Malta spending far less than EU average on social protection

Malta is spending much less than the EU average on social protection, including social benefits such as family and children allowances, sickness benefits, pensions and housing.

According to the latest data on Social Protection And Funding In The EU In 2005, issued in Brussels, Malta ranks in the middle ground when compared to the other EU member states, dedicating 18.3 per cent of its GDP to social protection. The average in the EU stood at 27.2 per cent.

However, over the previous five years, spending on social protection in Malta increased at a faster rate than the EU average, standing at 2.8 per cent annually compared to 2.1 per cent in the EU.

Eurostat said that Malta derives social services funding from two sources. Thirty-five per cent comes directly from the government's coffers, that is, from taxes, while the rest, 65 per cent, is derived from social contributions paid by workers, employers and protected persons including self-employed and pensioners.

The situation in the EU differs substantially among member states.

In 2005, social protection expenditure as a percentage of GDP was above 30 per cent in Sweden (32 per cent), France (31.5 per cent) and Denmark (30.1 per cent) and below 15 per cent in Latvia (12.4 per cent), Estonia (12.5 per cent), Lithuania (13.2 per cent) and Romania (14.2 per cent).

Eurostat said that the disparities reflect differences in living standards but are also indicative of the diversity of national social protection systems and of the demographic, economic, social and institutional structures specific to each member state.

In 2005, social protection expenditure per capita in PPS (purchasing power standards), which eliminate price level differences between countries, was more than 10 times higher in Luxembourg than in Romania.

The highest spending in PPS per capita was in fact recorded in Luxembourg at more than twice the EU27 average, followed by Denmark and Sweden, both at 40 per cent above the average.

The lowest spending was found in Romania (18 per cent of the EU27 average), Bulgaria (21 per cent), Latvia (23 per cent), Lithuania (26 per cent) and Estonia (29 per cent).

Malta again stood in mid-ground, spending half as much (51 per cent) as the EU average.