The full Budget - the top 10, and the rest of 2014's measures

Top 10 items that will affect your life in 2014

• Cost of Living Increase set at € 3.49
• 25% decrease in electricity rates in March
• Cigarettes to increase by 30 cents a packet
• Alcohol to increase by 40 cents by litre
• 1 cent increase in price of petrol
• Top rate of income tax to decrease from 32% to 29%
• Tax free bracket for parents to increase from € 9300 to € 9800
• Eligibility for reduced 15% part time  tax rate to increase from € 7000 to € 10000 and to €12,000 for part-time self employed
• Free childcare services
• 'Investment registration scheme' for people with undeclared monies or funds against payment of unspecified fine

 Fiscal measures

No new taxes introduced, but the rate of excise on cigarettes, tobacco, fuel, beer and alcohol and on oil bunkering has been raised. All excise tax starts as of today, while fuel excise is increased on 1 January 2014. The only difference is that the price of diesel will not be increased because the government has negotiated stable pricing for the January-March period - which would have meant six months of price stability on diesel since September 2013. The government is also negotiating on the price of petrol, which will rise by 1c from January 2014.

Car licences will be increased for cars with large engines, but the licences for smaller cars registered from 2009 and with carbon emissions of between 0 and 100g will not be affected.

€21.4 million in revenue from these excise duties and taxes is estimated to be generated.

Infrastructural investment

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.

Income tax rates  

Edward Scicluna set much store in announcing that income tax cuts, mainly aimed at the middle-class, would take place without having to wait for the last year of a legislature.

As expected, 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. Tax on income from dividends will be taxed at the previous rates (pre-2012 rates) to ensure sustainable revenues from income tax.

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.

Part-time work

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%.

In a bid to encourage employers to declare employees who are employed on a part-time venture or business, a self-employed part-timer who employs up to a maximum of two part-time employees will not lose the 15% tax rate. The current system does not permit the owners of part-time businesses to employ people when expanding their business, making it difficult for them to leave their full-time employment. This system is intended at allowed those in full-time employment make the shift to being full-time self-employed and start a business.

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.

Tax for footballers

A new concept will be a 7.5% income tax rate for footballers.

Scicluna said that in a bid to introduce more professionalism in sport, a 7.5% tax rate on the incomes of footballers was being introduced. The ministry held discussions with the Malta Football Association, and due to the introduction of new international rules on footballer, the income tax rate should encourage the declaration of salaries in the football leagues. "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.

Taxes on duty and transfer

The tax on the sale of goods by auction will be removed; while 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.

Withholding tax on rent

The government said it wants to incentives the rental market by regulating it better. Anyone who has 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 measure intended at encouraging conformity on the rental market. 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."

Exemption of duty for first-time buyers

Government said it wants to help youths and young people buy their first homes, by applying a one-time concession - as demanded by the Malta Developers Association - on the removal of the 3.5% duty payable on the first €150,000 of the value of a house. That means they will have to pay only 5% duty on the value of the house above €150,000. 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

Upon purchase of a property, the IRD sends in a government-appointed architect to value the house and to see that this is in conformity with the value declared in the final contract, and estimate whether any property tax has been underpaid.

Instead, the government will start accepting the valuation made by any private architect but new safeguards will be introduced so no abuse takes place: the budget speech however does not mention what these safeguards will be.

Pilot project for Valletta property

An interesting aspect of the Budget is that the government appears to have over 200 properties in the capital city which it was unaware of 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.

Simplification of VAT

As part of the merger between the departments for taxation, new amendments will simply various provisos in the VAT and Income Tax laws, of which the government hopes to simplify operational aspects.

The present system of appropriation for VAT has led to high interest rates on balances for arrears and late payments, which Scicluna said has made it difficult for taxpayers who have fallen behind, to effect payment.

As things stand, the first payments to be made are the set-off on old balances and are first paid against interest and penalties. So from next January, when VAT declarations are submitted on time, together with payment, the money that is actually paid is not set off against old balances, in a bid to encourage taxpayers' conformity with VAT dues and allow them to escape cash flow problems during VAT payments. "In other words, we want to help those businesses who are really doing their best to pay their VAT dues without having to burden them with new payments."

