Reports in the press that poverty in Malta has been increasing are becoming ever more alarming. The government intends to substantially increase the COLA in this year’s budget and issue additional payments to pensioners which are undoubtedly welcome but the government has no plans to address the structural problems in our economy which are driving inequality.
For many years, Malta was an economy which had an edge with its low wages and salaries for skilled work which caused it to attract significant foreign direct investment for this reason. This model is nowadays, totally broken as low wages in Malta are no longer sustainable for a decent life, especially if you don’t own property or you don’t have other assets or money. Young generations are also being completely cut out from the property market.
There are more than €20 billion in Maltese bank deposits. The money supply in Malta has shot up ever since 2011. We have seen significant GDP growth rates during the last ten years. The price of property has more than doubled in just eight years. There is so much money in Malta that people have no idea what to do with it to the extent that Malta government bond sales are often oversubscribed. Yet, poverty is increasing and as much as a quarter of the workforce struggles from pay-check to pay-check, but the statistic of workers who are struggling is probably much higher.
The government intends to keep incentivising speculation and growth in the property market instead of addressing the issue properly with planning policies which is staunchly adamant not change. There are also no plans to change our plans for economic growth from those based on low-productive jobs to more valuable production jobs such as the manufacturing industry – we are building a race track in a prime industrial estate. We have insanity instead of planning.
The Labour government is creating an economy where a small number of people are getting extremely wealthier while half of the population ends up depending on government jobs and help. Then there is the other major risk that our economy is also being propped up with high levels of unsustainable government spending.
So, on one hand, we have a material reality of poor working people that will be negatively impacted when the government is unable to prop the economy with its finances and another material reality of a small class of very rich individuals and families who will keep getting richer irrespective of what happens.
It’s like Dubai but with Greek characteristics.