Role of the Department of Industrial and Employment Relations

The Ministry for Finance
The Annual Budget establishes the public spending for the upcoming year in line with the Government’s overall priorities and economic and social objectives. The process is spearheaded by the Ministry for Finance; however, the final budget document reflects extensive consultation and liaison with all relevant stakeholders.
The formulation of the budget is the first step of this process and is initiated by the Economic Policy Department’s macroeconomic projections. These predictions outline the state of the economy and project the expected revenue for the Government. The Budget Affairs Division then steps in to strengthen the forecasts by supplementing data on revenue and establishing the upper spending limit, commonly referred to as the expenditure ceiling. Simultaneously, it asks ministries to submit their business plans.
In this regard, Ministries and Departments outline their priorities in a three-year business plan, while providing details on their planned expenditure and the projects and initiatives they will pursue with the allocated funds. Subsequently, bilateral meetings with the Ministries are held by the Ministry for Finance to further discuss the business plans.
Consultation is key in the preparation of every Budget. Indeed, in preparation for the annual budget, the Government issues a pre-budget consultation process to engage in discussions with the social partners and all the interested stakeholders as well as with the general public. Dialogues are held with wide-ranging sectors in society that represent economic interests, employee rights, and general societal wellbeing.
The annual draft budget document is then presented to the Cabinet of Ministers and subsequently submitted to the European Commission for evaluation. Thereafter, the budget document is presented to Maltese Parliament, where it is discussed and a vote is taken. Once adopted, Government Departments focus their energy on implementing and monitoring the budget measures and initiatives in the various sectors falling under their remit, including health, education, social security and housing, the environment and infrastructure.
Examples of Budget Measures for 2025
In its 2025 Budget, the Government emphasised the importance of occupational pensions since they enable future pensioners to have adequate income in retirement.
The Government’s ultimate goal is that every employee entering the workforce or changing jobs would have the opportunity to invest in an occupational retirement plan. Employers will not be required to make contributions; however, they must provide employees the opportunity to join a plan. The Government will lead by example by offering to match the public sector employees’ contributions up to a €100 limit per month. This measure aims to safeguard the employees’ future pensions and, therefore, their quality of life after retirement.
Pensioners’ income has been once again increased while, at the same time, continuing to be tax exempt. Similarly, widowers’ pensions have also been strengthened to alleviate some of the financial burden on the most vulnerable. Moreover, active pensioners opting to remain in employment will also benefit from increased tax cuts.
Another budget measure announced for 2025 was the restructuring of tax brackets for individuals or households. This includes wider tax-free brackets for all three tax computations: single, married or parent.
These are but three examples of employment and social initiatives that the budget touches upon. The Government’s priorities may differ from year to year; however, the established budgetary process in place guides the Public Sector to prepare and successfully deliver the budget plan each year.