The Malta Independent 12 May 2021, Wednesday

The rich getting richer, and the poorer?

Noel Grima Sunday, 18 April 2021, 07:59 Last update: about 24 days ago

There is now incontrovertible proof that the years the Labour Party has been in office did not really benefit the social class a socialist government should be defending and promoting – the poor.

The European Foundation for the Improvement of Living and Working Conditions, known as Eurofound, found that the bottom half of Maltese society, which in 2010 owned 14% of total national wealth, by 2017 found it was owning just 10%.

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And the richest 5% of the Maltese population, which under the ‘capitalist’ PN administration owned one third of the national wealth, by 2017 was owning 40%.

This study was carried out all over Europe. The results for Malta are mostly rather negative. Malta, the report says, is one of just five countries with “a clear trend of increasing wealth inequality”.

The five countries are Cyprus, Greece, the Netherlands and Slovakia, apart from Malta. Estonia, Finland, Hungary, Portugal and Spain registered a smaller increase. On the contrary, Austria, Germany, Poland, Latvia and Ireland saw inequality decreasing. We should have been among this group if only we had a government which aimed at decreasing inequality.

The average net wealth in Malta is estimated at €158,468, less than Luxembourg (€375,288), Cyprus (€182,741), and Belgium (€164,573) and more than Ireland (€137,553), Lithuania (€40,847), Croatia (€38,195), Greece (€37,388), Slovakia (€36,593), Poland (€33,933) and Hungary (€30,227).

 The countries that are not mentioned fall between Ireland and Lithuania.

The proportion of people under Malta’s average net wealth has worryingly increased from 72% in 2014, Labour’s first year in office to nearly 77% in 2017.

And yet the people voted overwhelmingly to continue along this path in 2017, choosing continuity over an Opposition banging on about corruption.

People must have gambled that the sense of well-being brought about by an accelerated economic growth and a property boom fostered by the Muscat administration would have percolated down to them.  The fact that the bottom half of the population ended this decade poorer than it had begun it does not seem to have influenced the electorate.

More influential, at least in my opinion, was the widening of jobs with the government spread around by the Muscat government, regardless the past political affiliation of the recipients.

My comments here must not be understood as criticizing the stand against corruption taken by Simon Busuttil prior to the 2017 election but points out that there was no equal focus on the poverty situation in the country and on the decreasing wealth of large swathes of the middle class. Instead, the lie that the middle class had been enlarged was allowed to stand and was not challenged by an Opposition weak on numbers.

There were, from time to time, indications things were not going well – the number of people under the poverty line was one such indicator – but many commentators preferred to judge the well-being of the country by focusing on the number of unemployed. We know now this number could be manipulated by a variety of means, such as removing people from the list in exchange of a wage with pretty much nothing to do.

And as the number of people depending on government hand-outs increased, the pressure on the government coffers increased. But then Covid-19 happened and all countries, influenced by the ECB and other worthies, opened up their purse strings.

Now that a relaxation of the Covid pandemic is on the cards, we must try and find ways how to kick-start an economy on the ropes. There is, in my opinion, one and only one way of doing this and this is surely not by aiding and abetting the top levels of society to continue and even increase the mad rush that has left the others behind and even poorer as a result.

A government with the good of the country really at heart must begin from the bottom half. This is what Dom Mintoff did in his first term from 1972 to 1976 when the minimum wage was pushed up time and again and when a whole raft of social measures were introduced.

That was a really socialist government. The results followed.

 

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