A new class of poverty

Government would do well to remember that it is there to improve the country’s lot... not just its own.

Cartoon by Mikiel Galea
Cartoon by Mikiel Galea

Malta was in many ways impoverished by the loss of anti-poverty campaigner Charles Miceli this week.

Miceli was a tireless campaigner for society’s most vulnerable: namely, the poor. Combining a genuine love for life with a commitment to social conscience, he was a rare combination of humanity and activism. In recent years, he was actively involved with the Anti-Poverty Alliance; and in light of rapidly rising rent prices, that are especially hard-hitting on the poor and underprivileged, Miceli’s activism was of late dedicated to rent reform.

There will be time and place for obituaries and tributes to the late Charles Miceli – already many have expressed their shock and dismay in public – but as he himself would most likely have reminded us, the best way to keep his memory alive would be to focus on the same issues with the same determination.

The rental issue is of particular concern, because it can be seen to be having a serious impact on the overall quality of life of an ever-growing social demographic – which is now no longer only concerned with the materially deprived.  Such is the inflationary pressure on the rental market, that even high-salaried employees are finding it hard to keep up. Alexander Stevendahl, CEO at the online casino Videoslots, told this newspaper that sky-high rent costs were becoming “a big problem” which was not only affecting locals, but also foreigners. One can only imagine, then, the effect on those who earn far less.

It was to mitigate these effects that 17 NGOs got together to make proposals for rent reform. The NGOs have published a document containing proposals modelled on countries which have introduced and enacted strict rental regulation. They insist that the new proposals have nothing to do with the pre-1995 rent legislation that used to be active in the country.

The proposals do not impose any tenant-landlord relationship other than the established rental contract. The main proposals include: 

A tax regime that incentivises long-lets through lower tax-rates for longer leases.

The creation of a state registry of properties on the rental market.

An establishment of a public entity that is responsible for rent regulation.

The registration of properties that are up for rent with the first price set being considered as the ‘initial price’.

The establishment of a Rent Price Index that lists prices in different areas and for classes of property according to size and quality.

The regulation of Agencies and a legal standing to a Tenants’ Union

A tax on empty rentable property

Whether or not these proposals, in themselves, represent the correct approach is a question unto itself: but it is clear that the country needs to start taking the issue more seriously. Apart from the creation of a whole new category of poverty – and the real risk of a housing crisis – there are social considerations that go beyond the plight of tenants alone.

Rental inflation is also causing displacement from their hometowns of residents who cannot afford rent because of the prices commanded by landlords seeking high-earning foreign tenants. This can only result in forced gentrification, the rise of ghettos and slums, and all the associated social discord.

There is too much riding on this issue to be complacent. Government cannot continue ignoring the pains of rising rental prices.

Those pensions again

This is especially true in view of other issues that have recently been prioritised by Parliament. Display insensitivity towards the growing category of working poor in Malta, MPs on both sides of the House this week agreed to guarantee a full two-thirds pension for MPs – as well as non-MP Speakers who served just one term – and also a pro-rata pension for those who served a partial term, or who went on to become an MEP, or for MEPs who resigned their seats to become MPs.

This bipartisan deal has caused consternation on the ground in a country where second-pillar pensions are absent, and where common citizens get a capped pension that is not linked to future salary increases (as in the case of MPs). 

The long-term sustainability of the pension system may have improved and in 2016, substantial tax exemptions on pensions left more money in pensioners’ pockets, but that same year the risk of poverty and social exclusion increased to 26.1% for the elderly. On the ground, people think the MPs’ lot is about to improve drastically while pension reform in Malta still has a long way to go.

Prime Minister Joseph Muscat attempted to justify the decision by describing the previous situation as an ‘injustice’ towards MPs. It was an unfortunate choice of words, for many people were reminded of another injustice that government and Opposition seem hell-bent on ignoring: the injustice of capped pensions for the rest of the country, at a time when Malta is economically booming.

As always the question is, why would MPs deserve an uncapped pension on what is after all a part-time occupation? And above all, why do politicians only rectify ‘injustices’ when these affect their own pockets?

Government would do well to remember that it is there to improve the country’s lot... not just its own.