Whenever foreign observers such as the European Commission or the International Monetary Fund, make comments about our economy, they always make reference to the size of the public sector deficit. They, then continue by making reference to the welfare bill (in practical terms, this means the cost of health care and the cost of the pensions system), usually claiming that if we, as a country, wish to have sustainable public finances, then we need to reform our health care and our pensions systems with the objective of curtailing costs. What they are really saying is that health care cannot remain free for all and our social benefits system cannot be so generous.

We can argue this point till we all go blue in the face. There will be those who would agree with such a position. Others would claim that we are wasting too much public money on useless things and so the cost savings should come from there and not from the welfare bill. Others still would be in favour of making those with higher incomes pay for health care but would be against any cuts in the social benefits. And there will also be those who would argue that we need to have a welfare system that in itself discourages waste and should not serve as a disincentive to work.

However, I believe that, today, any of these lines of reasoning is flawed. We need to ask ourselves a much more fundamental question. To determine the future of our welfare system, we need to ask ourselves about the values that should underpin such a system.

As a country we are not alone in facing this dilemma. The nature of the economic recession which the world experienced following the crisis in the financial markets, and the eventual actions taken by governments to provide a stimulus to their economies, has thrown public finances in disarray.

In several countries the response to this has been to apply the cuts remedy, and welfare systems in several countries were not spared.

In effect, governments have sought to apply the efficiency paradigm in order to address their public sector deficits. And they have also applied it to their welfare systems.

In Malta, when we speak of curtailing health care costs and social benefits costs, we would also be applying the efficiency paradigm to the issue. This is because very often we look at our welfare system as a compromise of two opposing forces - the forces of liberalism whereby each individual has to look after himself or herself and the forces of socialism whereby the state should seek to provide for each and every one of us from the cradle to the grave.

Thus, the welfare system has become a necessity to achieve social cohesion. The snag is that some of us look at it as a necessary evil (but still a necessity) while others look at it as the necessary bonanza to support one's standard of living.

This has led to the notion of the welfare state and the objective of successive governments has been to extend and strengthen the welfare system at the least possible cost, simply because it was and is still being seen as a necessity.

What we have not recognised along the way is that this has depersonalised the concept of solidarity which should characterise any welfare system.

I pay my taxes which are then used to provide someone else's social benefits and so there is no need for me to devote more of my resources to support those less fortunate than me.

Those that receive social benefits have no relationship with the persons that are providing that money. The end result is abuse of the welfare system, followed by more abuse by those who should be giving rather than taking. It went further as political expediencies have led to the extension of the system with the consequence that today we have a widespread culture where people expect to depend on the state rather than their own means.

The answer that is being given is to put in some rules in order to curtail abuse and hence curtail costs. This is a solution based on the efficiency paradigm and brings me back to my fundamental question - what values should underpin our welfare system? Should we just be happy with a change of rules or should we seek to have a change of culture? We seem to have lost the concept of giving freely.

I strongly believe that we need to rethink the fundamentals of welfare. We need to move away from the notion of making welfare sustainable through efficiency and move more towards a welfare system that is based on human relationships underpinned by the values of solidarity and fraternity.

I believe that only through such a change in thinking can the country afford economically the welfare system in future.