Following the analysis by The Sunday Times of Malta on the impact of the 2016 Budget on four households, the government is presenting its own assessment

The choice of the households is not representative, the government said, claiming some inconsistancies in this newspaper’s analysis, which presented two households with two earners.

In the first, the total household income is €63,422. This is 2.25 the average household income in Malta. The second two-person household had a combined income of €53,422. This is 1.81 times the average.

These households are in the top part of the income distribution.

One would expect that at least one of the selected households would be earning the average income – just below €30,000. Similarly, one would have expected that since one in four Maltese is a pensioner, there would have been at least one pensioner family presented.

Tapering is meant to aid individuals off benefits

The Sunday Times of Malta seems to believe that three out of four Maltese households smoke, when according to Eurostat data, only one in four smoke.

Although some of the households described by this newspaper have a car, the exercise fails to take into account the impact of the reduction in fuel costs.

Another defect in its exercise is that while additional tax arising from the cost-of-living-adjustment was included among the Budget’s negative, no account was taken of the boost in income due to the COLA itself.

As for Joseph and Maria, once COLA and the drop in fuel costs is accounted for, the 2016 Budget leaves the couple with just €10 less than their income in 2015. This is solely due to the fact that one of their children has left childcare and goes to school. However, if Joseph and Maria really existed, they would not expect the State to continue giving them a €2,000 childcare rebate for a service they no longer use.

The case of David and Therese, the parents of a disabled child, once again ignored COLA’s positive impact, while including additional tax paid on this. Similarly, the reduction in fuel costs was ignored. Together, these factors would see a net improvement of €130, on top of the €255 net improvement calculated by this newspaper.

The most serious misrepresentation is the depiction of single mothers as losers from this Budget. Rose still retains €1,791 of her single-parent benefit despite being in work… so is The Sunday Times of Malta advocating that single parents retain their entire social benefit on top of their employment income? That would surely be discriminatory against others.

Tapering is meant to aid individuals off benefits, and to help them become more self-reliant. Looking at Rose’s case objectively, she is better off by €2,716.

To be more representative, this newspaper should have presented at least one example of a pensioner household. Let us take the case of George, a pensioner on the maximum pension, and his wife, Rita, who is on a low pension. As a result of the Budget measures, Rita’s pension increases by €416. George’s tax bill falls by €76 as a result of the reductions in tax rates. After years where their income increased just by the COLA award, George and Rita are finally seeing a real rise in their income. Moreover Rita is more protected against income loss in the case of George’s demise.

Whereas prior to the 2016 Budget, Rita would have to depend on a pension of €10,384 when she became a widow, now she will be able to retain George’s entire pension, an added income of €2,077.

John and Amber

Joseph and Maria