For more than three decades, social protection in the majority of developed countries has been a key policy tool in improving human capital and addressing poverty.  In Malta, the social welfare net has been catching up with that of the best in Europe as the economy has grown and generated the financial wherewithal to support an expansion in the range and magnitude of benefits.

Substantial evidence is available on the positive impact of social protection in reducing poverty and improving education and health outcomes.  Various studies also suggest that social protection has a positive effect on social cohesion. Yet, it is disturbing that in the last few years, the emergence of a strong politically- conservative movement and the growing winds of war have coagulated around a call for "re-dimensioning" - in reality a cut-back - in the welfare net. 

After the 2008-2012 financial crises, most governments in Europe   ̶   but not Malta's   ̶   responded with austerity programmes.  Both the working and middle classes were squeezed and their income reduced by an ill-thought-out response, which generated a backlash.  It seemed, for a while, that governments had learned the lesson, but now we are again facing a call for what one might call 'Austerity in everything but name.'

Thank God that in Malta, the Government has ruled out joining the chorus.  The Minister of Finance Clyde Caruana told the media that, while geopolitical tensions mean that increasing Europe's defence spending is necessary, "this should not come at the cost of dismantling our social safety net."  Were this to happen, he added, "we may find that we have won battles abroad only to lose the peace at home."

Social protection broadly includes social insurance (such as pensions to which individuals and employers may also contribute) and non-contributory social assistance (children's allowances, disability grants, unemployment benefits). It also includes assistance in the form of cash transfers (the Cost-of-Living Allowance and Additional Allowance on which the government will have spent almost €50m this year alone), as it is funded from government revenue.

Many people, including supposedly informed commentators, mingle social benefits with social assistance.  Of course, they are not the same.  The former benefits are paid out of contributions (for example, National Insurance)   ̶   often paid by the beneficiaries themselves during their working lives   ̶   and are universal; the latter are given by the state to vulnerable people (widows or the physically disabled) even though the beneficiaries haven't directly paid for them.

Social protection programmes represent a direct link between people and governments.  Mind you, this is a double-edged sword; positive citizen experiences of social protection may increase their satisfaction and trust in state institutions, but negative experiences can undermine trust.

Social protection programmes are most frequently designed to alleviate poverty, and as such can help to address economic factors that may contribute to social unrest, inequality, and exclusion. Alleviating economic pressure and helping households to manage shocks can have a range of flow-on effects, from increasing family investment in health and education to reducing intimate partner violence.

Social protection can also enhance individuals' ability to share their income and bind together individuals in a society.  A testament to this is the large amount of money that the Maltese give to various charities. A 2016 study published by the Charities Aid Foundation (CAF) ranked Malta in 4th place world-wide for donating money. 

There is a strong relationship between social exclusion, social cohesion, and insecurity.  Social protection can contribute to reducing social exclusion by reducing vulnerability, helping overcome structural disadvantage   ̶   such as by providing free public transport   ̶   as well as compensating for limitations in capability by improving access to education (stipends, student grants, etc).

All this may be fine, but how do the beneficiaries of the welfare net look at it?  For probably the first time, we now have an idea of the views of the Maltese from a scientific survey of 600 individuals conducted by Prof Vincent Marmara.  The sample included 52% of individuals who have received social benefits and 48% who didn't, so it is quite a fair representation of the population.

As can be expected, the benefit received by most people (44%) was the children's allowance, followed by the old-age pension (36%), the Additional COLA (25%).  This confirms the universality of the welfare net in Malta. The percentages for people who receive some other kind of benefit range between 1.2% (unemployment) and 7.0% (contributory pension).  Of course, some beneficiaries receive more than one benefit.

It seems that, out of a scale of 1-5, the majority of the population (55.6%} is satisfied or very satisfied with the benefits received, 29% are neutral, and only 15% are not satisfied.  Almost 61% of the individuals concerned stated that their quality of life had been improved by the benefits, but 39% did not agree. The unemployed, pensioners, and students were the most likely to state that their quality of life had been improved, thus confirming that social benefits were making a difference in the lives of people with no or relatively low income.

Surprisingly, 73% of the respondents stated that there are no additional benefits they would be interested in receiving.  One reason for this could be that some 47% stated that they are satisfied or very satisfied with the social security system, a high percentage of 41% were neutral, but only 12% were somewhat or totally unsatisfied. 

Confidence in the current social services system could be better. The survey revealed that a relative minority of 48% were satisfied or very satisfied, 36% were neutral, and 15% weren't satisfied.  This could be result of sensitivity to negative views regarding the implementation of certain services.  The high 'neutral' percentage indicates that better implementation and governance are important to increase the percentage of people who would be satisfied.  In fact, 50% said that there is a need to ensure better application of social services.  

The survey revealed that almost 28% of those interviewed were not satisfied with the information they have on the benefits available.  This could well be because 60% of them had never visited a Social Services office or that of its entities.  This clearly shows that the Government needs to do more to inform potential beneficiaries, especially since, once they approach the Social Services system, 61% find they are satisfied or very satisfied with the response they get. Having said that, 54% would still like to get clearer information about benefits.

The Social Ministry already has a range of tools which it uses to reach potential beneficiaries, but the survey will help it hone its messaging.  In spite of modern means of communication, 63% said they still prefer to use the telephone, and 51% face-to-face communication.  Only 25% said they prefer on-line tools.  I realise that the Government favours the use of technology, but ways need to be found to satisfy clients who prefer not to talk to bots.

One very interesting finding was that over 68% of respondents think the country should have private pension schemes while only 12% think not (19% are neutral).  Rather at odds with this finding is that 51% said they would not be interested in joining such a scheme, though this could be because they either are well-off enough not to need one or already participate.

The survey confirms that the current culture is still oriented towards the traditional preference for working only till 61   ̶   44% do so.  However, a good percentage (over 39%) state that they would prefer to continue working beyond 61 and get an augmented pension after reaching 65 years.  Policymakers will have to work hard to persuade the former group that living just on the pension does not guarantee a high enough quality of life.

Prof Marmara also delved into the question of family planning.  Decisions on forming a family and having children are nowadays influenced mainly by financial issues (88%), career (87%), and housing (74%).  At some distance, but not that far off, is the lack of sufficient parental leave or an adequate work/family balance (66%), followed by lack of family support (45%).  Just over 55% also indicated health issues; it would have been interesting to find out what sort of issues are relevant (infertility, hormonal imbalances, etc), while I do not exclude that this category also included lifestyle factors (obesity, environmental factors, sexually transmitted diseases), all of which are either very prevalent or increasing in occurrence.       

Naturally enough, given these results, over 66% of respondents said they would like to see incentives or support to couples wanting more children.  The measures they would like to have mirror very closely the issues mentioned as impeding family formation.

This important survey evidences a recognition by the Social Services Ministry that social cohesion   ̶   relations and solidarity among citizens, and relations between citizens and the state - are key to the 'social contract'.  It also helps the Ministry and other policy-makers design systems that promote the well-being of all members of society, strengthen trust, and create a sense of belonging to the state. 

Frans Camilleri is an economist. He studied at Oxford and University of East Anglia, is a former corporate head at Air Malta, and has served on various public and private boards.