As it happened: Finance Minister unveils Budget 2025

Finance Minister Clyde Caruana presented the government's fiscal plans for 2025 on Monday evening.

What is usually a straight-laced, sombre affair began with a bang, when the speech was interrupted by Moviment Graffitti protesters who tossed flyers at MPs as they protested plans to amend the Villa Rosa local plan.

As it happened

Live blog ends

11.50pm That’s all from us tonight. We’ve got links to all our main stories concerning Budget 2025 at the top of this article. Thank you for having joined us.

Summaries of Abela and Grech's first takes

11.47pm We've got wrap-ups of the press statements Robert Abela and Bernard Grech gave following the Budget 2025 speech.

Here's Abela saying the 1976+ pensions measure won't impact those who keep studying and Grech saying the government's talk about quality seems to be a "fairytale".

Reactions to Budget 2025

11.27pm Here's how social partners, unions and lobby groups have reacted to Budget 2025.

Abela on pension age, Airbnb and the economic model

10.35pm Abela says those who start working late due to university studies will not retire later because the government covers NI payments for those in tertiary studies. He dodges a question about what happens to those who take a gap year.

There is no plan for the government to kill the Airbnb sector, Abela says, but it can be better regulated.

The government focus is to encourage people who reach the pensionable age to continue working, he says.

As for changing the economic model, Abela says this does not mean “shutting the door” on existing economic sectors, but rather raising standards in them and then looking at investment in high-tech, high-skilled sectors.

Back to the PM

10.20pm Abela described the budget as “the start of an action plan to solve [infrastructural] challenges.

Deputy PM Ian Borg recalled how the Opposition had promised to slash taxes but never done so.

And Finance Minister Clyde Caruana also said “talk is cheap” and noted that the PN had only raised the tax-free threshold by €1,500 in 17 years, while Labour had raised it by €2,900 in eight years.

The three of them spoke for more than 30 minutes. Now it's time for questions from the media.

How will tax changes affect your income?

10.01pm It's the thing everyone wants to know - how much money will the tax changes announced tonight impact them? Use our handy budget calculator to work out what's in it for you.

Robert Abela: A whole country will benefit

9.50pm Robert Abela is leading a post-budget press conference. Watch it in the video below.

MHRA: Wage regulations must not create shocks

9.48pm The Malta Hotels and Restaurants Association welcomed talk of revising wage regulation orders and emphasized the need for these changes to reflect the realities of the hotel and restaurant business.

“It is crucial that wage regulations do not create shocks in the restaurant sector; they should be evaluated to consider the unique nature of the industry, which often experiences concentrated activity on weekends. Additionally, the principle of equal pay for work of equal value must account for the nature of temporary workers in this sector.”

Gozo Chamber: Where's the hospital?

9.46pm The Gozo Business Chamber is pleased to hear of an OHSA office in Gozo and additional €1,000 grant for scrapping old vehicles on the island, but says it wanted to hear about a new hospital for Gozo.

The Chamber also noted that there was no mention of any investments in Gozo.

“The Chamber believes that the Gozo Innovation Hub has a strong potential that is currently underutilized,” the Chamber said. It praised the investment in the restoration of historical sites, the carnival and new museum in Gozo.

Cassola: Good but not enough

9.45pm Independent candidate Arnold Cassola says the income tax changes and additional children’s allowance are good measures, but might not be enough to cover rising housing and food costs.

He thinks the increase of €2.75 per week for pensioners is an “insult” and is also unimpressed by the measure that will require those born after 1976 to pay an extra year of NI to get a full pension.

There was also precious little about problems directly impacting people, he says.

“Will the construction mayhem stop? Will we start breathing clean air on 1 January 2025? My fear is that the answer will be…no.”

Grech: 'We're not about fairytales'

9.40pm Grech slams the government for 'misleading' people with empty promises and then quietly imposing new burdens on them. The PN will not govern using 'fairytales', he says, and will be straight-up with people.

Bernard Grech: Abela out to save his own skin

9.26pm Opposition leader Bernard Grech says the budget has positives, but it ultimately does not address the infrastructural problems that are damaging the country.

