding of human rights.  

20:54 Scicluna reiterates the government's pledge in fighting precarious work with the implementation of a workers rights charter.

On cooperatives, the government will amend the law to seek a minimum requirement of three, rather than five members.

20:50 On culture and sports, the budget introduces a scholarship scheme to encourage athletes become professionals.   The minister announced the allocation of €200,000 for the setting up of a Malta Dance Company while €150,000 euros will be allocated to help local band clubs.

The government will allocate 1.6 million euros for the celebration of the 50^th anniversary of Independence Day and the 40^th anniversary of Malta's republican constitution.

€1 million will be invested in the formation a film co-production company.  The budget promises that this will open a new chapter in the local production of films and thus enhance Malta's competitiveness. 

20:38 The budget plan for Gozo includes:

• A budget increase of 8%
• The setting up of an NSO branch
• The development of yacht marinas and a cruise passenger terminal in Gozo.
• The construction of a new law court
• The construction of an elderly home in collaboration with the Gozo Archdiocese.

20:33 Scicluna says the government inherited a 3,000 waiting list for social accommodation while there were only 48 available places. He announces plans for the Housing Authority to enter a PPP to build more apartments to be bought by low-income earners. 

Priority was also given to disabled person with the allowance for children with disability to increase from €16.31 to €20 euros a week.  "815 persons will benefit from this substantial increase," Scicluna says.

The budget abolishes inheritance tax on the transfer of property by disabled persons.

The budget refers to studies, which are being conducted with reference to electoral promise to give peace of mind to parents of disabled children who are concerned on what will happen after their death.  But no concrete details are given on the implementation of this long-term policy.

€900,000 are being allocated to increase placements in day centres for disabled people from 200 to 600.

20:25 Scicluna makes no reference to the introduction of a second pillar pension - restricting the pension measures to the introduction of a third pillar. The minister refers to a working group, which will set a strategy to address the sustainability of the pension system. 

Sciclun also reiterates the government's commitment not to increase the pension age.  The government will also initiate a process through which "over a number of years" the national minimum pension will be equivalent to 60% of the mean national income.

The only concrete incentive mentioned by Scicluna is the fiscal incentive for voluntary third pillar pensions.  This incentive for private pension insurances will cost the country 1.5 million euros.

The government will also allocate € 210,000 euros to exempt elderly persons and disabled persons who employ a carer from paying national insurance contributions.

20:15 Scicluna announces that government will start paying the expenses of both parents who accompany minors for an operation abroad, instead of paying for one of them as currently happens today.

He also announces government plans to devolve the administration of health clinics to local councils to "maximise the service" offered while opening hours of the Birkirkara health centre will be extended.

From the Opposition benches, a number of MPs shouted that the government was introducing charges in the health system given that IVF applicants would have to pay up to €2,500.

"The health budget is set to increase by 9.3% and most urgent issue is the stock management of medicines and reforming the pharmacy of your choice scheme," Scicluna says.

The government will soon make public the report prepared by former Nationalsit minister John Dalli on Mater Dei.

"The revelations will shock the tax payer," he says.  

A chemotherapy service is to be introduced in Gozo.

For the first time the government is recognising Myalgic Encephalomyelitis (ME) as a chronic condition. The government is considering a specific condition to analyze the needs of people suffering from this condition.

The government will also invest in equipment to freeze certain rare blood types to avoid cases where the government would have to import blood at a much greater expense.

20:10 The government will reduce the registration of certain categories of used cars imported from outside the EU while the tax on the registration of motorcycles with an engine capacity of 250 cc or more will be decreased by 25%.  

The state will allocate €600,000 euros for a car scrapping scheme which will encourage people to scrap old cars.  Through this scheme car owners will receive between €500 or €900 euro for each scrapped vehicle.   

The government will also encourage a shift to auto gas in a separate scheme.

20:08 Traffic congestion a budget priority: short-term measures contemplated include the banning of industrial trucks and horses during peak hours. 

In the medium term the government will give priority to the construction of the Kappara fly over. 

The long-term approach consists of a number of feasibility studies on the feasibility of a bridge or tunnel between Malta and Gozo and a study to explore the possibilities of an underground, monorail and maritime transport.

The government will also reform the CVA system as from next December, in time to shore up business during the Christmas festivities, by making parking free after 2:00 pm and all day on Saturdays. 

The budget says that the future of public transport depends on the outcome of talks between the government and Arriva, giving no details of the government's Plan B.

€3.5 million euro are being voted to commence the refund of car registration tax, which will be spread over 7 years.  

The budget formally resurrects the idea of an airstrip in Gozo, one of the projects discarded by the Alfred Sant government in 1996.

20:05 Shop owners will be happy to know that a reform of law regulating shop-opening hours has been announced.

"We aim to increase competitiveness and improving services for consumers," the minister declares. Further details will be announced in a white paper to be issued at a later stage.

The government will also be asking the MFSA and the MCCAA to review the high rates of interests charged by banks on medium and small sized companies.  These high charges increase costs for businesses and decrease competitiveness. 

