Finance minister insists tax cuts lead to growth, finance social measures

Finance minister Clyde Caruana has insisted Labour’s tax cut pledges for workers and self-employed would leave more money in people’s pockets, generating more revenue in the long run, to finance social measures.

Caruana and energy minsiter Miriam Dalli addressed a press conference on Saturday morning at the PL headquarters in Ħamrun, where they ran through the party’s already announced electoral promises.

Labour’s financial pledges in this election include tax cuts for all employed and self-employed workers, by raising tax ceilings by €1,700 to reduce tax burdens. The government estimates this will leave between €255 to €300 in people’s pockets. “As the national ‘cake’ grows, more revenue can be used on social measures,” Caruana said. 

Pensioners in the next five years will also get a €15 weekly increase apart from the weekly COLA (Cost Of Living Allowance). “The country’s finances are in a strong state, the economy is growing, and I am confident we can do this.” 

Caruana said a corporate tax reduction from 35% to 25% would be providing more liquidity to businesses, and opportunities to invest in the economy.

He said the new cost-of-living mechanism would provide additional supplements whenever needed. “This new mechanism has to be introduced so that an additional supplement is provided whenever it is required. We will be continuously increasing pensions,” Caruana said. 

Dalli on the other hand said the €700 million investment in the road infrastructure throughout this legislature, helped attract new foreign investment to Malta. 

“The infrastructure of the country was not adequate to attract foreign investment. The €700 million injection into Malta’s infrastructure helped attract new investment to Malta, but we must now shift priorities onto the environment,” Dalli said. 

She said a €700 million environmental investment pledged by Labour, would lead to a better quality of life in the densest parts of the urban areas of Malta. Dalli said this investment will help Malta reach its decarbonisation targets. 

Dalli referred to another pledge, which promises to give a yearly €1,000 for the first 10 years to those purchasing their first property. “We are offering youths the opportunity to achieve their dreams. Apart from the loan repayment we are also increasing the stipends by 15%” Dalli said.