In his budget speech last Monday, the Minister of Finance John Dalli said that the Malta Development Corporation will continue focusing on attracting local and foreign investment by reviewing the package of incentives launched in 1988 "so that it would reflect present-day requirements", and that the new package "will make our country a place where an investor would have the highest profit at the lowest risks."

The Government also made a commitment to encourage e-commerce by revising the regulatory structure 'to enable this sector to operate from Malta effectively.' The Minister of Finance said the Malta Financial Services Commission will concentrate on e-commerce as one of the main sectors for attracting new investment to Malta. 'The Internet is today an effective method to buy banking, insurance and other investment products. This area is attracting the attention of many countries and is resulting in the creation of thousands of well paid jobs', Mr Dalli said.

Other aspects of the budget met with mixed reactions. Although most political parties and interest groups agreed that the austerity budget would keep Malta's economy on the road to recovery by controlling the deficit, views on the social impact of some of its measures were not so consensual.

Among the most controversial measures announced in the budget were increases in social insurance contributions, VAT on fuel and phone calls and income tax for higher income earners. Additional revenue will be raised from the privatisation of public companies, but the Government is being tight-lipped about which companies will be privatised and when.

Opposition Leader Dr. Alfred Sant called the budget "anti-social", and said it does not offer any vision for Malta as it does not include incentives to create more investment, despite the Government's positive words on reviewing incentives for foreign investment and e-commerce.