Quality was mentioned 27 times, he says. But the government didn't talk about how it will shift from quantity to quality.

"This is this government's 13th budget, but after all its promises it is admitting it has a problem it itself created."

Labour sweats it over 1976 measure

9.20pm Social media is ablaze over a measure we spotted which will require workers born after 1976 to pay an extra year of NI contributions.

Many have interpreted that as meaning they have increased the pensionable age by a year, prompting Labour and its representatives to scream FAKE NEWS.

Linking the measure directly to the pension age is misleading, but it will raise the pension age for some workers who did not join the workforce right out of university.

Those who start working aged under 23 will not be directly impacted by this measure, as they will have already paid 42 years’ worth of NI contributions by the time they reach the pensionable age.

But those who, for some reason or other took longer to join the workforce will effectively be required to work an additional year to get a pension.

Abela and Grech to lead press conferences soon

9.14pm The budget speech is over, but stay tuned – Robert Abela and Bernard Grech will both be leading press conferences soon.

Bulletproof is over the moon

9.04pm Local gym and fitness company Bulletproof says it has "made history" through the six-month free gym membership initiative announced for 18-20-year-olds.

Jumping for joy.

Forums Union Maltin: Mixed bag

9.02pm Forums Union Maltin welcomes the income tax reductions and increase in children's allowance to support employees and families. It's also pleased with incentives for retired workers to provide mentoring.

They are disappointed, however, with the 1976 measure that has sparked so much controversy on social media feeds.

Caruana concludes

9.00pm The minister began with a bit of a partisan flourish, and he ends with another one.

It was the Opposition that governed through austerity, he says, as he talks up Malta as an "economic miracle".

"Mintoff used to say 'Malta needs to learn to stand on its own two feet'. We did that and set off running," the minister says.

MUT reacts: What about school populations?

8.57pm Reactions have started pouring in.

The Malta Union of Teachers is broadly complimentary, noting mention of the new collective agreement for teachers and work on the 2024-2030 education strategy.

It says it would have liked to see more about addressing the growth in school populations, as well as measures to establish a better work-life balance through the right to disconnect.

Local filmmakers to get €2 million

8.55pm A Creative Malta grant allocation that will be used to fund local film productions is to increase to €2 million.

MCESD to get a CEO

8.52pm The Malta Council for Economic and Social Development is to get a CEO, the minister says.

And the government intends to establish a stage agency focused on research.

Tax-free tampons

8.50pm Women’s sanitary products are to become VAT-free. So too are products used by female cancer patients, such as bras used for mastectomy patients.

Fiscal incentives to restore old properties

8.49pm Fiscal incentives to restore old properties are to be renewed. These range from a capital gains tax exemption and a VAT refund of up to €54,000. These schemes will be subject to some legal changes to “clamp down on abuse”, the minister says.

OHSA to get a Gozo office

8.46pm The Occupational Health and Safety Authority is to get an office in Gozo. It boggles the mind that it didn't already have one.

Alarm buttons for domestic violence victims

8.44pm Here’s a novel one – anyone filing domestic violence reports is to be given a panic alarm button, which they can press to alert law enforcement.

The police are to open a second domestic violence hub in Mtarfa, having launched a first such hub in Santa Luċija this year.

Minister calls out 'fake news'

8.42pm Social Policy Minister Michael Falzon takes to Facebook to call out "fake news" about the 1976 change. It's not true that the pensionable age has been raised, he says. Which is true, provided you started working early enough. If you didn't, it effectively has.

Green talk

8.40pm Caruana is speaking about environment-focused initiatives that have already been announced. He also touches on initiatives to encourage pedestrianisation and waste reduction. There is nothing concrete and most of it has all been said before.

Focus on ferries

8.36pm There's a vaguely-worded pledge to focus on adding fast ferry routes and building underground car parks at existing ferry stops in Cospicua and Sliema. Read more about that here.

Lower subsidy for Electric Vehicles

8.34pm As we warned a few months ago, it looks like the well of EU funding for electric vehicle funding is running dry. And that means Malta, like many other EU member states, is tightening its EV subsidy belt.

