Just a week after nearly 93,000 families received close to €15 million through the revised additional mechanism against inflation, yet more money has been channeled to boost people’s purchasing power. This time round, families will be receiving over €19 million, which means a boost of about €34 million in household disposable income in just a week. To have the same boost in consumption power, we would have needed an increase of 1,700 full-time jobs at the average wage.
Across Europe, the talk is of austerity, with EU trade unions protesting against €45 billion in spending cuts that the European Commission wants to see in at least 13 Member States. In neighbouring Italy alone, the recommended cuts amount to nearly €10 billion, or the equivalent of half of our Malta’s GDP. In France, Government will be pushed to cut €13 billion.
Protection for Maltese families
Malta remains an oasis surrounded by the sandstorm of the politics of austerity that is sweeping across Europe. Its economy is going from strength to strength on the back of a progressive policy of social investment. With the Government acting as a shield against external shocks, Maltese and Gozitan families can continue with their daily lives and not have to face the difficult choices faced by so many millions of families in Europe.
More than 41,000 families with some 62,000 children are currently receiving the payment for the first three months of children’s allowance due next year. This payment will amount to €14.3 million, a sum much more substantial than last year’s because the latest Budget announced the largest increase in children’s allowance ever granted. Every child will be granted an additional €250 per year. This implies that the payment for the first three months of the year is about €4 million higher than the previous year, an increase of over 25%. By contrast, in the aftermath of the 2009 recession, spending on children’s allowance was cut by €2 million, or by €0.5 million every quarter, by the government of the time.
Besides the payment of children’s allowance, nearly 2,200 families will be receiving nearly €1 million in the disability child allowance. Close to 20,000 persons will be getting their supplementary allowance, to the tune of €4 million. While the numbers of people on these benefits are always declining, Government’s social investment is continuing to increase, as the generosity of the benefit is increasing at a faster rate than the decline in the number of beneficiaries. This is a clear testament to how strongly the current administration in Malta refuses to bow down to the logic of the politics of austerity embraced by Europe’s centre-right establishment.
There is a reason behind this stubborn resistance to the calls for austerity: enhancing these social benefits makes a great difference to people’s lives. The latest National Reform Programme published by Government shows that, when there was a €90 increase in children’s allowance, the proportion of children at risk of poverty was estimated to fall by 0.11%. This means that nearly 100 children were taken out of the risk of poverty. On the same basis, the €250 increase that is being implemented now should raise out of poverty at least another 300 children, as the at-risk-of-poverty should fall by at least half a percentage point.
Photo: Gustavo Fring