The hawkers market will be moved to Ordinance Street.

20:00 Scicluna announces a revision of the national strategy for tourism, aiming to diversify the market by attracting tourists from the United States, China and Russia while consolidating existing markets like the German one. 

"The rehabilitation of village cores could also create opportunities to turn palazzos in to tourist accommodation," Scicluna says.

He says the government will be holding the current management of AirMalta "responsible' for the restructuring process.  

"After €40 million euro were passed to Air Malta a further €15 million are to be allocated next year...Tax payers expect results for this," he warns.

19:49 The education budget has been increased by €32 million reaching a total allocation of €411.7 million. The budget includes maintenance and upgrading of existent schools and the construction of five new schools.

The tablet pledge has been included, to be phased in through a pilot project. "This is being done on teachers' advice," Scicluna added.

The minister also announced an increase in stipends: "Contrary to a Nationalist government that reduced stipends, we will be increasng stipends every year," the minister said. The plan is for stipends to increase pro-rata according to the cost of living.

The budget also introduces a new measure by which students who repeat a year would not lose their stipend.

19:25 In order to encourage more people to join the workforce, the government is to introduce a system by which benefits are not stopped immediately once the individual finds employment. The budget proposes that the individual continues receiving 65% of the benefit during the first year of work, decreases to 45% during the second year and 25% during the third year.

Single parents who embark on vocational training or become full-time students will receive between €200 and €1,000 in credit.

19:20 Government's budget plans for work:

• The allocation of €8.3 million to ETC
• The setting up of Jobsplus committee
• Free childcare centres and 'a breakfast club' for students - parents could send their children to school earlier. "Teachers can participate out of their own will and they will be paid separately," Scicluna says.
• Further tax reductions for parents who send their children to child care centres.
• Married women - aged over 40 and above - who return to work after five years or more absence will not be taxed if they earn minimum wage. This benefit will last for five years. This means that a couple where the husband earns average wage will save around €800 in taxes as the single computation would be retained.
• The implementation of the youth guarantee with an investment of €2 million.
• The development of an employability index
• Incentives for employers to train apprenticeships
• €3.1 million investment in Gozo for employment aid

19:15 The pledge everyone's been waiting for: as from March 2014, electricity and water bills for families will go down by 25% and 5% respectively.

"Alice in Wonderland will be saving families more than €25 million," Scicluna says as former finance minister Tonio Fenech smiles and turns towards Simon Busuttil.

The energy plan includes the financial sustainability of Enemalta, stable fuel prices, the setting up of the Malta Oil and Gas Corporation, investment in alternative energy and the implementation of an intelligent lighting pilot project.

19:12 Turns out that government has over 200 properties in Valletta which it didn't even know about since no list or inventory exists of these properties. The project will gather all residential and commercial properties that the government owns in the capital city, so that it can safeguard heritage properties as well as those establishments that can be used for private investment.

19:07 Property: those with an income from the rental of residential property will have the choice to apply a final withholding tax of 15% on rental income, calculated on gross rental income. The Inland Revenue Department will be carrying out enforcement on the payment of rental tax, and rental incomes not declared will be subject to a final 35% tax calculated on the 35% on gross rental income apart from penalties and interest on unpaid tax.

"Everyone will have the opportunity to declare income from rent at a fair rate - tax evasion will not be tolerate."

First-time buyers: A one-time concession applied on the removal of the 3.5% duty payable on the first €150,000 of the value of a house. This means that only 5% duty on the value of the house above €150,000 will be paid.

The concession will apply for houses purchased both before and after 1 January 2014, but whose final contract will be executed within 2014. The measure is being intended as push for the property industry and to help first-time buyers save up to €5,250 on their first residence.

Removal of government architect's valuation: government to start accepting valuations made by any private architect but new safeguards will be introduced. 

19:06 Scicluna announces that the interest payable on duties from death taxes will not exceed the amount of duty owed - heirs will save money since interest payable on duties on inheritance taxes in the case of death, is not capped and can exceed the amount of duty payable.

19:03 There's something for the footballers as well: the government is introducing a 7.5% income tax rate for footballers. 

"We want to ensure conformity and give incentives to those who chose professional football, and we are hoping that with the help of the MFA, football clubs will confirm and enter the legitimate economy," Scicluna says.

18:59 Income tax rates:

• The top 32% tax rate for those who earn less than €60,000 will be reduced to 29% for single, married and parent computation. This will cost the exchequer €13.2 million.
• The parent tax rate will see taxable income raised from €9,300 to €9,800, leaving €75 in tax savings - a cost of €1.8 million to the exchequer.
• Additionally, parent tax rates will also be widened so as to include parents whose children are 23 years of age (up from 21 years of age), which will cover children who are attending University, MCAST and ITS.
• There will be no tax on minimum wage, with the current limit of €8,950 increase so that it covers the Cost Of Living Adjustment (COLA) rate.
• No income tax for pensioners whose only source of income - pensions - is not higher than minimum wage.
• Tax will be decreased for part-time works: the limit will increase from €7,000 to €10,000 in the case of a part-time employment and taxed at 15%; and to €12,000 in the case of part-timers who are self-employed, again taxed at 15%. 
• A self-employed part-timer who employs up to a maximum of two part-time employees will not lose the 15% tax rate.
• Pensioners who retain a self-employed business on a part-time basis will also be eligible for a 15% tax rate on their income, if this is not higher than the minimum income on which they pay social security contributions.

