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Our country’s best days

Now that Government has succeeded in achieving a new level of growth for the Maltese economy while obtaining the desired fiscal position, it can afford to focus more on improving the take-home income of Maltese and Gozitan families. This will ensure that everyone living in our economy is enjoying a higher level of income enabling them to live more comfortably. This will be achieved through a series of measures intended to strengthen our commitment on making-work pay by reducing the burdens on work.

 

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Indeed one of the measures we are proposing is the income tax refunds initiative which would be implemented during the next legislature and would see around 190,000 taxpayers, benefitting from annual refunds ranging from €200 to €340. This measure will not only ensure that those that earn the least will be given the highest refund but also that working families who do not pay tax would still be eligible from the new measure. More specifically, persons on married computations earning €60,000 or less will receive an annual refund of up to €340. Persons on single computations earning up to €60,000 will receive an annual refund of up to €300 while those on parent computations earning up to €60,000 will receive an annual refund of up to €320. The refund would be the highest for those on the lowest earning scale.

Persons working part-time would also benefit from these proposals with the government pledge of a 5 percentage points reduction in income tax for part-time workers. This means that around 28,521 part-time workers would pay 10 per cent tax rate on their incomes as opposed to the present 15 per cent rate. Again here the objective is to make work more attractive by increasing the disposable income of part-time workers.

Furthermore, cognisant of the fact that now that Malta has achieved a new higher level of economic growth and families are therefore enjoying a higher standard of living giving them more time to spare for leisure activities, all workers will be given what was taken from them during a Nationalist Government. That is, public holidays which fall on weekends will again be given as public holidays. From the perspective of the company, this is equivalent to a wage compensation or a fringe benefit which is given to employees when productivity levels have increased. Thus, given the current dynamic labour market with consistent rises in productivity levels, this measure, will be do-able by companies, if adequate notice and foresight is given.

Pensioners will also see an increase in their pensionable income enabling them to live more comfortably as we intend to increase pensions gradually to €8 per week, in line with the recently-agreed increase in the minimum wage.

We want to continue enhancing the quality of our labour force by investing further in education and increase the number of persons enrolling in tertiary education. This will boost our economy’s competitiveness level by boosting labour productivity. Given that, persons who continue to pursue their studies have to forego the income they would have earned from working, the Labour Government is proposing a maximum of two years exemption from paying income tax for those who obtain a Masters or a PhD.

A new higher level of economic growth needs to be upped by a supporting infrastructure. In this light, a Labour Government would focus on the infrastructure of our country during the next legislature. Indeed, we are planning to resurface all of Malta’s roads in what would be the biggest ever investment on the roads in our country.

All these announced measures have been costed and evaluated thoroughly to see their effect on economic growth and public finances. Indeed, it is estimated that the fiscal and infrastructural measures would increase the rate of economic growth by around 2.0 to 2.5 per cent. This would increase our country’s economic growth from an estimated average of 4 per cent to a growth rate between 6 to 6.5 per cent. This rate of growth would ensure that the fiscal surplus achieved is sustained throughout the next legislature and as a result the debt burden on our and the next generation would continue accelerate downwards.

Additionally it will ensure that Malta will continue to grow at a higher rate than the advanced EU member countries, auguring well for convergence to the EU average income. This shows that the measures are financially and economically sustainable and will eventually lead to higher level of wellbeing and quality of life for Maltese and Gozitan families. These will be our country’s best days.

 

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– Monday, 8th May, 2017


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