New provisos in the VAT Act will include a 'tax in dispute' clause. As things stand, when a new assessment is issued, the payments for VAT arrears also include those that are being appealed, and therefore not final and conclusion. The new 'tax in dispute' section in the VAT laws will ensure that payments are not offset against arrears that are being appealed.

The VAT Act also does not consider a VAT declaration valid unless all arrears have been paid: this results in an accumulation of penalties for non-filing of VAT declarations, even if these declarations have actually been filed. This penalty will be removed, but the government said it will be encouraging businesses to confirm with the new laws.

Interest rates on proscribed payments, both on VAT and income tax, on payable and refundable taxes, will be reduced and "rendered flexible" - no further details available on this.

Tax law breaches

Under current laws, when a person is found guilty of a breach under the Income Tax Act and is not sentenced to prison for that crime, the court warns that taxpayer that the court sentence is suspended unless a similar crime is committed within the next five years - resulting in a three-day prison stay.

This means that the law courts have no option but to sentence defaulting taxpayers to three day's prison if they are found guilty of a second breach. "We are looking at the self-employed as essential partners in our economy. We are going to be tough on tax evaders, but we believe that the circumstances of the past years has put bona fide self-employed workers in difficult situations. We want this sort of imprisonment to be the exception, and not the rule. The law will be amended so that the courts, in the case of a second breach, will have the discretion to apply a €2,000 fine apart from retaining imprisonment as punishment."

Measures against tax evasion

Scicluna said the government will continue in its fight against tax evasion, which he said was undermining the government's own free services in health, education and social benefits. "Fiscal evasion is throwing excess burdens on honest taxpayers," the finance minister said.

Scicluna announced a new campaign against fiscal tax evasion "in a bid to make people understand that there is no room for evasion in a democratic and developed society."

Scicluna said the government wanted to assist the construction industry, on condition that the self-same industry pays the tax it owes the government. In a new measure, the construction industry will have to substantiate the estimates of the works it carried out construction as declared against bank loans taken out, and pay VAT on the actual estimates. 

Investment registration scheme

Echoing previous measures by the Nationalist government to repatriate monies invested overseas that went undeclared, the new Labour government - availing itself of the tax exchange information rules from the EU - will be demanding information on hidden and undeclared cash and investments.

The new Investment Registration Scheme will allow holders of undeclared monies to regularise their position and register undeclared cash, stocks and investments in Malta or abroad, on payment of a fine. The details are yet to be published.

Online reporting of black economy

In a bid to fight the illegal employment of usually foreign workers who are paid next to nothing, the government will introduce an online reporting system where such cases can be reported. According to Scicluna, the steps will be taken against "foreign individuals who come to Malta without respecting the rules" - he then said that bona fide businesses that pay their taxes on time cannot work in an environment where they are competing against businesses that don't do likewise.

EU Presidency 2017

2014 marks the first year of the Multi Annual Financial Framework for 2014-2010 - the first year of the new EU budget. The government said it will be prioritising the strengthening of competitiveness, economic sustainability, and more investment in human resources. Priority will also go to health, education, R&D, innovation, energy, job creation and credit access to SMEs. "The EU presidency of the first six months of 2017 are a great national challenge, and we will be facing it in a bipartisan approach. Training funds have already been allocated."

Decrease in energy and water bills

As expected, the government has announced that it will reducing water and electricity bills - something that taxpayers have been expecting since the first day of the election campaign of 2013.

In March 2014, the electricity and water bills will be reduced by an average of 25% and 5% respectively for families, leaving more cash in people's pockets as well as provide a multiplier effect for the rest of the economy. "Alice in Wonderland" - the gas plant plan as dubbed by former finance minister Tonio Fenech during the campaign - " will leave €25 million in families' pockets, without any negative impact on public finances."

