Sociologist from Malta

Friday, November 23, 2012

For a progressive budget

Michael Briguglio

The Times, 23-11-12

This year’s Budget is of special significance, not only because it precedes the upcoming election but also in view of the Government’s partisan toing and froing regarding the date. It is now clear that this Budget will provide a blueprint of the Nationalist Party’s electoral programme.

What isn’t clear is whether the promises in the Budget will actually be implemented. Malta’s electoral result and sustainability issues have to be taken into consideration in this regard. The latter, however, is also related to the fact that, as an EU member state, our national Budget has to conform to established EU criteria, hence, governments cannot propose ‘impossible’ budgets.

Alternattiva Demokratika – the Green party has put forward its main budgetary proposals. They are clear and we will not wait for election day to be announced to pronounce them, as we would like these proposals to be introduced as early as possible. We are proposing a progressive orientation for the Budget to meet important social, economic and environmental challenges.

As a responsible party, we believe that serious Budget proposals should focus not only on expenditure but also on the generation of revenue to provide necessary financing. In this regard, we refuse to succumb to the populist race to cut income tax for the top bands, as this will basically mean that fewer funds would be available for public expenditure. In practice, this could result in fewer funds for imperative programmes in health, education and other social priorities.

Indeed, we believe that income tax should retain its progressive status and, if anything, make life easier for low income earners.

We are also reiterating our proposal for taxation of vacant properties, from the third vacant property onwards, which is more urgent than ever given that more than a quarter of properties are vacant. This could help generate public revenue and also act as an incentive to put such properties in the market at affordable prices.

As a progressive party, we are calling for cross-party consensus for an increase in the minimum wage. This is essential because even though, from a comparative perspective, the Maltese economy is doing relatively well in terms of job creation and unemployment levels, many workers are finding it increasingly difficult to make ends meet due to precariousness and increased inequality.

A minimum wage increase can have positive economic and social effects in terms of productivity and purchasing power and could also make work pay, acting as an incentive for persons to seek employment rather that depend on benefits. In addition, we endorse the proposal of the General Workers’ Union for six-monthly COLA adjustments to have a more realistic and timely compensation for workers.

The Budget should also take decisive action in view of the impending energy crisis and unsustainable policies in this sector in the past years. We are now in a situation where Enemalta has a mountain of debt, where Malta is at the bottom of the EU list with respect to renewable energy and where it remains anyone’s guess how Malta can reach a 10 per cent renewable energy target by 2020, in line with EU commitments.

The Government should give a clear sign of confidence in renewable energy by investing massively in shifts towards solar and wind energy and in schemes for solar energy, which have universal access. The more Malta invests in renewable energy, the less dependent we will be on dirty fossil fuels, which are likely to keep increasing in cost. In short, the more we postpone massive investment in renewable energy, the higher the bill we will have to foot in the coming years.

AD also holds that while basic energy use should be subsidized, waste should be penalized. Such a policy combines sustainable energy use with social justice, thus aiming to avoid energy poverty.

Two other areas that require more prioritization in view of problematic situations include public transport and water.

The first requires more investment as, otherwise, we will keep having shortage of buses to cope with demand. But this should also be accompanied by more assertive action from Transport Malta.

As regards water – an elephant in the room in Malta’s environment policy – the metering system on boreholes is being too slow. In the meantime, the quality of such water is rapidly deteriorating. Unless this issue is considered a national priority, Malta risks becoming totally dependent on costly reverse osmosis plants in a few years’ time. Hence, the Budget should take bold steps to step up the metering system and ensure sustainable water usage for the years to come.

When it comes to social policies, the Budget should increase existing investment to ease access to the labour market of vulnerable groups such as women with small children. Accessible childcare centres are a case in point. Family-friendly measures need to be more widely available both in the public and private sector for men and women so that both will be able to achieve a work-life balance and to actively participate in family life, irrespective of the type of family one lives in.

Last but not least, disability issues should be another priority in the Budget. One urgent reform in this regard is the need to increase the disability pension, which stands at only 55 per cent of the minimum wage. Once again, we are calling for cross-party consensus on this to help improve the quality of life of such persons, in a context of social inclusion.

AD will also support policies that strengthen health, education and pensions as well as sustainable incentives to businesses to create employment.

As I have already said, it is unclear whether this Budget will be implemented or not. It is, however, clear that in the upcoming election, AD will live up to its historic responsibility of making progressive and sustainable proposals for social justice, environmental protection and a healthy economy.

Michael Briguglio is chairman of Alternattiva Demokratika.

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