Issue link: https://maltatoday.uberflip.com/i/1528842
7 BUDGET2025 maltatoday | SUNDAY • 3 NOVEMBER 2024 A €9 billion spend next year BUDGET 2025 makes provisions for a €9 billion spend, covering all aspects of public service, subsidies, capital projects and loan interest repayments. Total ex- penditure will outweigh the revenue gov- ernment expects to collect from several income streams. This will lead to another deficit next year, which, however will still be less than 2024 as a ratio of the country's GDP. Indeed, Finance Minister Clyde Caru- ana is forecasting a deficit of 3.5% in 2025 as it continues its downward tra- jectory towards the 3% target set by the Maastricht criteria. To balance the books government will borrow €1.5 billion from the domestic market through the issuance of govern- ment bonds. This will be added to the public debt, which however will only marginally increase to 50.1% of GDP, well below the 60% threshold laid down in the Maastricht criteria. Income tax: €2.8 billion Despite forfeiting €140 million by widening the tax bands to leave more money in people's pockets, Clyde Caruana is still forecasting a higher return from income tax to the tune of €85 million. This is likely to result from strong economic growth and greater efficiency in tax collection. Social security: €1.6 billion No changes to the National Insurance regime were announced but Caruana is expecting to collect €111 million more in 2025. This is probably the result of heightened economic activity and more people joining the labour market. Customs and Excise duties: €329 million Government is only expecting to collect €9 million more next year but the estimates show that excise duty will now be applicable also to electronic cigarettes and refill containers from which Caruana expects to collect €500,000. The excise tax on low- alcohol craft beers and wine produced in Malta will be reduced to ensure a level playing field. Licences, taxes and fines: €467 million Caruana is expecting to collect €37 million more in 2025 despite no changes to licence fees and fines. Government is forecasting €50 million more from duty on documents and €7 million less in gaming taxes. VAT: €1.6 billion Caruana is forecasting an increase of €125 million in VAT receipts next year. This increase is likely to be driven by stronger consumption on the back of more disposable income. VAT on sanitary products such as pads and tampons will be reduced to zero. Non-tax revenue: €620 million EU grants totalling €288.4 million form the bulk of non-tax revenue. Government is expecting €50 million less in grants next year. These are followed by fees of office totalling €112.6 million, a reduction of around €2 million. Loan income and other income: €1.5 billion Local loans to the tune of €1.5 billion will be used to balance the books. This level of borrowing for next year is €200 million less than what was borrowed in 2024. The big spenders Health & active ageing: €1.5 billion Including - Wage bill: €472.9m • Medicines and surgical materials: €153m • Gozo General Hospital: €34.1m • Karin Grech Rehab Centre: €48m • Remote patient monitoring: €10.7m • Outsourcing of medical services to cut waiting lists: €14m Social policy: €2.3 billion Including - Retirement pensions: €833.8m • Widows' pensions: €200m • Children's allowance: €89.7m • Additional COLA: €48m • Out of home care programme: €6.2m • Public social partnerships: €13.6m Transport, infrastructure & public works: €328.2 million Including – Public transport subsidy: €55m • Tal-Linja card subsidy: €27.4m • Gozo Channel ferry subsidy: €14.7m • Fast ferry subsidy: €9.2m • Harbour ferry service subsidy: €600,000 • Grant for electric cars: €8m • Land transport initiatives: €5m • Maintenance of Ta' Qali National Park: €1.5m Home affairs, security & employment: €448.6 million Including – Armed Forces of Malta: €95.5m • Police: €117.3m • Civil Protection: €19.9m • Child Care for All: €54m • Jobsplus programmes: €16.5m • Payment to atypical workers: €7m • Correctional Services Agency: €31.1m Tourism & public cleansing: €217.2 million Including – Stipends to ITS students: €900,000 • Valletta management plan: €1.3m • Malta Tourism Authority: €135m • Malta Film Commission: €3.8m • ITS: €8m Environment, energy & Grand Harbour regeneration: €663.1 million Including – Domestic battery storage scheme: €6.2m • Energy support measures: €152m • Interconnect Malta: €6.3m • Project Green: €9m • ERA: €24.4m • Climate Action Authority: €3m • Charging pillars infrastructure: €6m • Waste to energy facility: €22m Finance: €1.3 billion Public debt servicing: €886.6m • Malta Tax and Customs Administration: €54.8m Education, sport, youth and research: €1 billion Wage bill education: €374.8m • Church schools contribution: €138m • Students' stipends: €42m • Private schools subsidy: €15m • Junior College: €11.5m • MCAST: €45m • University of Malta: €103m Income Expenditure Clyde Caruana is estimating a total outlay, including capital expenditure, of €9 billion next year with four ministries – health, education, social policy and finance – hitting more than a billion euros each. Other ministries Office of the Prime Minister: €209.7 million Heritage, arts & local councils: €175.9 million Foreign & European affairs: €79.7 million Agriculture, fisheries & animal rights: €144.4 million Social & affordable accommodation: €55.9 million Economy & strategic projects: €141.3 million Inclusion & voluntary organisations: €63.2 million Gozo & planning: €93.1 million Lands & implementation of electoral programme: €24.7 million Justice & construction reforms: €84.3 million Constitutional institutions Office of the President: €6 million Parliament: €15 million Ombudsman: €2 million National Audit Office: €6 million Standards Commissioner: €500,000