"As forecasted, after international consortia showed their confidence in the project, the plan to reduce energy bills is on track. Had it been for someone else, we would be paying higher energy and water bills. This government is an assurance that consumers will pay less. We will be shifting to gas, which is healthier environmentally, and a new study on the feasibility of a gas pipeline will be carried out. The second part of this plan will be the reduction of energy bills in 2015 for businesses."

Enemalta

Also featuring in the Budget speech were plans for the purchase of a stake in Enemalta, reportedly 35% but not mentioned in the Budget, by Chinese government-owned China Power Investments and Shanghai Electric, which Scicluna said will bolster an agreement with Libya for the sale of fuel products at advantageous prices. "This is the plan that will save Enemalta from the disaster that it was left to fester in, and that will save the jobs of so many employees and open up new markets."

Price stability

The price of petrol, diesel and gas will remain stable up until the end of the year, while a new price agreement will keep the price of diesel stable for another three months from January to March.

Malta Oil and Gas Corporation

The government will be setting up a new oil exploration corporation to give what is currently a one-person department, the necessary infrastructure for the development of this sector. The MOGC will be the government's agency responsible for oil exploration strategy.

Renewable energy

The government has committed itself to incentivise alternative sources of clean energy, with a 3% target for the generation of clean energy in 2014. A revision of the National Renewable Energy Action Plan will be undertaken so that the government identifies policies and measures that will allow the government to reach its targets.

Intelligent Lighting

The government will be carrying out a pilot project for intelligent street lighting in Gozo and 12km in Malta, co-financed by the EU funds and tagged at €2.8 million. The project will see present street-lighting replaced by less energy-consuming lighting that can withstand 60,000 hours of performance and which will have a dimming effect. Eventually, the project will extend towards the entire country, at a price tag of some €5.4 million. A €6 million lighting project will also be carried out in the Ruzar Briffa unit at the St Vincent de Paule home for the elderly, again co-financed by the EU.

Retro-fitting and energy audits

Various energy audits have been carried out on public buildings. The government will be promoting retro fitting on various buildings so that they can be energy efficient, since buildings consume 40% of energy generated and that it will promote public buildings that will be energy self-sufficient.

Families will also be granted free experts' advice for a voluntary energy audit so that they can know how much their homes are consuming energy.

Water heaters subsidy

A €500,000 global subsidy is being voted in this year's Budget so that families can claim a subsidy on solar water heaters as well as roof insulation.

Siggiewi school pilot project

The government will be voting €1 million for a pilot project in the Siggiewi primary school in a bid to make the school more energy-efficient.

National Plan for Water

Although there is no sign yet of actual billing on the metering of water consumption from groundwater sources, the government has announced it is creating a national action plan on water so that a proper infrastructure is created to harvest rainwater and to restore and effectively manage any existing facilities for water harvesting. A campaign for the conservation of water will also be launched.

ETC budget

The government will be allocating €8.3 million to the Employment and Training Corporation, while a new committee has been created to monitor the Jobs+ programme as agreed to between the social partners back in January 2013.

Free childcare

The introduction of free childcare centres was one of Labour's main points during its electoral campaign, in a bid to encourage more women and single parents to seek work "We want to help families to be in a better position to exploit the potential of every family member to find a balance between family duties and work," Scicluna said.

€3.8 million will be invested in the next year so that childcare will be offered for free to families where two parents are both working, or in the case of single-parent families where that parent is working. The investment is expected to grow in the coming years, Scicluna said.

A new White Paper will seek consultation on the functioning of the system.

Breakfast club for kids

In a bid to allow working parents to drop their kids off to school earlier, the government will be introducing a Breakfast Club that will give school children a healthy and nutritious breakfast ahead of school hours, and promote a healthy lifestyle amongst pupils. This new programme is not expected to oblige teachers to take on new responsibilities but will take place in consultation with teachers. Teachers who undertake the monitoring of the Breakfast Club will be paid extra.

Tax cuts on childcare centres

Scicluna announced cuts in taxes for parents who send their children to childcare centres: the law already provides a reduction on incomes declared by parents who send their children to childcare. The reduction will increase from €1,300 to €2,000, and benefit those parents who pay for childcare from private centres.

