Issue link: https://maltatoday.uberflip.com/i/1544871
8 maltatoday | SUNDAY • 10 MAY 2026 ANALYSIS ELECTION 2026 or measures that favour inherit- ed wealth without exposing its own positioning. In recent years, Labour moved toward low-tax, property-friend- ly policies and broad-based growth distribution, narrowing traditional ideological distinc- tions between the parties. It has increasingly incorporated prop- erty owners, professionals and business interests into its elec- toral coalition. This constrains its ability to criticise the PN's trajectory. The PN, meanwhile, is in- creasingly defining itself as the political defender of property continuity, inherited capital and intergenerational wealth transfer. Rather than challenging inequal- ity, it is reframing it through the language of family protection and fiscal relief. The result is not a contest over redistribution in the traditional sense, but a divergence over fis- cal policy within a shared growth framework. PN's tax cut vs PL's super bonus This divergence is reflected in the parties' respective tax relief proposals. Labour's flagship €1,000 annu- al "super bonus" is universal. It is paid to all workers earning more than an annual €12,000 irrespec- tive of income. Those earning less are eligible for a pro rata €500. Labour's proposal does not dis- criminate in favour of low-income earners as its original tax rebate (the famous cheque) did but treats tax contributors equally. The logic is straightforward redistribution through cash transfers, immedi- ately visible in household budgets and politically easy to translate in- to daily life. Labour's advantage is its track record in honouring similar promises in the past. The pitfall is that the measure is being present- ed as a giveaway that does not dis- criminate between high and low income earners. The PN response is structur- ally different. Its income tax re- form focuses on adjusting tax bands rather than direct transfers, raising the 35% threshold from €60,000 to €80,000 and widening lower bands substantially. While presented as middle-class relief, which it is, the effect is skewed toward higher earners, who gain the most in absolute terms. The nature of a progressive tax system always results in greater absolute savings for higher earners when tax bands are adjusted but this time the change in the highest band skews it even further in fa- vour of the top tier. However, the PN proposal en- sures that lower-income house- holds—including those who fall below the taxable threshold— would still receive a €1,200 tax rebate. This means that while the lowest income earners would re- ceive a minimum €1,200 benefit, a parent with one child earning €80,000 would save €3,925 annu- ally, while a parent with two chil- dren on the same income would save €6,725. A single person with no children earning €80,000 would still benefit from savings of €2,850. In other words, Labour's super bonus extends the same level of income support to all tax payers while, the PN's proposal leaves more money for everyone but is skewed in favour of higher income earners. Curiously, while guaranteeing an annual saving of €1,200 for everyone, the PN's proposal was costed at a net €130 million, while Labour has costed its super bonus proposal at €200 million. The PN costings were questioned by Fi- nance Minister Clyde Caruana, who argued the PN measure was worth at least €360 million. He claimed the costings shortfall put into question the competence of the Opposition. The PN disputed the discrep- ancy with finance spokesperson Adrian Delia saying the minister ignored the government's own three-year tax relief for parents, which Caruana had costed at €160 million. The parent rate adjust- ments reach their full potential in 2028. Furthermore, Delia said the cost of €130 million was a net value after factoring in the money gov- ernment would claw back—esti- mated at around €70 million—as a result of increased consumption. Delia was uncompromising in his criticism of Caruana's critique: "The discrepancy is a figment of the minister's imagination." But even if these figures are tak- en at face value both the PN and PL's proposals come at significant cost in terms of monies which the state can use to finance public ser- vices and the welfare state, both of which are increasingly financed from proceeds derived from in- creased revenue generated from economic growth. Nationalist Party's tax cut vs < CONTINUED FROM PREVIOUS PAGE Alex Borg (centre) with Adrian Delia (left) and David Pace Ross unveiling the PN's overhaul of income tax brackets with a minimum saving of €1,200 Clyde Caruana (left) and Jonathan Attard came out criticising the PN's tax relief numbers The LNG storage vessel in Marsaxlokk Bay, which the PN says will be shipped out to Hurd's Bank with its plan to create a maritime fuel hub The PN has proposed a regeneration of the docklands in Marsa with the creation of a national hall and expo centre