Malta's Prime Minister Robert Abela has promised that the budget, to be presented on 26 October, will deliver a "positive surprise" for households, describing the package as expansionary and designed to shield people with "positivity and confidence" despite a difficult international backdrop.
Speaking in a televised interview, Abela sought to soften the more cautious framing offered by Finance Minister Clyde Caruana, who introduced the pre-budget document on 30 September by emphasising responsibility and flexibility, and indicating that manifesto commitments would be phased in over five years. Abela clarified that Caruana's language did not signal a tight-fisted approach, but rather reflected the demands of the current environment.
On household finances, Abela confirmed that income tax for parents would be reduced from 1 January, while VAT and social security contributions would remain unchanged. Pensions would be strengthened, the cost-of-living adjustment paid, and social and health spending would receive what he called substantial priority.
Abela issued what he described as a "clear and absolute guarantee" that prices for electricity, water, gas, petrol and diesel would not change. Government subsidies in this area are currently running at around 400 million euros annually, with a similar figure projected for next year barring significant shifts in global conditions. He placed current inflation at 2 per cent, down from 2.1 per cent in August, and argued that removing subsidies would push retail prices upward, squeeze household spending and ultimately reduce government revenues.
On whether blanket subsidies were fair or risked encouraging waste, Abela maintained that restricting support to households alone would simply lead businesses to pass higher costs through to consumers.
Free childcare, public transport, public education and healthcare would all continue and be reinforced. Abela also referenced a tourism summit held in Malta that week, attended by around 1,000 delegates, and said tourist arrivals were on course to exceed four million this year, with spending reaching 3.9 billion euros in 2023 and 3 billion euros in the first eight months of this year alone.
He rejected any cap on visitor numbers, though he acknowledged that fiscal measures within the budget could be used to discourage disruptive tourism. On-the-spot fines would increase, and enforcement had already been stepped up in Swieqi following discussions with the local council.
Abela attributed a recent power cut to human error during testing and confirmed the second electricity interconnector would be operational by the first quarter of next year, adding 200 megawatts of capacity. Three new distribution centres would open shortly, with two further cables likely to follow for Gozo.