Subsidies to buy an EV will now stand at a maximum of €8,000, rather than the previous €11,000 cap.

Caruana makes it a point to emphasise that anyone who bought an EV until today but will not get the car registered this year will still get the full €11,000.

Subsidies for pedelecs and ekickscooters will continue.

Subsidies for PVs, RO and wells

8.31pm Schemes for PV panels, batteries, RO systems, heat pumps, and the restoration of wells are to continue. No details though.

A Food Safety Authority

8.27pm We’re to get yet another national authority – this one focused on food safety. It will serve as a regulator in the agricultural and fisheries sector and also be tasked with assuring food security in case of crisis.

Producers will get (as yet unexplained) incentives to get rid of products close to their expiry date – either by selling at slashed prices or donated to charity.

Higher spending tourists

8.25pm Tourism will by the end of the year have contributed more than €3 billion to the national economy – a record, he says.

Caruana says tourist spending per capita is rising and by the end of August stood at €904 a head. That means an extra €56 million for Malta, he says.

Manufacturing

8.21pm The finance minister rattles off work and investment taking place in various industrial estates - these are investments that have been announced previously/separately.

He also says the government is committed to grow family office business, limited partnerships and offshoots of the gaming sector, including video gaming and esports.

A 'digital identity wallet'

8.18pm The government wants to develop a Digital Identity Wallet that will allow citizens and businesses “to share their digital identity safely, easily and securely”. The wallet will be in the form of a smartphone app.

So like your ID card, but on your smartphone?

Vision 2050

8.15pm The finance minister makes reference to a Vision 2050 policy document that will map Malta’s economic direction over the next decades. He says work on the "definition phase" of that document will be done by the end of Q1 2025.

The prime minister said last week that the policy would make Malta an EU “digital and green leader”. We won’t lie, that raised a smile among some of our newsroom members.

Videocalls with mental health professionals

8.13pm The minister unveils some measures focused on mental health.

A pilot project will involve local councils in offering mental health services close to the homes of those in need. And another measure will focus on outreach, with professionals speaking to people via videocalls.

This one came straight from the top

8.10pm If you were born in 2005, 2006 or 2007, you will be getting a free six-month gym subscription.

Here's more detail about how Malta's youths will get help to get stacked like Robert Abela.

Robert Abela showing the way.

Private sector to be used for public healthcare

8.09pm The government will be turning to the private sector to expand hospital emergency services, intensive care and acute psychiatric care. Tenders for those three services will be issued in the coming months, the minister says.

There will also be a €14 million cash injection to bring down waiting lists for certain operations.

No migration policy yet

8.05pm Anyone hoping the minister would unveil a new national migration policy today will be disappointed – the policy is still not quite done, it seems. Caruana says the policy will "take some hard decisions".

Getting kids to read

8.04pm Children raised in vulnerable families that qualify for scheme 9 assistance are to be eligible for a €150 ‘home library’ grant to buy books.

And all students – from primary to secondary school, irrespective of household income – are to get a €20 book voucher which they will be able to use at the 2025 National Book Fair.

Tax credits for private schooling

8.02pm Onto education. The minister mentions the collective agreement signed with teachers recently and then notes that tax credits for parents with kids in independent schools will rise.

Parents with children in private kindergartens will get a €3,500 tax credit, those in primary school will get a €4,600 tax credit and those in secondary school will get €6,500.

Partisan decibels

8pm MPs have somehow managed to stay quiet for the past hour or so, but that changed when Caruana noted that Malta's debt-to-GDP ratio stood at almost 70% when the Opposition was in power. Cue banging from one side, jeers from the other.

Deficit falling faster than forecast

7.59pm The deficit will drop to 4% this year, Caruana says, instead of the 4.5% rate originally forecast.

Malta is sticking firmly to the EU’s debt and deficit rules and will be slashing that rate to 3.5% next year, Caruana says. By 2025 it will be down to the required 3%.

Caruana is also bullish about the national debt, which has just gone past the €10 billion mark. The minister notes, as he always does, that it is the relative size of a country’s debt that matters.

Malta’s debt-to-GDP ratio stands at 50%, having risen from the 43% rate it stood at before the pandemic. The EU’s limit stands at 60%, he notes.

