The Malta Independent 22 November 2019, Friday

TMID Editorial: Economy doubles but we have more poor and marginalised than ever

Saturday, 19 October 2019, 09:20 Last update: about 2 months ago

While the Prime Minister brags about a virtual doubling of the Maltese economy since he took office back in 2013, it is quite clear that not everyone is enjoying the spoils.

In fact, a good 8,000 people have been suffering the adverse effects of Malta’s storied economic boom. That is the number of people who have slipped into the risk of poverty and social exclusion since 2008.

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That number now stands at over 89,000 people in Malta, around 20 per cent of the population.

The fact that the number of people at such risk has grown by nearly 10 per cent over the last 10 years is a great cause for concern for the people who are not rolling in the economic boom that the government likes to talk about so glowingly.

While the narrative is that the economy is doing superbly well, poverty is nevertheless on the increase, as statistics released by the European Union earlier this week quite clearly show.

The figures show that 8,000 more people stood at risk of poverty and social exclusion in Malta in 2018 than in 2008. In 2008 the number of people at risk of poverty and social exclusion in Malta had stood at 81,000, a figure that had shot up to 89,000 by the end of 2018.

This represents a concerning increase of close to 10 per cent for this increasingly marginalised section of society. One of Budget 2020’s tag lines was that there were no new taxes or tax hikes this year, but perhaps there ought to have been considering the number of people who are somehow falling through the social safety net.

In the meantime, the Central Bank reported yesterday that Maltese residents’ deposits have grown at a slower annual pace of 4.6% this year, but, on the other hand, Maltese are also taking out more credit, which has risen, conversely, by 5.8%. Then we have the President of the Malta Food Bank Foundation warning us that the problem of food poverty in Malta is bigger than anyone can tell.

The gap between rich and poor clearly is widening by the day and while the government may attempt to sweeten the pill with grants, benefits and tax rebates, the economic model currently being employed is not quite cutting it for all sections of society.

Instead, we have platitudes being dispensed by the Prime Minister and the finance minister about how great the men and women in the street are doing as a nation, but at the same time it is no big secret that the Average Joe is feeling a real pinch.

Somehow, the government’s take on the public’s prosperity does not seem to tally with reality. The reality of the situation is reflected by recent Eurostat figures which show that the Actual Individual Consumption (AIC) of Maltese households, a measure of material welfare of households, was 20% less than the EU average. On the other hand, GDP stood at 98% of the EU average. This seems to indicate that, while GDP is almost in line with the European average, this growth is not necessarily trickling down to the average household, whose AIC is only 80% of the EU average.

Other recent figures show, conversely, that Maltese consumers are paying on average of 12% more than their EU peers for staple food products. Indeed, the Maltese are being treated to the ninth-highest prices for food and nonalcoholic beverages in the EU.

The data showed, for example, how the Maltese are paying 11% more than the European average for staples such as bread and cereals, and 17% more on items such as milk, cheese and eggs.

It is not as though the government is unaware of these developments. In fact, Budget 2020 dispensed with an additional bonus of €15 for single people, €35 for families to cover increase in the costs of milk and bread.

The Prime Minister likes to speak of trickledown economics.

There is definitely a trickle, of that there is no argument, but it is doubtful whether it is trickling down to everyone.

 

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