Black economy is booming
The country has by now become quite familiar with the ups and downs of earning a living and putting some money in their pockets.
Rachel Borg is an independent columnist based in the tourism industry
After all the turbulence of VAT and CET and VAT again and cash registers and MFSA and water and electricity rates and petrol prices, gas prices and those unexpected doctor’s fees or school fees, to mention but a few of life’s challenges, most households have found a level in which they can make ends meet and even afford some indulgences. Others still struggle to keep abreast of basic living.
The reduction in water and electricity bills was beneficial to re-align income with expenditure for households. On the merit of whether it came via the BWSC, interconnector and lower oil prices or through the strategy put in place by the incoming administration, that is not the issue here.
The realignment served to correct the imbalance which was a result of the high increases previously affected. Income overall and standard of living had increased under the previous Gonzi administration but then it got side-lined by the energy item, whether or not everyone faced the effect to the same degree and irrespective of whether they were actually better off then than now in real terms.
As the standard of living increased, people had to cope with more and more expenses, some never before having formed part of their budget, such as private school fees, travel, shopping, more occasions than just Christmas, the Holy Communion, a family wedding and the Festa. Weddings became more of a major and frequent expense. School and university brought monthly extras amounting to quite a bit. The family car became three cars minimum with all the added running expenses of servicing and petrol. Rent rocketed. Buying property went through the ceiling.
How to cope with all these new demands on a basic income?
Drawing in money from wherever possible, whenever possible. And that includes not just vanishing the VAT receipts, but also giving a vote to whoever has the best ideas in generating income, jobs and opportunity.
The Nationalist Party’s proposal on reducing income tax to 10% for retail and small businesses is a fresh idea that will benefit not just the direct beneficiaries but the country as a whole. It will take at least some of the racket out of running a business and help calm the working environment. It speaks to mature business minded people and the many who have invested in shops or who have had shops in the family for generations but find it hard to cope with the competition.
As far as the sales staff, so many of these are foreign nowadays that perhaps it will help to once again attract good local workers to work in the retail industry or travel industry. When you travel abroad you can see in many city centre the same standard brands that are available here. Why then, do we still prefer to shop abroad? Because it is not just about the choice but also about the experience.
Unfortunately too many shops in Malta are still way behind when it comes to retail service and display and not just shops but also businesses such as, for example, IT service. The beginning is all friendly and full of high standards but this quickly drops as soon as there is too much work to handle and the cost begins to spiral.
In shops, before the counters became mostly staffed by foreigners, going in to browse or shop meant being subjected to the loud relaying of who will be taking which shift and how so and so can go take a hike (to put it mildly). Continuous complaining and totally ignoring the customer to the extent that going to the counter to pay felt like an intrusion on someone’s private conversation with the sales person making sure to have their head turned away from the customer to never make eye contact.
Those shops which have an efficient and friendly staff will be rewarded not just by repeat customers but also by being able to invest into their shop and provide further attractive conditions for their staff. It will give more pride to the employees whose work will now be recognised and better appreciated.
The same cannot be said for this government’s attitude towards lower income sectors and workers. The emphasis on money, money, money has fuelled people’s frustration. What originally served as a good indication, with the reduction in energy bills, was soon lost and forgotten with the price we pay for petrol and diesel, the increases in daily or occasional charges such as licences, the increase in the cost of living and the wide gap between the ridiculously high salaries being dished out for nonspecific employment and the actual take home pay of ordinary employees. It is not beyond the most simple mind to come to the conclusion that way too much money is going to those at the top, those who do not even deserve it, whilst the band of those who pay income tax and pay to maintain a basic lifestyle are being left further and further behind.
For many, the first option that comes to mind is to work the black economy a bit more than they would like to. Several times, in whatever service it may be that is being provided, there is not even mention of a VAT receipt. It is like you must be out of your mind or against your neighbour if you think you should receive a VAT receipt. Solidarity with others implies that you should not question their motive or intention when not providing a receipt.
Other times it may not be a black economy but one which is over-priced. The cost of dining out in Malta has rocketed. Not all restaurants provide the same consistency of quality. Even going out for a pizza nowadays comes at a lifestyle price. It can’t just be a Margherita or Funghi. Dessert portions get smaller and more expensive and don’t let’s start on the wine and water. Which may or may not be ok as long as you come out satisfied.
It is time though that we begin to synchronise again, between expenses, expectations and real income. All the talk of materialism in everything we do nowadays, leaves little room to deny that the €4.00 something per hour on the minimum wage will not even buy you a pizza or a bag of pastizzi. It is like still using typewriters whilst everyone is sliding their fingers across the iPhone. Or a telex machine with the yellow tape crawling through the grooves.
We can talk of adjusting the cost of living index as though we are talking about changing from a horse and cart to a Morris Minor. It has already gone way past all that. Everything else that has to do with jobs and households is way beyond any index which will debate whether or not eating meat once a week is an indicator of being poor. People can eat what they like and are supposed to eat what they like. If someone is fine with a bag of pastizzi whilst someone else only goes for steak, has nothing to do with it.
The core issue is that €4.00 per hour belongs in the dark ages and only serves to create a black economy because being the enterprising people that they are, the Maltese, like many other nations at that, will find a way to boost their income. Apart from that, legitimate employment also shows that people having both a full-time and a parttime job now stands at 24,183, an increase of 6.8%.
It is gone past midnight for Cinderella.
The Malta Independent Saturday 26 November 2016