93% filed tax returns in time

7.55pm Caruana talks up tax enforcement efforts. The taxman has wrapped up 1,200 repayment plans with those who owed back taxes, and this year 93% of tax returns were filed in time.

That’s a huge increase from 2023, when 73% filed in time.

First-time buyers scheme to continue

7.53pm A first-time buyers property scheme is to be continued. First-time buyers will also continue to get a grant on their first residence and a stamp duty reduction.

A stamp duty reduction for second-time buyers will also be continued.

NGOs

7.51pm There will be a centralised database of volunteers that will allow NGOs to be matched to people with the skills they need. Companies will get a tax credit of up to €500 for any donations they make to voluntary organisations.

Incentives for elderly to live at home

7.48pm Senior citizens aged 75-79 who choose to continue living in the community will get a €350 payment, up from the previous €300.

Those aged 80+ will get the same €450 payment they received previously.

Born in 1976 and later?

7.46pm Here's one I missed in the flurry: anyone born after 1976 (that includes yours truly) will have to pay an extra year of NI to get a full pension.

Cheers, minister.

Disability allowance for children

7.42pm A disability allowance for children is to increase by €5 per week to reach €35 per week. 2,300 families qualify for allowance (or 2,510 children), the minister notes.

The criteria to qualify for a carer's allowance, given to parents who stay home to look after their disabled child, are to be broadened to allow more parents to qualify.

A tax credit given to parents to pay for specialised therapy is to rise to €750 (from €500).

Alex Borg flags Gozo capital spending

7.41pm Caruana is speaking about the details of disability and carer allowances.

Meanwhile, PN MP and Gozitan Alex Borg takes to social media to issue his first take of this Budget. Capital spending on Gozitan projects is down to pre-2020 levels, and down €4.75m when compared to last year, he says.

A new category of social benefits

7.37pm There’s a somewhat vague pledge to introduce a new category of social assistance, dubbed Social Medical Help. It will go to families whose working members cannot work for some sort of reason, and such families will receive an added €5 per member per week.

Fostering allowances

7.34pm Foster parents are to get an extra €10 per week, meaning their allowance will now stand at €120 per week or €6,240 per year for each child fostered.

COLA plus

7.33pm An extra COLA payment for vulnerable workers which we dub COLA Plus will remain unchanged – payments will top out at €1,500 per year and will be paid across two payments. The government reckons 100,000 families will be impacted (last year, they calculated it was 95,000) and will cost €48 million.

Marriage and IVF incentives

7.32pm It’s the same story for marriage: a marriage allowance is to increase by €170, meaning each partner will receive a €500 allowance for tying the knot.

And there’s another fiscal incentive for would-be parents. Those who opt for IVF treatment will get 100 hours of paid leave for each IVF treatment cycle they undergo. The mother will be eligible to claim 60 hours of leave, with the remaining 40 hours for her partner.

Make babies, make money

7.30pm For the past few years, the government has been paying parents €500 when they have a first child and €1,000 when they have a second.

It hasn’t done much to birth rates, which remain the lowest in the EU, but that isn’t stopping policymakers from throwing money at the problem: now, if you have child number three you’ll get €1,500.

Children's allowance to rise by €250 a year

7.28pm For a second year in a row, children’s allowance will rise by €250 a year. That’s a big increase when compared to the norm until a few years ago, when increases hovered at €70/€80/€90 a year.

Caruana says the measure will cost the government €16.5 million and 63,000 children from 42,000 families will benefit.

Getting pensioners to work

7.25pm Currently, pensioners who choose to continue working get a tax-free exemption on 60% of their working income. Now that capping is going to rise to 80%, to encourage more people to remain in the workforce.

People who didn’t pay enough National Insurance to qualify for a pension throughout their life are to receive a €1,000 bonus, up from the previous €600 if they paid nine years’ worth of NI payments. The bonus will be proportionately reduced for those with fewer NI payments. There are an estimated 16,000 people, mostly married women, in this situation.

