Students who start working later in life in order to further their tertiary studies will not need to retire later, Robert Abela said Monday night.

He was reacting to concerns after an announcement in the budget that those born on or after 1976 would need to pay social security contributions for 42 years in order to be eligible for a full pension. The limit is currently 41 years.

Abela explained at a press conference that the government covers national insurance (NI) contributions for students and people in several other situations and they would therefore still be able to retire on a full pension at the age of 65, even if they had not been employed for 42 years.

Finance Minister Clyde Caruana said the measure was part of a broader strategy aimed at balancing the growing demands on the pension fund with long-term sustainability.

In any case, those who started working aged 23 or under would likely not be impacted by the measure because they would have comfortably paid 42 years of NI by the time they reached pensionable age, Abela said.

Hospitals and infrastructure

Abela was also asked why the budget speech made no reference to the new Gozo hospital and St Luke’s hospital and why it said very little about addressing problems in the infrastructure and controlling unbridled construction, dust, pollution and noise.

He said many major capital and infrastructural projects were not mentioned during the speech because most of them would be funded from a €1.2 billion EU funding package the government secured last year.

As for construction, it was certainly not a good idea to put a stop to it, Abela said, but property development needed to have better standards, which was what the government was striving for.

During the press conference, which stretched till 11pm, Abela, Caruana and deputy prime minister Ian Borg all hailed the “biggest tax cut” in history announced in the budget, saying Labour was the only political force that truly understood people’s needs and could offer solutions.

“The measure means that 18,000 people will not pay income tax anymore as of next year,” Abela said.

Borg said people were realising only Labour could improve their lives.

“If we ever needed to confirm that, we did it tonight. We are showing you we have the solutions,” he said.

Caruana said the PN had a lot of cheap talk, but would not be able to match the government's economic vision and stability.

“I have absolutely no doubt that after tonight the PN will say that had they been in government, they would have given all that we gave in this budget and more,” he said.

“But talk is cheap. The facts speak for themselves – and it is the facts that define a party’s ability to lead well.”

Abela also pledged that Monday’s budget was the start of efforts to address people’s concerns – mainly overpopulation. Ministries would now roll out action plans to make sure the economy made a quality leap forward.

On tourism, the prime minister said the yardstick which would measure success would not be tourist numbers but tourist expenditure and how much added value was left in the economy.

On migration, he said the budget was the beginning of a process which would roll out an action plan to address and solve these challenges, ensuring that only the people which the Maltese economy needed would be attracted to Malta.