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11 maltatoday | TUESDAY • 28 OCTOBER 2025 EDITORIAL CLYDE Caruana had a clear target in mind when delivering Budget 2026—families with children. The finance minister delivered on his promise to give these families a significant tax cut. Spread over three years, the adjustment in tax brackets for parents will leave them with more money in their pockets to meet the financial de- mands of raising children. The income tax measure will leave €160 million in people's pockets over the next three years—a significant and ostensibly unprecedented boost to thousands of families with children. Suffice to say that for individuals with two or more children, who pay tax at the parent rate, the tax-free portion of their income will go up to a whopping €30,000 by 2028. This represents a massive breather, which will go a long way to support these families. And for those who earn below the €30,000 threshold, the Children's Allowance will in- crease by €250 per child. The baby bonus that is paid out on the birth of a child will also increase to €1,000 for the first child from the current €500. There will be higher bonuses for those having a second child and more. In his speech, Caruana said the government was adopting a political approach that "defines what type of country we want to leave our chil- dren". He underscored the challenge posed by the low fertility rate, insisting the government will not fear taking the "courageous decisions" to tackle the biggest challenges of the future. The delivery of a second massive tax cut one year after cutting income tax across the board, is a courageous move indeed within the context of global economic challenges. Undoubtedly, the tax cut for parents and other measures targeting children and youths have an immediate impact—they alleviate the burden for those in the middle class who already have chil- dren. They are measures that try to address the demographic challenges Malta is facing. However, whether these fiscal benefits will be enough to encourage more people to have children remains to be seen. The measures will undoubtedly fall in the positive column when couples sit down to plan their future as a family but a more holistic approach is needed to make Malta a more child-friendly society. Having enough income is just one part of the equation, albeit an important one. Having an ad- equate work-life balance is another major issue for prospective parents and addressing this will require bolder social and economic measures. Having 12 months of paid parental leave for each of the couple upon the birth of a child; workplaces that are incentivised to champi- on flexibility; free childcare centres with more flexible hours; a shorter work week; more open spaces closer to home; safer, liveable communi- ties… these are just a few of the measures that could go a long way in creating a country where having a child becomes an easier choice to make. Budget 2026 sets the right tone but if the fer- tility issue is to be addressed concretely, the changes cannot stop at the fiscal level. What is required is a change in lifestyle, something that takes its time to evolve and depends on the aspi- rations and expectations people have. But achieving this step change requires more than just a government that offers support through fiscal incentives and measures. It also requires employers to play ball; to understand that productivity can improve if workers are happy with their lives. Budget 2026 must not be viewed as the be all and end all; it needs to be part of a medium-term plan to improve the quality of life and create a work-life balance that is sustainable across the board. Budget boon for families but will it lead to baby boom? maltatoday MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING EDITOR: SAVIOUR BALZAN EXECUTIVE EDITOR: KURT SANSONE EDITOR: PAUL COCKS Tel: (356) 21 382741-3, 21 382745-6 Website: www.maltatoday.com.mt E-mail: dailynews@mediatoday.com.mt but as productive infrastructure, the backbone of human capital. Infrastructure continues to dominate public investment, visibly shaping the island's landscape. Roads, ports, and public transport improvements fea- ture prominently, but the system re- mains reactive rather than strategic. Congestion, fragmented planning, and car dependency persist. Malta must evolve from building more to manag- ing better. Infrastructure policy should be guided by integration; connecting transport, housing, and environment into a coherent national mobility plan. Success will depend not on kilometres built, but on efficiency, accessibility, and quality of life achieved. Beyond the visible projects lies a qui- eter but decisive factor: governance. Institutional quality determines how effectively policy becomes progress. The budget speaks of efficiency and digitalisation but avoids deeper re- form. As both the European Commis- sion and the IMF repeatedly note, gov- ernance and delivery capacity remain Malta's structural bottlenecks. Trans- parent procurement, independent oversight, and policy coherence are not administrative luxuries, they are preconditions for sustainable growth. Long-term projects such as the logis- tics hub, aviation cluster, and life sciences park point toward a more di- versified economic future. Each carries potential to elevate Malta's position as a regional innovation and connectivity hub. The risk is execution, that these initiatives remain projects on paper rather than engines of transformation. To succeed, they must be integrated into a coherent economic narrative, underpinned by talent, technology, and trust. Overall, this is a budget that reas- sures more than it reinvents. It reflects a government intent on maintaining balance; fiscal, social, and political; in a period of global flux. It offers re- al benefits to families and businesses and reinforces the country's tradition of social stability. But it also sidesteps the structural shifts that Malta's ma- turing economy now demands. The time has come for Malta to evolve from managing prosperity to shaping it. Stability is valuable, but strategy is vital. The next phase of the Maltese story will depend on courage, the courage to reimagine the model that has served the country well but is showing its limits. Reform, innova- tion, and institutional credibility are not abstract ideals; they are the condi- tions for sustained progress. Budget 2026 succeeds in preserving confidence, but it postpones transfor- mation. It will definitely be labelled as one the most socially ambitious budgets. However, the question now is whether future budgets will continue to protect comfort or begin to create structural change. Malta's success has always been built on adaptability. The coming years will test whether that adaptability still defines it. The measures will undoubtedly fall in the positive column when couples sit down to plan their future as a family but a more holistic approach is needed to make Malta a more child- friendly society