Issue link: https://maltatoday.uberflip.com/i/205575
7 Budget 2014 Tax cuts on childcare centres Scicluna announced cuts in taxes for parents who send their children to childcare centres: the law already provides a reduction on incomes declared by parents who send their children to childcare. The reduction will increase from €1,300 to €2,000, and benefit those parents who pay for childcare from private centres. Less tax for women who work In a bid at increasing the rate of female participation in the labour market, from 2014 onwards, married women aged over 40 who have been inactive for over five years and whose salary does not exceed the minimum wage, will be allowed to pay a joint computation tax. This benefit will be availed of for a maximum of five years. Men with median salaries will be saving up to €800 in tax for every year on this joint computation. Youth guarantee Joseph Muscat's youth guarantee will be introduced in 2014 in a bid to assist youths who are no longer in education and who can receive training to find work. Scicluna said that youth unemployment in Malta was decreasing but that the government would still provide "individual attention" for 350 youths who are inactive or seeking jobs, so that they can continue studying or training for work. They will be paid €1,440 in the form of an educational investment. Total cost: €2 million. Employability index A new employability index will offer new guidelines for work opportunities available, for university students and youths to understand the economic opportunities available to them. More investment will go towards the ETC's Employment Advisory Services. Incentives for apprenticeships Government will invest €350,000 to incentivise employers who offer work placements and apprenticeship scheme. A new tax deduction scheme will give employers €600 for each work placement and €1,200 for each apprentice, with a total price tag for the exchequer of €1 million. Discussions are underway for a reform in the system of work apprenticeships. A new course at the Institute for Tourism Studies – Foundation in Tourism Studies – together with Malta Enteprise and the ETC, will allow students to acquire new skills to open up their own business, find work or keep studying in the field of tourism studies. Every student in the second year will also be given a work placement in the industry to acquire experi- ence in the world of work. Work for Gozitans A €1.1 million Work and Training Exposure Scheme has already been introduced in Gozo, which will be accompanied by the renewal of the Employment Aid Programme. Youth Entrepreneurship Scheme This scheme, launched by the preceding administration, will have €300,000 allocated. Training for unemployed workers The training and employment of unemployed workers aged between 45 and 65 will be incentivised through a deduction of €5,800 from income tax in the first two tears, that will generate €2,030 in savings every person who was previously unemployed. Apart from this, companies that employ these unemployed workers will benefit from an income tax deduction of up to 50% on the cost of training, capped at €400. Incentives for jobless Scicluna said that more workers on benefits and the unemployed had to join the labour market. "We are aware of abuses in the work register and we are going to fight this. Such abuse is unjustifiable for honest, hard-working taxpayers, but we know of situations in which people are genuinely not working because it pays them less. The difference between benefits and a wage is not enough to justify the necessary effort. This government wants to show these people that work pays." Scicluna announced a system where people on benefits will retain these benefits, which will instead be gradually reduced on a period of time. In the first year, beneficiaries will take 65% of their benefits, in the second year 45% and in the third year 25%. Employers will also receive 25% of the benefit every year for three years, with difference in benefits saved being poured into a training fund. Cost to the exchequer: nil. Training for single parents "We know there are people who want to blame single parents for everything… yes there are people who abuse, and we will take these abuses seriously, but we want to give a chance to single mums and dads," Scicluna said. The government said it will encourage single parents to improve their prospects, by receiving a credit of €200 to €1,000 – if they are receiving social assistance – when they enter into intensive vocational training, or take up a full-time educational course. Education and vocational capital spending Recurrent and capital spending for education will go up by 8.5% or €32 million, to go up to a total of €411.7 million, excluding the payment for childcare centres. A new €15 million spend on maintenance of current schools is already underway. Scicluna said the government will be devolving more power to teachers and heads of schools in carrying out their school programmes, and that a new school construction plan will also be presented shortly. Tablets for schoolchildren The bigger picture: deficit, debt, growth The 2014 Budget includes around 250 measures, which finance minister Edward Scicluna described as a "blitz" which are aimed at achieving the first phase of the government's programme The use of tablets in education, as announced in the