Less tax for women who work

In a bid at increasing the rate of female participation in the labour market, from 2014 onwards, married women aged over 40 who have been inactive for over five years and whose salary does not exceed the minimum wage, will be allowed to pay a joint computation tax. This benefit will be availed of for a maximum of five years. Men with median salaries will be saving up to €800 in tax for every year on this joint computation.

Youth Guarantee

Joseph Muscat's youth guarantee will be introduced in 2014 in a bid to assist youths who are no longer in education and who can receive training to find work. Scicluna said that youth unemployment in Malta was decreasing but that the government would still provide "individual attention" for 350 youths who are inactive or seeking jobs, so that they can continue studying or training for work. They will be paid €1,440 in the form of an educational investment. Total cost €2 million.

Employability index

A new employability index will offer new guidelines for work opportunities available, for university students and youths to understand the economic opportunities available to them. More investment will go towards the ETC's Employment Advisory Services.

Incentives for apprenticeships

Government will invest €350,000 to incentivise employers who offer work placements and apprenticeship scheme. A new tax deduction scheme will give employers €600 for each work placement and €1,200 for each apprentice, with a total price tag for the exchequer of €1 million. Discussions are underway for a reform in the system of work apprenticeships.

A new course at the Institute for Tourism Studies - Foundation in Tourism Studies - together with Malta Enteprise and the ETC, will allow students to acquire new skills to open up their own business, find work or keep studying in the field of tourism studies. Every student in the second year will also be given a work placement in the industry to acquire experience in the world of work.

Work for Gozitans

A €1.1 million Work and Training Exposure Scheme has already been introduced in Gozo, which will be accompanied by the renewal of the Employment Aid Programme.

Youth Entrepreneurship Scheme

This scheme, launched by the preceding administration, will have €300,000 allocated.

Training for unemployed workers

The training and employment of unemployed workers aged between 45 and 65 will be incentivised through a deduction of €5,800 from income tax in the first two tears, that will generate €2,030 in savings every person who was previously unemployed. Apart from this, companies that employ these unemployed workers will benefit from an income tax deduction of up to 50% on the cost of training, capped at €400.

Incentives for jobless

Scicluna said that more workers on benefits and the unemployed had to join the labour market. "We are aware of abuses in the work register and we are going to fight this. Such abuse is unjustifiable for honest, hard-working taxpayers, but we know of situations in which people are genuinely not working because it pays them less. The difference between benefits and a wage is not enough to justify the necessary effort. This government wants to show these people that work pays."

Scicluna announced a system where people on benefits will retain these benefits, which will instead be gradually reduced on a period of time. In the first year, beneficiaries will take 65% of their benefits, in the second year 45% and in the third year 25%. Employers will also receive 25% of the benefit every year for three years, with difference in benefits saved being poured into a training fund.

Cost to the exchequer: nil.

Training for single parents

"We know there are people who want to blame single parents for everything... yes there are people who abuse, and we will take these abuses seriously, but we want to give a chance to single mums and dads," Scicluna said.

The government said it will encourage single parents to improve their prospects, by receiving a credit of €200 to €1,000 - if they are receiving social assistance - when they enter into intensive vocational training, or take up a full-time educational course.

Education and vocational capital spending

Recurrent and capital spending for education will go up by 8.5% or €32 million, to go up to a total of €411.7 million, excluding the payment for childcare centres. A new €15 million spend on maintenance of current schools is already underway. Scicluna said the government will be devolving more power to teachers and heads of schools in carrying out their school programmes, and that a new school construction plan will also be presented shortly.

Tablets for schoolchildren

The use of tablets in education, as announced in the elections, will be introduced in a  pilot project that will test the application of these tablets for school pupils in consultation with teachers

Teachers' sabbaticals

"We believe teachers are our best partners in education and we have to invest in them," Scicluna said, announcing talks with teachers' union MUT so that teachers can avail themselves of a paid leave to take sabbaticals related to their professional development.

