Budget 2011 | Highlights from Tonio Fenech's budget speech

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BUDGET 2011 highlights

• Deficit for 2010 will be close to 3.9%. Government aims at decrease to below 3% during 2011.

• Strategy to decrease Government’s arrears by 10%.

• Where possible, and applicable, a decrease in the number of new employees, with the termination of one out of every two employees.

• Training programme using EU funds for workers in the public sector to implement better regulation.

Public finances and public sector efficiency

• A training programme for all those earning a minimum wage. All those who will participate in this training will be given an allowance of €25 per week.

• In order to encourage more women to join the job market, we will introduce the possibility, for part-time self-employed women, to choose to pay a social security contribution on a pro-rata basis of 15% on basic earnings instead of the contribution based on minimum wage.

• Part of the income of persons who are on social assistance will not be included in the means tests in order for the family to qualify for social assistance. The amount of the wage that will be exempt from the means test will be equivalent to the difference between the minimum wage and the full social assistance rate applicable for 2 persons.

Investing in enterprise and employment growth

• Benefits from the MicroInvest scheme can be absorbed until 2013 while the MicroCredit scheme is being introduced.

• Launching of the ‘Gateway to Export’ Programme, that provides assistance and training to companies, with an investment of €1m to give these the opportunity to export to foreign markets.

• Quality Improvement Programme, with an expenditure of €250,000 to increase awareness about various quality aspects and to help enterprises improve their quality, become more competitive and increase their franchising opportunities.

• Decrease of 150% from taxable income up to a maximum of €10,000 on expenses spent by enterprises to increase their quality and product.

Direct investment in local enterprise

• Continuation of the programme to improve industrial zones, with an investment of €16 million. This includes the rebuilding of the three Childcare Centres in Mosta, Xewkija and Kordin and the construction of the Life Sciences Centre.

• Investment of €6 million in Assistance schemes for the Manufacturing Industry.

• Investment of €3.3 million in assistance schemes for sustainable energy.

• Beginning of works at the SME Micro Business Park in Gozo - €8 million.

• €9 million for Malta Enterprise to execute incentive schemes for industry

• In order to encourage the use of Government online services by more businesses, VAT laws will be amended to ensure that businesses who send in their VAT declaration and payments online, are not charged interest and administrative fines if these are sent within seven days after the deadline.

• Removal as from 1st January of VAT registration obligations for those persons who have an annual turnover below €7,000.

• Establishment of the Entrepreneurial Training Fund, which our educational colleges can benefit from to finance educational projects in a competitive manner.

Investment to increase our competitiveness

• Training of civil servants about particular needs of the business sector and creation of an assistance culture for business among all public sector employees, with an investment of €800,000.

• Empowerment campaign for the consumer and launching of a publication, containing information for Maltese and Gozitan consumers about their rights and the products on the market.

Tourism

• An increase in VAT on accommodation from 5% to 7%.

• Allocation of €35 million, an increase of €4 million in marketing and international activities – the greatest investment so far in tourism.

• A fund of €10 million, that will assist businesses in the tourism sector to develop themselves as well as their product.

• Continuation of a €3 million programme to improve the skills of persons working in the tourism industry on a managerial level.

Transport

• An increase in excise duty on fuel of 3c per litre.

• Incentives for those buying new cars and scrapping old ones – when an old car is not scrapped, half of the incentive goes into a fund for the removal of old cars from our roads.

• The value of carbon dioxide in the tax computation of hybrid vehicle registration will increase from 20% to 30%.

• A scheme whereby a person buying an electric car can benefit from a subsidy of €5,000 for the installation of sustainable energy sources on the car (eg. PV panels). A number of charging points for electric cars will also be installed at strategic sites.

• The annual circulation license for the M1 vehicle category without emissions, i.e. electric vehicles, will be decreased from €75 to €10.

• A tax deduction equivalent to 125% on amounts spent by companies on electric cars.

• Provision of training in electric vehicle sectors.

Infrastructure projects

• Relaunching of the assistance scheme for the purchase of solar water heaters to complement the existing scheme. A maximum subsidy of €400 will be given on the price of the apparatus. Around 2,000 more families are expected to benefit from this scheme.

• Continuation of the process to install photovoltaic panels on 67 thousand square metres of public roofs.

• Investment of €1 million to continue environmental studies, and other studies, about the feasibility of windfarms, onshore or offshore, according to the application submitted by Government to MEPA.

• Continuation of the improvement of the rainwater storage facilities in the winter months to decrease the impact on the water-table.

Education

• Commissioning of a new system of eLearning in schools.

• An increase in the maximum amount of deduction given to individuals who pay school fees for their children attending private schools:

– In the case of children attending primary classes in private schools or private kindergartens, the maximum deduction will increase from €1,000 to €1,200;

– In the case of children attending private secondary schools this will increase from €1,400 to €1,600.

• VAT refund on new buildings constructed by independent schools.

• Increase allocations to University by €3.5 million.

Sports

• A fund equivalent to 15.25% of the price of sports equipment for sports organisations recognised by KMS.

• Refund of 15.25% up to €150 on the total price of bicycles.

• Investment in a football ground and waterpolo pitch in Birżebbuġia.

• Introduction of the unique registration plate concept for classic car collectors.

• Removal of the 6.5 registration tax on sports vehicles that are used only on racing tracks and other places authorised by Transport Malta.

• Allocation of €250,000 in assistance to attract foreign organizations to our country to train and organise international competitions.

• A scheme where each student (aged between 12 and 14 years) is awarded during the first 3 years of secondary school a credit of €15 for artistic activities and visits to cultural sites.

• A fund of €150,000 for investment in independent organisations that work for the national development of culture.

• Funds for a training programme in film as well as cultural management.

Cost of living, social benefits

• An increase in supplementary assistance up to a maximum of €4.57 per week for single persons, and up to €8.13 per week for married couples. This measure will cost €800,000 per year.

• Pensioners will receive the full COLA increase, which will be €1.16 using the same mechanism for calculation as previous years.

• We will continue to address the existent anomaly in service pensions, with a decrease of another €200 for this year, which will have an impact on around 6,200 pensioners. This will mean an expenditure of €1.3 million.

• €400,000 for residential or fostering services

• Continuation of grants aid to first-time buyers, from which around 340 persons benefit per year.

Health

•  Construction works on the Cancer Centre at Mater Dei Hospital, an investment of €14 million.

• Reforming the medicine purchase system to address inefficiencies that are creating huge inconveniences to patients, due to the waste of resources in the distribution of medicines.

• Extension of the Pharmacy-of-Your-Choice scheme, with an investment of €1 million and an additional €400,000 for an electronic system.

• €2.3 million to decrease the waiting periods at hospitals.

• An increase of 3 to 4% in excise duty on cigarettes and tobacco.

• An increase in tax on local beer of slightly less than 1c per 25cl bottle and 13% on spirits.

• Allocating flats at Mount Carmel Hospital under the Housing Authority’s supportive housing scheme, which can be used by patients who are allowed to leave the Hospital, and who do not have a place to reside.

Agriculture and Environment

• Decrease in the social security contribution for full time farmers and herdsmen to 12%. Every farmer will pay an average of around €520 per year less in contributions.

• 3 more markets for farmers.

• A fund of €400,000 to decrease the impact of increased international prices for wheat and cereals.

• Excise duty of €9 on each tonne of cement.

• Hazardous Waste Treatment Plant – investment of €3.7 million.

• A vote of €3 million for expropriation payments under the Home Ownership Schemes.