The 'threat' of social benefits

Are social benefits really beneficial to society at large? This was the theme of a discussion programme aired on TV earlier this week. I sat on the panel supporting the idea that social benefits are part and parcel of the so-called welfare state. Others had expressed a different point of view in the sense that, considering the present economic climate, social benefits have become a financial burden on the nation's coffers. The millions of liri voted to cater for our social security system, comprising both contributory and non-contributory benefits, have become unsustainable through lack of accountability and mismanagement, and therefore more wealth could be generated if we were to eliminate social benefits.

All members of the panel agreed to a certain degree that the time is ripe for all stakeholders to revisit the present system with a view to make it more socially sensible and economically viable.

It was pointed out that the major problem within our system is the lack of audit trail and effective enforcement in cases of abuse, coupled with the absence of a proactive commitment towards educational programmes aimed at acknowledging today's lifestyle and different needs as compared to the circumstances prevailing when the first social benefits were introduced some 50 years back.

The unemployment benefit, the social assistance granted to single parents and the invalidity pensions were mentioned as concrete examples of how the social protection system could not meet its purpose and instead is causing unnecessary burdens on society at large that is forced to make up for the exorbitant costs through increased taxation.

It is a fact that practically there is no difference between the minimum wage and the social assistance benefit for the unemployed. It is also true that single parents tend to become dependant on social benefits, and we have to admit that the number of those receiving the invalidity pension is too high and definitely unrealistic.

No wonder that the radical right claim that the welfare state has undesirable effects in practice. They also argue that economic development is more important for welfare than social provision. They contend that welfare violates the people's freedom and consider redistribution as theft and taxation as forced labour. According to them, the market economy is essential for growth and so for the protection of the poor.

In social terms, the welfare state is accused of fostering dependency and trapping people in poverty. These are the emerging trends which are "threatening" the welfare state and it is not a coincidence that our politicians are now talking about the "welfare society" and the individual's right to secure "self protection".

Fortunately, we have a tradition of welfare economics. Welfare or social protection is understood in terms of "utility"; people's wellbeing or interests consist of the things they choose to have. It refers to the range of services that are provided to protect people in a number of conditions including childhood, sickness and old age. Welfare goes beyond what people need; to achieve wellbeing, people must have choices and the scope to choose personal goals and ambitions.

Our social protection system is based on three fundamental concepts: humanitarian, democratic and practical. Concerns about poverty and need have been central to many developments and evolution of our social benefits; social security has developed in tandem with democratic rights; welfare provision has economic and social benefits. We have less poverty now due to our extensive system of social protection. The real disputes are not about whether welfare should exist, but about how much provision there should be and how it should be done.

Within this context, we need to review our social protection system. We do not need to reinvent the wheel! Perhaps we could get the best advice from the European Union as outlined in the document A Modern Social Dimension For Europe: Principles For Reform. It unequivocally states that high levels of unemployment and inactivity are now in themselves a direct threat to the sustainability of Europe's welfare state. Achieving a higher employment rate must therefore be the overriding priority.

A job is the best route out of poverty and dependency. The focus of the welfare state must be on encouraging and enabling people to move from inactivity to employment, from welfare to independence, while continuing to support those who cannot work. Incomes of vulnerable groups must not be allowed to fall so far behind the typical family as to leave them socially excluded. The aim must be full employment with adaptable and inclusive labour markets.

The national welfare state should be a ladder of opportunity not a safety net; balancing rights with responsibilities and ensuring solidarity between the generations. Respect of society for the individual must be matched by the respect of the individual for society.

matyas@maltanet.net