Pensions up by €8 a week (including COLA)

7.20pm Pensions are rising by €8 a week when COLA is included. Given that COLA will be €5.24 a week, that means the actual rise in pensions is just under €3 a week. Caruana says pensioners will effectively gain €416 per year.

Widows will see an additional €3 per week increase, over and above the €8 rise. 7,500 widowers will be positively impacted, Caruana says.

Pensions will remain exempt of tax. Pre-1962 pensioners whose income would have exceeded the €23,500 annual pension cap will get an adjustment.

Public sector workers get private pension incentives

7.18pm We had revealed that the government wants to encourage take-up of private pensions. Caruana says the government will not be forcing private firms to introduce pension incentives, but it (the state) will be doing so.

Public sector workers who opt to take out a private pension will have contributions of up to €100 a month matched by the government.

How will income tax cuts affect you?

7.13pm Caruana provides some examples of how the tax cuts will impact a range of workers.

Workers on single tax rates will save anything between €435 and €675 a year, he says. Anyone earning over €19,500 a year will save €675. A couple in which both partners work and use the single computation will jointly save €1,350 in a year.

Married couples who opt to taxed according to married tax rates will save between €345 and €645 a year, with all couples earning over €28,000 to save €645.

Couples with children whose income is taxed based on parent rates will save between €375 and €650, with the max rate applying to all parents earning more than €21,200.

The minister says that families with two children and median income will end up with an additional €1,800 every year, he says. But that also includes additional benefits like children’s allowances, which he says will also increase (no details on that yet).

Read more about the tax changes in detail.

How income tax rates are changing.

Income tax cuts for workers

7.10pm Here’s the bit the government has been so keen to hint at over the past months – income tax cuts

. They’ve effectively simplified income tax brackets and increased the amount of income that is not subject to any tax. Income over €60,000 will still be taxed at 35%.

Caruana rattles off some figures – we’re jotting them down and will have details shortly – and says introducing the measure will cost the government €140 million.

By moving up the minimum amount of income that is taxable, 18,000 people who today pay income tax will as of next year pay none at all, he says.

COLA will be €5.24 a week

7.07pm Back to the budget. In real terms, the economy will grow by 4.9% this year and probably 4.3% the next. Jobs growth will reach 4.6% this year and 4.1% next year. Inflation will average around 2.5% this year, dropping further to the ECB’s 2% target in 2025, Caruana says – that’s assuming no major geopolitical disruptions.

The Cost of Living Adjustment, which is automatically calculated based on inflation rates, will be of €5.24 per week. All workers will receive this.

The minimum wage will increase by €8.24 per week to reach €221.78 per week. That’s in line with a four-year deal signed by the government and social partners last year. As was previously the case, the minimum wage will fall beneath the taxable threshold.

These are the flyers demonstrators threw at MPs

7.03pm Moviment Graffitti has issued a statement assuming responsibility for the interruption at the start of this evening's event.

It all centred on the government's push to revise the Villa Rosa local plan, ostensibly to help a developer get a mega-project through the PA's doors.

"Powerful interests have seized hold of politics and other institutions," Graffitti says. "We are not willing to live in a developers’ dictatorship and watch our country continue to be ruined by greed."

Graffitti also shared a copy of the flyer its demonstrators threw at MPs - a version of a popular Drake meme featuring Robert Abela.

The meme demonstrators threw at MPs.

Over to government finances

7pm With that prologue out of the way, the minister now turns his focus to national finances. In other words, GDP growth, inflation, the national debt and deficit.

Focus on 'quality'

6.57pm Dovetailing nicely with the Budget’s overarching theme [A country of quality], Caruana argues that Malta must focus on quality, rather than quantity – of work and workers.

Malta must enter the race to attract the brightest talents, he says, rather than race to attract the most low-skilled workers. That said, the government will fight abuse of any such workers, irrespective of nationality, he says.

Clyde Caruana, part-time polyglot

6.50pm The Finance Minister hammers home the challenges other member states are facing by reading news headlines about tax increases and spending cuts from across the continent: in English, Italian, French and German.

Back to square one

6.46pm The demonstrators have been escorted out, and the minister resumes his speech. In reality, he starts once again from the beginning.