Lower taxes for P/T workers. Income tax slashed. Parents to benefit from better tax rates. Middle-class families better off #maltabudget — Kurt Farrugia (@KurtFarrugia) November 4, 2013

18:56 Scicluna announces that car licences for cars with large engines will be increased but licences for smaller cars - registered from 2009 onwards and with carbon emissions of between 0 and 100g will not be affected.

Capital expenditure will be increasing by €66 million over last year's budget, bringing up total spending earmarked on capital projects to €453 million. The sum excludes €15 million that will be paid for the capital strengthening of national airline Air Malta.

The expenditure also includes projects that have already been started, such as €11.7 million for the continuation of University and MCAST campuses, and the subvention to the Foundation for Tomorrow's Schools.

€2.5 million will be spent on a Marsa sports complex and new football and waterpolo facilities in Birzebbugia.

€96.4 million and €59 million respectively will go for infrastructural and environmental spending, and an increased allocation will go into road-building. Another €48.5 million will go for various economic sectors - unidentified in the Budget speech. Another €20.7 million will go in energy and water investment, while health will see an increase of €60.8 million in investment, as compared to last year's €52 million.

18:51 "No new taxes will be introduced," the minister says, adding that the income measures are based on existent tax duties.

The rates of excise on cigarettes, tobacco, fuel, beer and alcohol and oil bunkering have been raised. All tax excise start as from tomorrow, while the excise on fuel will come into force as from 1 January.

Given that government has already negotiated a stable price for diesel, this fuel's price is expected to remain unchanged. It is however still negotiating on the price of petrol which will rise by 1c from January 2014.

Revenue from excise duties and taxes is expected to reach €21.4 million.

18:46 Government is projecting a 1.2% economic growth. Scicluna says this is a "conservative figure" and the actual growth may be higher. He also confirms that a deficit reduction from 3% to 2.7% will be achieved by the end of this year.

According to the financial estimates, the government is expecting a €3.05 billion revenue and  €3.23 billion in expenditure. The imbalance of the consolidated fund is expected to stand at €179.8 million. It is estimated that the deficit will stand at €191.3 million - 2.7% of the GDP.

18:40 The finance minister says the financial reality found by a Labour government was different from that portrayed by the previous administration, but this did not "sway" the government from keeping its promise: "Our goal is sustainable economic growth that reaches everyone".

Six priorities were listed: controlled expenditure; cheaper energy bills; economic growth and making work pay; cost-cutting; diversification of economic activities and solid social services.

18:39 Here we go...

18:34 Speaker briefly suspends parliament as copies of the financial estimates and budget speech are distributed to the MPs.

18:26 Flashes and photocameras clicking away: Edward Scicluna makes his way towards the House of Representatives.

18:19 Finance Minister Edward Scicluna has just walked in the palace, accompanied by Speaker of the House Anglu Farrugia and proceeded towards President George Abela's office. The President's signature is required given that some of the Budget measures will come into effect as from tomorrow.

We remind all Twitter users to join in the Budget 2014 conversation by tweeting using the #maltabudget hashtag.

18:17 In an earlier tweet, the Prime Minister hinted at what the Budget will be all about: 'making work pay'

#budget2014 will be about making work pay -JM #Malta — Joseph Muscat (@JosephMuscat_JM) November 4, 2013

18:07 So... President's Palace all lit up awaiting the arrival of ministers, members of parliament and most importantly Finance Minister Edward Scicluna with the budget case holding the papers everyone's talking about: the Budget Document.

The first 30 minutes of this evening's session are business as usual: parliamentary questions being read out while MPs take their seats. Both Prime Minister Joseph Muscat and Opposition leader Simon Busuttil are already in the House seated in their respective seats.

17:15 Here's a tweet from the Prime Minister, sent out at around 4:30pm

#budger2014 #Malta Aktar b' Sahhitha, Malta Aktar Gusta / Malta: Stronger and Fairer — Joseph Muscat (@JosephMuscat_JM) November 4, 2013

17:15 Good evening: it's Budget day - and Labour's first budget for the 12th legislature. Expect a section of last year's electoral manifesto to feature prominently in this year's budget. And of course, don't forget about those tax cuts and water and electricity cuts...

#maltabudget standby starts now: with drinks and hors d'oeuvre at the ministry before the traditional 2-hour lock-in @jurgenbalzan — Miriam Dalli (@Miriam_Dalli) November 4, 2013