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A budget for all

In these challenging times of global economic uncertainty and rising inflation, the path forward for governments has never been more critical. Traditionally, governments respond to such crises by introducing austerity measures, cutting essential services. However, as a nation, we have chosen a different path that focuses on unwavering support for our people and businesses. This choice has been possible due to the robust state of our economy and the prudent priorities we have set over the past decade.

Consider the significant impact of our decisions:

Energy cost savings: A measure that ensures growth

In times of rising inflation, we are making a crucial decision that supports the most vulnerable and provides the right impetus for a better quality of life and economic growth. We know that supporting consumers is paramount and cushioning energy costs is a very effective measure to alleviate financial burdens, particularly for an island state like ours that has to face additional challenges when compared to other states that are part of mainland Europe. As shown by the following examples, government aid in the form of energy support eased the financial strain in the most challenging of times.

For a two-person household, the annual energy consumption averages €403, reduced from €822 thanks to government assistance. This translates to more than 67,000 households across the country collectively saving €28 million in energy consumption.

Without government aid, a family of three with an average annual energy consumption of around €526 would be paying €1,044 per year. This is the case for around 50,000 families across the country, collectively saving an impressive €26 million in energy consumption.

In the case of a family of four, the average annual consumption is of approximately €672 for electricity, as opposed to €1,275 if there was no government aid. This leads to over 36,000 families who collectively are saving a substantial €22 million in energy consumption annually.

These savings on energy bills directly impact households’ financial well-being, allowing them to allocate resources to other expenses like food, housing, and education and other expenses that can boost quality of life and help our economy grow. They should also be considered alongside other measures introduced for Budget 2024, including the increases to the children’s allowance, the cost of living adjustment mechanism, increase in pensions, students’ stipends, housing support and more.

Economic prosperity through support and innovation

Moving away from measures of austerity and supporting our families and businesses is bearing fruit. It is why the Maltese economy has flourished and grown 10 times the European average. We have cushioned the blow to the economy, which other countries are experiencing. A healthy economy has allowed the Labour Government to implement support measures across the years.

Eight years ago, energy bills were cut by a remarkable 25%. For businesses, this meant an annual saving of €50 million. This allowed businesses to breathe and invest in their growth, rather than being burdened by exorbitant energy costs.

Then came the vital decision to keep electricity bills stable despite international oil price fluctuations. For all types of businesses across Malta and Gozo, this meant savings of €370 million between June 2021 and June 2023. Savings that helped protect jobs and are being reinvested in companies.

The energy support will continue next year – an allocation of €340 million against the rise in electricity, fuel, and LPG prices. This financial buffer is a lifeline for businesses and households, enabling them to weather the inflation storm.

This support-driven policy has played a pivotal role in propelling our economy, with growth rates surpassing the European average. While in Germany, the growth of Gross Domestic Product could shrink, in Malta, it is growing. 

Our political decision is about preserving our business community’s resilience – this government will never agree to a policy that creates instability. Most of us remember still the years when Budget Day meant cuts to social support, and increases in taxes and utility bills. We also recall the times when drivers had to queue up at fuel stations to fill up their cars, fearing an imminent price hike in fuel prices.

I look forward to an economy that creates quality employment, one that is more knowledge-based and driven by the workforce’s skills and we are working hard to achieve this. Malta Enterprise’s collaboration with INDIS and STMicroelectronics, for research and development projects is a prime example of this. We are committed to making Malta a research and innovation centre in the field of semiconductors and microchips. This means more investments, knowledge-based jobs, and opportunities for businesses and individuals.

Our path is one of resilience, growth, and unwavering support for our people and businesses, all based on the principles that investing in our future and the quality of our workforce is the key to prosperity for all. 

In these challenging times, our choices show clearly our commitment to the well-being of our citizens and our determination to build an economy that thrives. As we face the complex challenges of the global economy and rising inflation, our approach has been clear: we choose support over austerity, investment over cutbacks, and innovation over stagnation.