elections, will be introduced in a pilot project that will test the application of these tablets for school pupils in consultation with teachers. Teachers' sabbaticals "We believe teachers are our best partners in education and we have to invest in them," Scicluna said, announcing talks with teachers' union MUT so that teachers can avail themselves of a paid leave to take sabbaticals related to their professional development. Vocational education certification Vocational education will be given through the use of workshops of MCAST, with vocational experience being certified at MCAST so that students can pass straight from secondary education into MCAST without the need to undergo a foundation course. PHOTOGRAPHY BY CHRIS MANGION pupils. This new programme is not expected to oblige teachers to take on new responsibilities but will take place in consultation with teachers. Teachers who undertake the monitoring of the Breakfast Club will be paid extra. maltatoday, TUESDAY, 5 NOVEMBER 2013 University of Malta Over €72 million will be allocated to the University of Malta and the Junior College sixth form, or 13% and €8.4 million over the amount allocated in 2013. "We want to help the University be stronger so that it can become more sustainable." Stipends with pro-rata COLA For the first time since 1999, stipends will be increased by 1.9% globally by giving students the COLA increase as from 1 January 2014, at a price tag of €250,000, apart from raising stipends for veterinary medicine students to €300. Individual Investor Programme The government is forecasting an estimated €30 million from the sale of citizenship to wealthy applicants. Scicluna said the scheme, which will charge €650,000 for the purchase of Maltese citizenship, would put Malta at par with such citizenship-by-investment programmes as employed in Canada, Portugal, Belguim and Singapore. "It is easy to scaremonger but this country has always won its challenges because it was not scared. Despite the irresponsible confusion being generated by critics, this government is convinced that this programme will be successful." Some €15 million is expected to be poured into a national development while the rest financing the budget. Tourism Priority to be given to the regeneration and management of Malta's coastal resorts. Attention will be given to the rehabilitaA new concept tion of the coast, which will be a 7.5% will include new income tax rate for beaches, and better footballers management of existing beaches. But no specific projects are men- Finance Minister Edward Scicluna JURGEN BALZAN THE Budget speech was dominated by the "making work pay" theme, and Finance Minister Edward Scicluna emphasised the government's aim to attract unemployed persons to the labour market through the introduction of a number of measures incentivising employment. In his Budget speech, Scicluna explained that the government had set six priorities in its first fully-fledged budget, which he said went beyond a simple "accounting exercise". "The government's first priority is to ensure that the government's expenditure reflects its means," Scicluna said, adding that if the country spends beyond its means it would be irresponsible. The other priorities at the top of the government's agenda are a reduction in the energy expenditure, economic growth, projected at a "conservative" 1.7% rate and a reduction in bureaucracy. The government is also prioritising the sustainability of social services, including health, education and pensions while diversifying the services and manufacturing sectors. "We are doing this in the belief that the government is responsible from creating an economic environment and regulation which allows the private sector to and investors flourish. We believe that the private sector is the economy's key motor." He added that the government was aiming at improving the country's quality of life and create "a stronger and more just Malta". Scicluna noted that although the international economy was showing signs of recovery, "instability was not over yet." Highlighting the high level of unemployment in the EU, Scicluna said that Malta had registered the biggest increase in employment within the EU28 in the second quarter of 2013. He also underlined the government's success in controlling inflation which shrinked from 2.9% in September 2012 to 0.6% in the same month this year. These achievements, together with the rate of economic growth and the stable flows of revenue and expenditure strengthened the government's belief that it would reduce the deficit to 2.7% of GDP by the end of this year. The projected growth of 1.7%,s although above the EU average, was a conservative estimate, Scicluna said. "Despite being optimistic that growth will exceed this forecast, we were prudent," Scicluna said, adding that the government's forecast was below that predicted by international agencies. The government revenue for 2013 is expected to reach €3.05 billion, with the expenditure standing at €3.23 billion. The deficit is set to be €191.3 million, Scicluna said. This would mean that the deficit is below the 3% target set by the EU. Moreover the government is projecting that this would be further reduced from 2.7% to 2.1% by the end of next year. The minister added that the government is aiming at reducing the budget by around €40 million to €151.7 million.