Pennies from heaven

Wages are set to rise by €12.81 a week in January 2024, despite persistently higher inflation, and 95,000 families will benefit from an additional COLA payment, which is very laudable and could cause a trickle-up effect because people on the breadline, unlike the wealthy who send their money offshore, tend to spend their money to make ends meet.

What baffles me is that,  given that the population of Malta, excluding non-Maltese citizens, is around 405,000 and families, excluding children, consist of two persons and more, we’re talking of around 205,000 people – over 50 per cent of the population who are on the poverty line and eligible for this additional COLA payment.

Malta outperforms the European Union in terms of real GDP growth. Unemployment currently stands at 2.5 per cent of the working population. So how come 95,000 families are on the poverty line?

Getting back to the rise in weekly rise in wages. This reflects the rise in the cost of living in 2023 over 2022, so this increase is actually a refund of money already spent.

Finance Minister Clyde Caruana presenting the budget. Photo: Chris Sant Fournier

There will be further increases in the cost of living during 2024 that will wipe out the increase in wages.

The increase in wages and 50 per cent of the increase in national insurance contributions is borne by the employer, not the government. Employers will need to raise their prices or risk heavy losses. These increases will be borne by the man in the street whose disposable income will shrink accordingly. The government, on the other hand, will take in more money from VAT on the product or service – a win-win situation for the government.

National insurance contributions and tax bands have not been changed to cater for the increase in wages and benefits, so government coffers will profit and take a sizeable chunk of the cost-of-living adjustment – another win-win situation for the government.

As I see it, and I am no economist, the wealth gap has grown wider than ever. The wealthy, unaffected by the economic downturns that devastate the rest of us, have continued to amass fortunes beyond our wildest dreams. Meanwhile, the middle class, who have been totally forgotten in this budget, pensioners and the rest of us rack our brains and wonder how we’re going to pay our bills and stretch our money to the end of the month.

The trickling down of prosperity seems to have been lost in translation somewhere because, despite all the promises, we are left waiting for the few crumbs to fall into the mouths of the poor and the disadvantaged and some, while pondering the unfairness of it all, wonder if that was better than no crumbs at all.

The wizard of Oz promised that, one day, pennies from heaven would shower upon us and we would live happily ever after. So, if one believes in fairy tales, there’s hope after all.

JOHN O’DEA – Naxxar