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.

Malta Independent - - NEWS -

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

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