Vocational education certification

Vocational education will be given through the use of workshops of MCAST, with vocational experience being certified at MCAST so that students can pass straight from secondary education into MCAST without the need to undergo a foundation course.

University of Malta

Over €72 million will be allocated to the University of Malta and the Junior College sixth form, or 13% and €8.4 million over the amount allocated in 2013. "We want to help the University be stronger so that it can become more sustainable.

Stipends with pro-rata COLA

For the first time since 1999, stipends will be increased by 1.9% globally by giving students the COLA increase as from 1 January 2014, at a price tag of €250,000, apart from raising stipends for veterinary medicine students to €300.

Individual Investor Programme

The government is forecasting an estimated €30 million from the sale of citizenship to wealthy applicants. Scicluna said the scheme, which will charge €650,000 for the purchase of Maltese citizenship, would put Malta at par with such citizenship-by-investment programmes as employed in Canada, Portugal, Belguim and Singapore.

"It is easy to scaremonger but this country has always won its challenges because it was not scared. Despite the irresponsible confusion being generated by critics, this government is convinced that this programme will be successful."

Some €15 million is expected to be poured into a national development while the rest financing the budget.

Tourism

Priority to be given to the regeneration and management of Malta's coastal resorts. Attention will be given to the rehabilitation of the coast, which will include new beaches, and better management of existing beaches. But no specific projects are mentioned.

The government will be revising its national strategy for tourism. It also aims 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 palazzini in to tourist accommodation.

Air Malta

The government will hold the current management of AirMalta "responsible' for the restructuring process. "After €40 million euro were passed on to Air Malta a further €15 million are to be allocated next year...Tax payers expect results for this."

Shop opening hours

The budget announces a reform of laws regulating shop-opening hours aimed at increasing competitiveness and improving services for consumers.

But no details are offered on the prospective reform, which will be concretised in a white paper issued at a later stage.

According to the budget a balance is needed between safeguarding the free time of shop owners and the needs of families especially those where the two partners work, who find it difficult to buy in traditional times.

One of the ideas being explored whether to leave it up to shop owners to choose which days they are closed. The idea of introducing night shops will be explored. But the rights of workers will also have to be safeguarded. The government will seek feedback from stakeholders before taking decisions on this issue.

Interest rates charged by Banks

The government is concerned by the high rates of interests charged by banks on medium and small sized companies. These high charges increase costs for businesses and decrease competitiveness. But the budget is short of any concrete measures addressing this problem. At this stage the government will be asking the MFSA and the competition authority to examine this situation and see whether there is room for corrective action. The preferred option is to seek consensus between operators.

Government is envisaging a charter on the rights of small investors and a charter of rights of bank clients as well as an arbiter for financial services.

Small businesses

Presently 31,000 family owned business employ 38,400 people. Government will be presenting a new law regulating family businesses with the aim of ensuring the sustainability of these businesses. Another aim of the new law will be to facilitate the transfer of these businesses from one generation to the next to ensure that these businesses are consolidated not fragmented.

Hawkers to be relocated

The hawkers market, which employs 74 family businesses, will be moved to Ordinance Street. But while hawkers will benefit from being located in a more strategic location, the government will be insisting on a uniformity of standards. Those not abiding to the new standards will risk losing their licence.

Transport and congestion

Traffic congestion is described as a problem affecting competitiveness. The short-term measures contemplated in the budget include the prohibition 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 is embarking on an "ambitious programme" to improve existing roads.

In Mosta the government will focus on the situation at Blata l-Gholja while the construction of a bridge on Triq is-sebh in Qormi will be a priority.

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 is being voted to commence the refund of car registration tax, which will take 7 years. Details of the scheme will be announced at a later stage.

The traffic warden scheme will be reformed.

A white paper will be issued before this reform is enacted. The aim of the reform is to give wardens a "more educational aim".

Gozo Airstrip

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

The government will commission a socio-economic and a technical study on the feasibility of the airstrip as well as an environment impact study. The government will decide after a consultation process and assessing the pros and cons of the development.

Environment

The government will invest € 103.6 million euros in the agricultural and environmental sectors.

