In today’s Malta, around 72,000 persons are at risk of poverty and around 3.3 per cent of the population is severely deprived. The latter figure is better than that of previous years, but this is no consolation for those who are facing daily misery. In view of Malta’s upward inflation rates, one also awaits the publication of more recent statistics.
In this regard, the government did introduce some positive measures in the past years. The most obvious one is free childcare centres for parents who work, though I believe that this be extended to all parents, so that all children can benefit from the service.
Another is the tapering of benefits, which intends to make work pay for persons who were erstwhile dependent on social benefits through in-work benefits such as the temporary retention of benefits over a three-year employment period.
Consequently, welfare-dependent persons decreased by 43 per cent to 7,940 over a six-year period. Still, I ask whether such persons are being employed in jobs which are decent, whether the government’s concurrent methods for removing persons off welfare benefits are based on dignified methods and whether some people are shifting from the official welfare system to the underground economy. Qualitative sociological research in this regard could provide relevant data.
According to the European Commission, Malta is also awarding inadequate pensions, and latest Eurostat figures confirm that the price of utility bills increased by 7.1 per cent between 2016 and 2017. The price of housing is shooting upwards: the most recent Global House Price Index by Knight Frank says that house prices in Malta have increased more than in any other country in the world.
The latter may bode well for property owners, and one wishes them well as regards their economic investment, but on the other hand it is resulting in new forms of poverty such as the impossible situations faced by young people who wish to start an independent life and by elderly persons who live in rented property.
In the meantime, inflation in Malta keeps going up. According to Eurostat the Maltese rate now reads 2.4 per cent as at August 2018, double the figure of August 2017 and higher than the eurozone average of two per cent. The eurozone inflation rate decreased by 0.1 per cent to two per cent in August compared to the previous month, whereas the Maltese rate increased by 0.3 percentage points in the same period.
The highest increases in Malta were in the prices of restaurants and hotels, transport and food and non-alcoholic drinks respectively, whereas the highest decreases were in the price of clothing and footwear. Fuel prices have increased too, adding to woes of drivers in Malta’s congested traffic jams.
Last year’s budget gave a cost-of-living adjustment (COLA) weekly payment of €1.75 to workers, and government topped this up by another euro in what seemed to be an admission of faulty methodology in the COLA mechanism. In previous years the COLA payment was of €1.75 in 2017 and 2016 respectively, €0.58 in 2015 and €3.49 in 2014.
I endorse trade unions’ request for a revised and realistic COLA mechanism. Basic items such as food should have more weight in the basket of goods as they make up for a greater percentage of expenditure of low-income earners.
I also believe the government should give decent increases to pensioners. Let us keep in mind that the latter tend to be involved in much invisible and unpaid work ranging from taking care of grandchildren to voluntary work. But they then face increased costs in goods and services from healthcare to leisure. The government should also kick-start a proper debate on sustainable pensions in the spirit of national consensus.
Other budgetary measures which I would expect include proper assistance to current and prospective tenants who cannot afford rent prices. This method could be introduced without distorting the property market. The government should also settle the utility bills controversy by refunding the thousands of people who have been receiving higher bills through an illegal mechanism.
Malta’s economic growth should be enjoyed by everyone. The government is increasing people for the economy: what we should have is an economy for the people.
