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BUDGET2025 OPINION A nod to the hardworking middle class A tired middle class can look to 2025 with some optimism after Clyde Caruana an- nounced a significant income tax cut that will boost disposable incomes. The widening of the tax brackets will result in hundreds of euros in savings for middle income earners. This will come as a reprieve after years of seeing their in- comes erode through inflation and sav- ings taking a battering during the COVID years. Indeed, the announced tax cuts could not come too soon, although Caruana could have been more ambitious and introduce a new 20% bracket to differentiate the large mass of taxpayers that fall within the 25% bracket. It would have provided greater re- lief for lower middle income earners. But Caruana has also retained the tax refund ranging between €60 and €140 for all workers earning below €60,000, which ensures that those who do not pay income tax will still receive a grant. The income tax changes are a nod to the hardworking middle class but more im- portantly they signal a shift in public dis- course. Over the past few years references to the middle class have been few and far between – it was almost shameful to speak about ordinary hardworking families and self-employed individuals who earn rela- tively good incomes but saw their dispos- able income eroded by rampant inflation. This country's economic engine rests on these hardworking men and women, who want to give their children a decent educa- tion, seek to travel abroad for their annual holiday, spend money in restaurants and shops, and want a safe, clean and normal country to live in. Budget 2025 recognises their efforts. But the income tax changes are not the only measures targeting this large cohort of workers. Caruana announced another significant increase in the Children's Al- lowance of €250 per child. This will help alleviate the financial burden on families with children. Significantly, government will also main- tain subsidies on energy and fuel thus cushioning families and businesses from higher international prices. Nonetheless, Caruana has retained the indiscriminate nature of these subsidies with no attempt to gradually direct this support towards low and middle income earners and small businesses. The finance minister's projections show that despite the tax cut and the hefty ex- penditure on subsidies, the country will still post a lower deficit next year. This will be possible because Caruana expects the economy to continue growing in the range of 4.3% and 4.5%, which is well above the EU average. The Finance Minister will also bank on a positive sentiment among consumers gen- erated by a boost in disposable income. Nonetheless, the budget measures on their own will not be enough to re-create the post-2013 feel good factor unless peo- ple can experience improvement in their quality of life. This includes tangible matters such as improved public infrastructure, cleanli- ness, accessible green spaces, investment in healthcare and better enforcement; as well as intangible matters such as less ar- rogance from government and a genuine commitment to tackle abuse and corrup- tion. Although having more money in their pocket is a plus, it is not the only consider- ation people make. One notable example is in health. With the full extent of the Vitals hospitals fraud becoming apparent earlier this year peo- ple will continue to be cynical about in- vestment plans in public hospitals unless they see visible progress. And if people are forced to seek medical care in the private sector because of lengthy hospital waiting lists, any increase in disposable income will simply vanish into thin air. Middle class Malta will relish the cut in income tax but it will also continue to ob- serve in silence how Robert Abela's gov- ernment discharges its functions – a tax cut will not absolve the administration from its ills. maltatoday MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 EXECUTIVE EDITOR: KURT SANSONE DEPUTY EDITOR: PAUL COCKS Tel: (356) 21 382741-3, 21 382745-6 Website: www.maltatoday.com.mt E-mail: dailynews@mediatoday.com.mt EDITORIAL maltatoday | TUESDAY •29 OCTOBER 2024 7 available on land. This, combined with continued investment in the islands' fast ferry service and planned underground parking lots closer to ferry access points means we can rely on maritime transport as a reliable and sustain- able source of transportation. But our focus on sustainability and pollution management should not be restricted only to the blue economy. Indeed, the launch of the recent 'Vjal Kulħadd' scheme is a testament to the Labour gov- ernment's dual focus on mitigat- ing town pollution and strength- ening our communities. This can also be seen through a new project which will see a revitalised green lung in Gzira's Council of Europe Gardens. The use of technology to man- age the country's traffic and mon- itor air quality is also a main fo- cus of this budget. Technological advances mean that all aspects of transport operations are im- proved but these are also not im- mune from potential cybersecuri- ty challenges. The budget will see an investment in the Intelligent Traffic Management System, a tried and tested system that de- ploys AI and monitors traffic in- fluxes at specific hours of the day and optimises traffic routes. Cou- pled with this, in the coming days, we will put forward initiatives that can decrease traffic congestion during peak traffic hours and look at reducing the number of cars as a theme in future measures. After Monday's speech, the peo- ple of Malta will come off feeling they genuinely have a social dem- ocratic budget to look forward to. One that remains loyal to the party's 2022 manifesto, but more importantly, one that focuses on longevity and sustainability. year, another strategic Chris Bonett is Minister for Transport, Infrastructure and Public Transport Chris Bonett When one looks at Malta through a prism, our biggest and perhaps, our most underrated commodity is the Mediterranean Sea that wraps our shores