The government reiterates its commitment to divorce the environmental from the planning arm of MEPA by setting up a separate environmental protection agency.

Curiously in the chapter dedicated to the environment the budget refers to the new reduced planning fees, which have "encouraged investment by families and businesses".

While no reference is made to regulating land use and rampant construction, the government is committed to prioritise air quality through adequate monitoring.

The budget makes specific mention to enhancing urban zones through a 200,000 pilot project on placing pot plants in urban areas.

The government also intends to approve noise pollution legislation.

The government is allocating 200,000 euro for the management of the M'Scala family park. The government is also drafting climate change legislation.

The government expresses its disappointment on the lack of cleanliness in towns and villages but proposes nothing concrete.

No details are given on how the eco contribution tax system will be changed.

The government will reduce the registration of certain categories of used cars imported from outside the EU.

This will apply to cars which emit less than 150g per kilometre and which have not been more on the road for more than 8 years. The tax on the registration of motorcycles with an engine capacity of 250cc or more will be decreased by 25%. Previously motorbikes of less than 250 cc where exempted from tax.

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.

Health reforms

The 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.

The government also intends to devolve the administration of health clinics to local councils to "maximise the service" offered.

Opening times of the Birkirkara health centre are being extended.

The government reiterates its commitment to ensure free health care for everyone but will achieve this aim by working hand in hand with private sector.

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

The government intends to publish the John Dalli report on Mater Dei, which includes revelations, which "should shock the tax payer."

The report is set to include proposals, which will be discussed to achieve consensus on the future of health services at Mater Dei.

The budget reiterates the labour party's commitment on the problem of patients in hospital corridors but does not propose any way forward on this issue except for the creation of 68 new beds in 2015.

The budget reserves strong words for the existing free medicine schemes but contain no concrete solutions except for hinting at a White Paper to be issued at a later stage.

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 analyse 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.

Pensions

The budget makes no reference to the introduction of a second pillar pension- a mandatory mechanism through which employees and employers contribute an additional sum to ensure the sustainability of future pensions.

The budget only refers to a working group, which will set a strategy to address the sustainability of the pension system. Curiously these will be based on the recommendations made by a similar working group issued in 2010, which specifically referred to the need of a second pillar.

The government also reiterates its 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 incentives mentioned in the budget are fiscal incentive for voluntary third pillar pensions. These incentives for private pension insurances will cost the country €1.5 million. A regulatory framework will also be introduced for this sector.

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

Housing scheme

The government aims to address social housing needs by incentivising the rent market. It laments that inherited 3,000 applications for social housing while only having 48 disposable places. The Housing Authority will also enter in to a Public Private Partnership to build more apartments aimed at home ownership schemes for low income earners. The Authority will also sell a number of shell and semi finished apartments with a subsidised rate.

No indication is given where these new buildings will be constructed. The government is also committed to conduct maintenance works in existing housing estates.

Disabled persons

The allowance for disabled children is set to increase from €16.31 to €20 euros a week. 815 persons will benefit from this substantial increase.

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.

A guardianship service for people with intellectual disabilities will be introduced with the aim of preventing abuse on this vulnerable category.

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

Gozo

The allocation for the Ministry for Gozo will be increased by 8%. No details are given to specific incentives for investment in Gozo, which will be introduced at a later stage.

The National Office of Statistics will open a branch in Gozo.

The budget reiterates the government's commitment for the development of yacht marinas and a cruise passenger terminal in Gozo.

It also announces the commencement of the construction of a new law court in Gozo.

In collaboration with the Gozo Curia a home for the elderly will be developed instead of Dar San Guzepp.

Culture and Sports

A scholarship scheme will be introduced to encourage athletes to become professionals. Footballers will be used as role models for children to encourage them to read.

€200,000 will be allocated for the establishment of a Malta Dance Company. €150,000 euros will be allocated to help local band clubs.

The government will allocate €1.6 million 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.

MPs' salaries

The government will honour its electoral promise to ensure that MPs are paid pro rata according to their attendance. It 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. A workers' right charter will also be issued at some stage.