Nanna Ouch!

I do not know which is the more shocking - that Finance Minister John Dalli decided to exact around Lm1.3 million from the mostly withered pockets of senior citizens seeing out their end-phase in state and PPS retirement homes, or the failure of Opposition Leader Alfred Sant to mention the figure of that sad, unjust measure in his immediate-post-budget-speech encounter with the media journalists and their revealing cameras.

Minister Dalli kept his speech short, very. He followed the old trick of putting away elaborations in a supplement to the speech, taking it as read-later. He did, however, allocate a whole page of his speech - 2.2 per cent of the total, no less - to the levy on retirees, introducing it with the insensitive statement that "even in this area" private public partnership had a role to play. How? By building suitable homes for senior citizens who otherwise would not have the means to benefit from this service privately.

In a classical social non sequitur, he then proceeded to state, bluntly and frankly, the following: "...as from next year, senior citizens accommodated in state institutions or in homes managed under the PPS would start (sic - should read must) contributing (sic again - should read forfeit) 80 per cent - instead of 60 per cent as at present - of their (state) pensions". The minister premised this, not quite completely correctly, as follows: "...the service such senior citizens receive is a total service which takes care of all their accommodation needs, food and medicine".

Mr Dalli detailed a parallel measure, intended to mitigate the one-third hike in the part that such senior citizens will be forfeiting in favour of the government for aiding them - quite generously, let it be clear - to reside in specified retirement homes. He said that the minimum part of one's pension that would remain in the hands of such retirees will be raised from Lm550 to Lm600. Elsewhere he also detailed that the state income of pensioners would go up by Lm52 annually (through the cost of living increases).

What the minister did not articulate, and neither include in the appendix to it, was an estimate of the net cost to such retirees of the hike in pension retention. That - as someone experienced in rifling through the Estimates supplied to MPs and the media by the minister could have found out within seconds, as I did - is forecast to reach Lm1.3 million in 2004. The impact on each affected retirees will recur annually until they move on to the realm of the God of Love.

The Opposition Leader either did not rifle that minutely or he bypassed the point in his umbrella warning via the budget-night media that more detailed criticism would be made in due course. No doubt it will, yet such a salient hurtful point, one feels, should have been prioritised when sprinkling as tight a fistful of salt on the wounds opened by the measures.

Of these, the increase on existing VAT rates by a fifth (from 15 to 18 per cent) will create most furore, though the minister promised to cushion the estimated 1.9 per cent impact on the retail price index with a government payout to all employees come the truer spring of 2004.

On the sensitivity scale, I still rank the raid on old retirees' pockets as the most significant. Relating the estimated Lm1.3 million new bite from retained pensions to the few hundred person living in eligible retirement homes that might work out, on a per capita basis, at a lot more than the increase in VAT rates on consumers.

No doubt, opposition speakers will make up for the MLP leader's omission and also remind the government benches how much they or predecessors used to fulminate against such retention when they were themselves in opposition.

On his part, the finance minister, I would say, should have found Lm1.3 million from other sources, such as official travel and entertainment, and opening of unnecessary Euro-embassies. Or, what the Hades, from a further extra cent on smoking, whose increase thereon he manfully did not try to mask with references to discouraging tobacco inhaling to protect health, and such old fluff.

The minister will not be popular for his measures - thoroughly justified - targeting property transactions, including a withholding tax on preliminary agreements, which should not only help the government cash flow slightly but also discourage somewhat the ingrained practice of under-declaring property values. That took courage. Targeting weak retirees was something he could and should have avoided.