When people receive tax refunds, they are receiving what is theirs by right from payments they made to the government. They usually receive a notice about this in their tax statement and move on with their life. The government has taken this a step further through a public relations stunt: Minister for Finance Edward Scicluna held a press conference to announce the delivery of specific cheques, which were sent together with a propagandist letter to thousands of workers.
A few days ago, someone sarcastically told me that the tax money that is being refunded to people have already been paid up by the same people through the higher utility bills courtesy of an illegal billing method. Within the social media others joked that the refund could be used at pharmacists to buy anti-pollution products, and some said that government’s boasting about the refund was an insult to those struggling with rent and loan payments. In a tweet, Times of Malta opinionist André DeBattista referred to this as ‘bread and circus’ politics.
Many others have been saying that the government is somewhat forgetful of the fact that 95,000 pensioners in Malta are finding it increasingly difficult to make ends meet in view of rising costs amid an increasing inflation rate. As things stand, around 22,000 pensions are at risk of poverty: rises in fuel costs, utility bills, food stuffs and many other items are not making things better.
The highest government pension in Malta is around €13,200 and the only consolation to such pensioners is that they are tax exempt. But unlike tax-exempt workers they did not benefit from a government cheque. I invite readers to check out a recent public tweet exchange by Alfred Mangion and the Finance Minister for more information on the matter.
Given that thousands of pensioners are finding it difficult to make ends meet, it is about time that the Minister of Finance introduces substantive measures in the upcoming budget
This takes me to a recommendable read by Carmel Mallia (September 7) regarding pensioners’ budget expectations. Mallia reminds his readers that for the past decade the Alliance of Pensioners Organisations has been addressing the importance of adequate pensions.
It is important to note that a recent report by the European Social Protection Committee and the European Commission confirmed that Malta’s two-thirds government pension was inadequate, something which even I elaborated upon in a recent article in this newspaper.
In this regard, Mallia reports how the relative median income rate for older people (65+) decreased between 2008 and 2016, that women are worse off and that there is age discrimination in various measures introduced in the two-thirds pension, “namely in the capping of the maximum pensionable income, the guaranteed national minimum pension and in the yearly reassessment of pension”.
The report in question shows that one cannot survive on a pension in Malta and affirms that the gender gap among pensioners is one of the highest in the EU. It adds that during the period under review (2008-16), the at-risk-of-poverty or social exclusion rate for older people has increased, especially for those aged 75 and over, even though the relative poverty gap for persons aged 65 or over showed a marked improvement.
The pensions report in question also recommends a proper indexation of pensions to mitigate the erosion of pensioners’ purchasing power. This should include a basket of goods and services needed by older people. The recommended formula is one which reflects 50 per cent wage inflation and 50 per cent retail price inflation.
It also recommends the possibility for persons to create their own pensions schemes instead of the State-run one. To this, I would like to add that the current government has abandoned Malta’s previous efforts to include a second-pillar pension which could help foster responsibility and sustainability.
Given that thousands of pensioners are finding it difficult to make ends meet, it is about time that the Minister of Finance introduces substantive measures in the upcoming budget. Otherwise, they will have to keep making personal sacrifices or depend on other sources of income and assistance, if available, to make ends meet.
Malta requires national consensus on the pensions policy: let us commit ourselves to cross-generational solidarity within a caring society.