As Malta unveils its Budget for 2025, questions arise about whether expanded tax bands and minor social benefits can offset the relentless rise in the cost of living. Arnold Cassola has raised serious concerns, particularly for vulnerable groups, about the budget’s effectiveness in meeting essential needs.
The government’s decision to widen tax bands will grant working families and individuals an average of €450 in additional yearly take-home pay, a step seen as positive. Similarly, an extra €250 per child in children’s allowance aims to support young families. Yet, Cassola questions if these measures can truly counterbalance the weekly rise in staple food prices, housing costs, and other essentials.
“The €5.25 weekly Cost of Living Adjustment (COLA) is small, and taxing this increase only further strains those already grappling with Malta’s high expenses,” Cassola commented.
Pensioners, especially those born before 1962, are among the hardest hit. Despite an attempt to bridge the pension gap with an €11.25 increase, around 26,000 pensioners still face a €61 weekly shortfall compared to their post-1962 counterparts, while many more receive nothing. Cassola criticizes the government for “stealing” two years’ worth of pension contributions from workers who paid social security between ages 16 and 18. Additionally, those born post-1976 face an extra year of National Insurance payments to qualify for a full pension, adding further strain on younger generations.
Among positive developments, the budget’s enhancements for disability support include an increase to the Enhanced Severe Disability Supplement, now set at €199.61 per week, with an additional €5 weekly for the disability grant. Those caring for two dependents will also benefit from an increased Carer’s Allowance, now at 1.5 times the standard rate.
On cultural and educational fronts, Cassola described the €2 million allocation for local film production as “a pittance,” calling for more substantial funding. While he praised the government’s timely finalization of collective agreements for public employees, he criticized ongoing delays in addressing contracts for MCAST staff and government teachers.
Cassola also pointed to “phantom projects” – long-promised ventures such as Gozo’s new courthouse, electric car charging infrastructure, and Floriana’s and San Gwann’s new gardens – as examples of commitments that remain unfulfilled year after year.
Notably, promised developments like the new mental health hospital and northern polyclinic have seemingly vanished from planning discussions.
In his closing remarks, Cassola raised key questions about the quality of life improvements pledged by the government, highlighting ongoing issues like Malta’s traffic congestion, air quality concerns, and unchecked construction.
He remarked skeptically, “Will the widening of tax bands be enough to cope with the rising cost of living? And where is the quality of life this budget promises?”
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