Booming economy and inequality

Local economists, particularly the politically partisan ones, continue to exalt the statistics supporting our booming economy, while ignoring the Eurostat and local Caritas figures indicative of increasing inequality and the risk of poverty.

A booming economy for those stuck on low wages or pensions only means increasing the risk of poverty and inequality. Is it true that some garages are being slightly modified to be made habitable for renting to people who cannot afford a better living space?

A senior Mater Dei Hospital doctor told me that the list of cancer drugs available free on our health service (NHS) reads like that of a poor, developing country. Apparently, patients who are recommended expensive drugs not available on the NHS are referred to the President’s Office to ask for financial help from the Community Chest Fund (CCF).

Patients anxious about their possibly serious disease have to suffer the added anxiety of not being able to afford the medicine recommended by their medical team. One presumes that the recommended medicine, not available free on the NHS, would be expected to be effective, otherwise consultant doctors wouldn’t be so stupid as to recommend it.

Furthermore, it would be perfectly reasonable to ask whether the Office of the President has become part of the NHS, with these referrals of patients for help to acquire medicines recommended by NHS doctors. Much noise is made of the annual Strina money collection for the CCF.  Why has this charity not only become necessary but grown?

Is it because the welfare state is inadequate and represents another aspect of the increasing poverty risk and consequences of inequality? How consonant is all this with a booming economy?

Not only is the booming economy not trickling down to the people at, or not far from, the bottom of the pile, it is actually kicking them in the teeth

Unfortunately, it might be booming for some and detrimental to others.

Another problem with the CCF trying to partly replace the welfare state is that financial help from the CCF is means-tested.

So free tertiary education plus stipends is not means-tested, while some financial help, for serious matters, from the CCF, is means-tested. Just another factor breeding inequality.

One needs to recognise that new, expensive medicines are a problem for welfare states around the world, but one also needs to examine how our booming economy is dealing with this problem.

Another headache for our welfare state is a growing ageing sector of the population, the bulk of which cannot afford private retirement homes and need to sign up for government ones. What is the current waiting list at St Vincent de Paul? Is it closer to a thousand or even higher? The St Vincent de Paul site seems to have ample room for enlargement, so why not go ahead with building some more accommodation blocks? Is a lack of funds holding things up? Did you say the economy is booming? And where exactly?

Joseph Grech’s Talking Point (January 6) reminds us, among other important points he made, that in spite of a booming economy, Malta continues to rob many of its pensioners. Mr Grech, a former teacher, has the social security pension he contributed to reduced by €7,000 annually because of his civil service workplace pension.

Malta maintains a social security law permitting state fraud of some pensioners’ entitlement income, another example of state-sponsored discriminatory inequality. Is this what a booming economy ought to continue doing?

Both major political parties are in favour of lowering income tax, and that’s good for economic activity. The Nationalist Party is even suggesting lowering income tax for the self-employed even further.

This might be a good economic concept, but would it lower or increase the risk of poverty and inequality? Apart from discussing the minimum wage, both parties have not really put forward credible plans for tackling increasing inequality.

The welfare state needs to manage an increasing risk of poverty and inequality. We need to learn from both parties how the fiscal system needs tweaking to strengthen the welfare state. Reducing income tax, although welcome, will not, on its own, improve welfare and reduce inequality. Not only is the booming economy not trickling down to the people at, or not far from, the bottom of the pile, it is actually kicking them in the teeth. If you don’t believe that, listen to some of the phone-ins on local radio stations, even the non-partisan ones.

Albert Cilia-Vincenti is a formerUK and Malta public servant.


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