Budget 2021: An economy centred around Covid-19

Miguela Xuereb

Minister for Finance Edward Scicluna said in Parliament that the wage supplement will continue until March 2021 and then a stock taking of the situation will be made. In his speech on the Budget for 2021, Minister Scicluna said that the situation will continue as it is until December, evaluating the possibility of adjustments. He said that the situation also depends on the companies’ returns as they close their annual books. Then, the real situation will be assessed and which sectors need more help than others. He stressed that the idea of a wage supplement is meant to retain the productive capacity of the country intact.

Minister Scicluna referred to the project REACTEU through which the EU is giving Malta €120 million in cash, as he put it ‘without strings attached’. Based on the principles of recovery and resilience, the Minister said that the expenditure will be linked to projects and have to be against something infrastructural.

Key points:

Economy

  • Start of a study of a mass transportation system.
  • Assistance to new start ups, helping ecommerce, helping companies that employ under 50 persons.
  • VAT exemption to rise from €20,000 to €30,000.
  • Strengthening of the maritime registry aiming at the super yachts market.
  • Air Malta submitted a request for state aid, and this is awaiting EU Commission approval.
  • Tourism in a new context and assisting the industry to become carbon neutral.
  • Increase connectivity between Gozo and Malta.
  • Investment in the digital sector in the tourism industry.
  • Green Economy measures to include a low carbon development strategy to reach internationally agreed targets and the issue of Green bonds for incentives on green economy. Green bonds financing green economy.
  • Continue work on Waste-to-energy plant to generate electricity from waste recycling.
  • Single plastics: stop importation on single plastic use, by the end of 2022 sales will stop.
  •  Car scrappage scheme extended to highest €7,000 (€1.5 million).

Education and health

  • €20 million spent to make schools in line with health guidelines, to increase because MEDE is in discussions with church and independent schools to see if they will be assisted.
  • Health sector will see the National Formulary (medicines recognised by government) extended to include new medicines especially medicine used in cancer treatment.
  •  NGOs which have an income below a certain threshold will be exempted from tax.