Budgeting with a social conscience

Although Malta was not hit as drastically as some other European countries by the economic crisis, thousands of people are still finding it hard to cope with their small income and big expenses. In the run-up to the 2012 Budget, Alternattiva Demokratika – the Green party would like to see more realistic investment programmes in social projects that would improve the quality of life of those who are constrained to live below their expectations. Further investment is also needed to strengthen support structures for vulnerable groups with acute social problems such as neglected and abused children, victims of domestic violence and former convicts.
Amid the torrent of words and numbers in the Budget document we would like to see more measures to attract more workers to the labour market. Although the government has already offered a number of incentives in this regard, Malta still has a high inactivity rate, especially among women, persons with disability and single parents. In Malta, inactivity is much more serious than unemployment.

We need more concrete measures to enable the parents of young children to find a healthy work-life balance. Individuals should have the opportunity to choose whether they want to work and whether they want to do this on a full-time or part-time basis. They should not be pushed into making undesired choices due to the lack of support structures. AD has been calling for extended maternity leave and for paid paternal leave as one positive measure in this direction but its calls have been ignored by a government that is more concerned with securing the profits of industry than with the needs of young families.

The inactivity rate among persons with disability has become a recurring pattern as many are obliged to live on the meagre disability pension at 55 per cent of the minimum wage. Affirmative action as stipulated by law should be enforced more effectively. Employers should be offered incentives to make the necessary adjustments to be able to offer people with a disability the opportunity to realise their potential. As it is, we are wasting the talent of many individuals whose impairment is being turned into disability by a society that is not sensitive enough to their needs. Admittedly, there are different forms of disability and, for some, paid work is impossible. That is why we consider a revision of the disability pension as crucial if we want to discontinue subjecting these people to a life of dependency and poverty.

Perhaps one of the obstacles discouraging vulnerable groups from taking on paid employment is the fact that, should they earn more than a stipulated amount (which is not much), their social benefits would be deducted accordingly. Considering the rates of dependency that characterise groups such as single parents and persons with disability, the maximum capping beyond which they would lose benefits should be increased to reflect today’s economic and social realities.
While those living on social benefits are inevitably more likely to experience poverty and social exclusion, it does not mean the government can put its mind at rest when it comes to the employed. We would like to see genuine efforts at curbing all forms of discrimination in all social spheres.

Although our unemployment figures are not so dismal, the picture is not as bright as the government would like us to believe. Apart from the high inactivity rates, thousands of families whose livelihood depends on the minimum wage are at risk of poverty. The concept of a minimum wage is to protect workers from exploitation and not to enable employers to pay workers the least possible amount for a hard day’s work. AD has been calling for an increase in the minimum wage for years.

It is acknowledged that a higher minimum wage may put a strain on employers, especially on small businesses. However, it will also put more spending money in the pockets of low-income earners and encourage more people to find employment rather than live off state benefits. Part-time and contractual workers as well as those who are forced to register as self-employed should also be protected by the minimum wage.

An interrupted working trajectory contributes to a low income in old age. Some are inevitably hit worse than others. AD would like to see a pension reform that combines fiscal sustainability with social justice while introducing a second pillar.

The 40-year mandatory working period for eligibility to a full pension is unjust, particularly for those who interrupt or limit their participation in the labour market against their will due to caring responsibilities, illness, insecure or part-time employment or unemployment.

AD would also like to see a reform in social housing and more steps against the encouragement of further speculation considering the amount of empty dwellings and the perpetual construction sites. One way of doing this is to tax from the third property onwards all houses left vacant. The state should own a number of vacant properties that could be used in cases of social problems such as homelessness. The government should invest further in subsidised low-rent accommodation to vulnerable groups.

Ultimately, AD believes that economic development should not be isolated from social policies that aim for inclusion, sustainability and equality.

The Times of Malta
Friday, October 14, 2011 , by Angele Deguara

The author, a sociologist, is spokesman for social policy of Alternattiva Demokratika – the Green party