New social measures should be ‘just the start’ – Caritas director

Disappointment at government’s failure to raise minimum wage

Caritas Malta director Leonid McKay
Caritas Malta director Leonid McKay

The voice of the weakest of society is finally being heard but the social measures announced in Budget 2017 cannot be considered as the be all and end all of the social budget, Caritas director Leonid McKay has told MaltaToday.

“It’s a budget that has addressed families with low-income and which recognises that there are families who are struggling and cannot get out of the poverty trap on their own,” McKay said.

A study conducted by Caritas has provided policymakers with a snapshot of the social situation in Malta: the study found that a couple with two children requires a minimum of €11,466 a year to live a decent life, while a single parent with two children requires €9,197 and an elderly couple on a pension requires €6,527. 

Food was the most significant cost – accounting for €6,211 out of the first family’s budget, €4,604 out of the second family’s budget, and €2,945 out of that of the retired couple.

Despite calls by Caritas, Alternattiva Demokratika and the Alliance Against Poverty among others, the government has not increased the minimum wage, with the Prime Minister urging social partners to engage in a discussion. 

Along with a number of social measures mainly targeting those at the lowest strata of society, the government intervened to increase the cost of living adjustment – calculated at €1.16 but which the government raised to €1.75. 

“The government’s intervention was most welcome: whilst the economy is growing, growth is not reaching every one and it is not trickling down to the lowest bands,” McKay said.

Prompted by MaltaToday, McKay said that, likewise, the government must intervene to raise the minimum wage. 

“The government has tried to increase the disposable income without ‘burdening’ the employer. But, given that the economy is doing so well, I ask: if we don’t increase the minimum wage today, when will it ever increase?”

McKay also warned that not increasing the minimum wage would affect an individual’s future pension as the benefits cannot be reflected in pensions.

“We are disappointed especially since the Caritas study, which was given so much attention, made a strong case in favour of a rise in the minimum wage.”

The Caritas director also said that the budget should have addressed the rising prices of healthy food, identified by the study as a family’s most significant cost. 

On the other hand, Caritas welcomed other increases to social benefits and anomalies that have been addressed – such as that the allowance for people who take care of an elderly relative has now been extended to married persons as well.

McKay pointed out that the government should also have placed people suffering from illnesses such as Parkinson’s, Alzheimer’s and Aids, on the agenda. 

Questioned about rent regulation, McKay admitted that this would remain the biggest problem. Subsidies announced by the government – doubling the subsidies – was welcomed as positive by McKay but doubts were raised on its efficacy.

He welcomed the pilot project for private landlords who enter into a 7-year rent contracts with 100 low-income families. At “socially just” rents, landlords will be taxed at 5% as opposed to 15%.

Asked whether the government should intervene in the rent market, McKay said studies were required to find the best measure. 

“We believe that the state should intervene where the market fails… and the market is not sacred.”

Reiterating that the measures announced were just the first step in giving the most vulnerable a stronger voice, McKay said the success of the budget can only be calculated once the market adjusts to the measures: “A further increase in food prices and rents will render those measures irrelevant.”