Malta’s Government is adopting an evidence-based approach to the health aspect of the COVID-19 situation, and as things stand, the strategy is working. Using the same logic, it is important that government bases its economic and social policies on social-scientific evidence and recommendations. This should include broad dialogue with the opposition party, social partners, civil society and experts, hopefully reaching national consensus on the most salient matters.
Evidence and official statements being published in various media should be ringing enough alarm bells for government to adopt this approach.
For example, a survey by Malta Today which was conducted in early April found that within the COVID-19 context, 25.3% of people were working from home, 26.3% continued working at their usual workplace and 10.2% lost their job. A Times of Malta survey published on 19 April found that 33% of those working in the private sector are fearing for their jobs because of the fallout of COVID-19, with the percentage increasing to 41% if the Coronavirus outbreak had to last six months. On the other hand, 12% of those working in the public sector fear losing their job within the next three months, increasing to 15% if the outbreak had to last six months.
Different workers are being impacted differently by the current crisis. To mention a few, there are differences between teachers who can work from home and waiters who cannot; between unionised and non-unionised workers; and between the 63,000 workers covered by the government’s monthly wage supplements and the 110,000 who are not.
It is imperative to analyse how many of the latter are being impacted negatively by the current situation. For example, the Malta Maritime Forum said that 11,500 workers are risking unemployment, with local companies losing between 40% and 100% of their business in the past months.
It is also important to verify claims such as those by UHM – Voice of the Workers’ Chief Executive Josef Vella, who stated in an interview in Illum newspaper that some workers within the €800 scheme are being forced to renounce leave while also renouncing the optional €400 topup. The situation becomes more precarious when such workers have children at home.
Various other civil society organisations are speaking up about rising examples of poverty. For example, the Malta Trust Foundation received nearly 2,000 requests for food in just three weeks, from people in desperate situations. Similarly, Caritas launched an initiative to deliver 200 meals a day in the beginning of April, but this number has now gone to up to 500. According to the Church organisation, such persons include individuals who already had a low-income before the COVID-19 outbreak; elderly people who experience loneliness; parents with children with severe disabilities who cannot use respite services; homeless persons; foreign workers who do not benefit from welfare schemes; persons who cannot afford rent due to reduced income; mental health sufferers; persons with drug problems who cannot attend rehabilitation; and children and parents who suffer domestic abuse.
The Jesuit Refugee Service has highlighted the plea of forced migrants who are losing their jobs due to the pandemic and who are excluded from mainstream welfare. Such persons include asylum seekers, victims of trafficking, and those under temporary humanitarian protection. There were 3,600 asylum seekers in Malta as at the end of 2019, and they are entitled to a maximum of €130 per month. Beneficiaries of subsidiary protection are entitled to financial assistance of around €300 a month. According to Times of Malta, to date, the Jesuit Refugee Service has received 52 requests for food assistance, nine requests for assistance with finding accommodation and 25 requests for support with rent payments.
The Anti-Poverty Forum - a network of 13 NGOs - confirmed precariousness among various social groups, adding that the spike in price of essential items such as food stuffs has made matters worse. The Forum stated that emergency shelters are now full, and some homeless people are relying on the charity of property owners. It also referred to the difference in pensions received by category A and category B pensioners. The Forum’s policy proposals include the highly commendable suggestion for the setting up of a national institute to monitor poverty and give appropriate recommendations to the governments of the day.
The self-employed and SMEs are also experiencing difficulties. A survey commissioned by the Chamber of SMEs found that 18% of respective businesses are expected to resort to worker redundancy by the end of April, 32% planned to carry on as is until the end of the month, 29% will remain closed or plan to close temporarily, and 2% of respondents would be declaring bankruptcy. Besides, 5% of respondents believed that their business could only last another two weeks, 17% for another month, 30% for up to two months, 29% up to three months and 19% over three months. Mental health issues also featured in the survey, and most businesses also stated that they are not able to top up workers’ salaries with the €400 top-up over and above the subsidy given by Government.
The Malta Federation of Professional Associations also surveyed its members. 65% of respondents were healthcare professionals, 56% were women, almost 50% were employees, 18% employed full time with part-time private practice, and almost 34% selfemployed. More than half were aged under 40 and a third had children younger than 15 years of age. Stress featured prominently in the survey, and one third of such persons reported working longer hours. The survey found that among the self-employed, 97% were affected negatively financially by COVID-19, with 70% of those reporting a loss of more than 50% of normal income; 63% stating that none of the government packages applied to them; 26% did not know; and only 12% stating that they were entitled to such assistance.
Another survey was carried out by Gozo tourism operators, with 84% predicting a bleak future for tourism in the island. 48% said that their business could keep up for 3 months, 33% for up to six months, and 20% for nine months.
In the meantime, the European Commission approved the €215 million Malta wage supplement scheme to support the companies within it, for a maximum duration of 12 months. In addition to this scheme and other initiatives, the government also announced the introduction of benefits such as a subsidy of up to 2.5% of interest for the first two years on business loans affected by COVID-19, and up to 80% of rents for workers who lost their jobs or who are on unpaid leave, self-employed persons whose income has dropped drastically, and victims of domestic violence.
The latest NSO unemployment register figures declare an increase of 466 people from February to March, or 28% over the previous month and 20 % over the corresponding month last year. At the same time, Labour’s newspaper Kullħadd is stating that separate measures by the Economy Ministry and the Family Ministry are supporting 88,000 jobs. According to the Family Ministry, 7,215 persons have applied for benefits, around 80% of whom are parents who are staying at home to take care of their children; 800 are unemployed workers; and others including persons with disability.
The statements, surveys and figures above lead to certain questions which require evidence-based analyses. If Malta has around 40,000 self-employed persons, what about the 28,000 who are not being covered by Government assistance? If around 63,000 workers are eligible for the monthly €800 wage subsidy or part of it, what about the other 110,000?
Will the government consider proposals made by the opposition, social partners, and others - such as an extension of the €800 wage supplement to all companies whose cashflow was reduced by over 50%, and for a revision of utility bills? Should there be a rethink on Enemed’s hedging agreement for the purchase of energy, particularly when the country seems to be paying a costly price for this?
While it is understandable that hefty government expenditure to stimulate the economy today will have to be paid up for in the future, it is also worthy of note that policy decisions and non-decisions can have intended and unintended impacts. Malta cannot afford to have so many persons experiencing economic hardship amid uncertainty. A national social pact is calling. What better time than workers’ day to get the ball rolling?