A tussle to eject protesters

6.42pm Demonstrators threw flyers at MPs, who we're told looked completely baffled and taken aback.

There was reportedly some tussling as stewards worked to try and eject them - there were roughly eight in all.

Demonstrators interrupt the Budget speech. Photo: Chris Sant Fournier

Demonstrators interrupt Budget speech

6.40pm Demonstrators in the Stranger’s Gallery have interrupted the speech.

Chants of ‘You dance to developers’ tune [Tizfnu għad-daqqa tal-Izviluppaturi] break out.

It’s a Moviment Graffitti protest – they’ve uploaded a clip of the protest on their socials, and it looks like protesters donned pig masks.

Speaker Anglu Farrugia scrambles to suspend the parliamentary session.

A bit of rhetoric

6.39pm As is customary, the minister begins his speech with a bit of political rhetoric. He says the budget will slash taxes, raise pensions and shield people from energy and fuel price rises. No other EU country has done this, he says.

Clyde Caruana begins budget speech

6.37pm Clyde Caruana takes centre stage, and his budget speech can effectively begin.

A full House

6.35pm There are lots of people in the Strangers’ Gallery, it seems – and Speaker Anġlu Farrugia has told them that according to parliamentary rules, they must remain silent throughout and will be chucked out if they don’t.

Budget ads on state TV are partisan

6.30pm Here’s a bit of budget-related news: the government has been ordered by the Broadcasting Authority to stop airing a Budget-related ad on the state television.

The ad was partisan and therefore in breach of broadcasting rules, the regulator concluded. It’s not the first time the government has broken the rules when it comes to Budget-related advertising, by the way. It seems to happen every other year.

You can read all about the latest decision here.

What will this Budget unveil?

6.17pm Robert Abela and his government have made it a point to emphasise a much-vaunted income tax break that will be revealed tonight. But there’s bound to be more to the budget than that.

Will subsidies for EVs be retained? What about property-related schemes? Will there be any new or changed measures to encourage green initiatives?

And given the significant skills gap that employers consistently complain about, will the government be doing anything to encourage skilled people to continue working past retirement age – or to entice foreign skilled workers to relocate here?

Finance Minister enters parliament

6pm Clyde Caruana enters parliament, followed by his ministry's permanent secretary Paul Zahra.

He's got roughly 30 minutes to settle in and get comfortable before his budget speech begins.

Video: Jonathan Borg

What a tease

5.55pm The Department of Information has released an official portrait of the finance minister with his red budget briefcase, as well as a photo of copies of the draft financial estimates for 2025.

No sign of copies for public consumption yet, though.

The budget financial estimates document.

Clyde Caruana gives President a copy

5.10pm Finance Minister Clyde Caruana is currently inside the Grand Master's palace in Valletta, where he is presenting President Myriam Spiteri Debono with a copy of the Budget speech he will deliver tonight.

From there, Caruana will make his way to parliament, red briefcase in hand. And then it's onto the main event.

Finance Minister Clyde Caruana walks into the Grand Master's palace in Valletta on Monday afternoon. Photo: Jonathan Borg

Welcome

5pm Good afternoon, and welcome to this year’s Budget live blog. We’ll be bringing you minute-by-minute updates from the finance minister’s speech, during which he will unveil the government’s budget plans for 2025.

We're still roughly 90 minutes away from the main event.

As in previous years, once the budget dust has settled we will also provide a budget calculator that will allow you to easily calculate just how much money will be left in your pocket each month, once COLA and tax adjustments are taken into account.

The budget is being presented amid rising costs of basic necessities and increased frustration over mobility and traffic across the island.

Times of Malta has already reported that the government is planning to introduce a park-and-ride system to ease congestion in towns considered severe traffic hot spots.

However, the main focus is likely to be on an income tax cut that Prime Minister Robert Abela has boasted will be "the largest ever".

Every worker who pays income tax will benefit from the cut, Finance Minister Clyde Caruana has said.

The Opposition has urged the government to ensure Cost-of-Living-Adjustment (COLA) payments are deducted from income tax calculations and to offer tax credits to employers to help cover COLA costs.

It is unlikely Caruana will announce any incentive to that effect.