Gov­ern­ment needs to ad­dress mar­ket fail­ures in up­com­ing bud­get – Car­i­tas Direc­tor

● Re­dis­tri­bu­tion of wealth, rent reg­u­la­tion, en­sur­ing good qual­ity of life for low-in­come earn­ers among top ex­pec­ta­tions for up­com­ing bud­get by var­i­ous key mem­bers of civil so­ci­ety

The Malta Independent on Sunday - - NEWS -

He­lena Grech Car­i­tas Direc­tor Leonid McKay be­lieves the gov­ern­ment needs to ad­dress mar­ket fail­ures es­pe­cially in the rental mar­ket.

The Malta In­de­pen­dent on Sun­day con­tacted var­i­ous key mem­bers in civil so­ci­ety to hear what they think the gov­ern­ment should fo­cus on in the up­com­ing bud­get. Fi­nance Min­is­ter Ed­ward Sci­cluna has al­ready spo­ken of bud­get mea­sures to im­prove in­fra­struc­ture, fight tax eva­sion, health, ed­u­ca­tion and some form of rent reg­u­la­tion.

Chiefly, Car­i­tas be­lieves that the gov­ern­ment should fo­cus on the re­dis­tri­bu­tion of wealth in or­der to tackle in­come in­equal­ity.

“For us [Car­i­tas], this is an op­por­tu­nity to fo­cus on dis­tri­bu­tion of wealth. Un­der the cur­rent eco­nomic cir­cum­stances, the econ­omy is ex­pe­ri­enc­ing a ro­bust eco­nomic growth and Car­i­tas Malta an­tic­i­pates a bud­get where re­dis­tri­bu­tion of wealth is a top pri­or­ity.

“We want to see wealth spread in a more just way, in a way where the low­est in­come earn­ers feel an im­prove­ment in their lives. In­di­rectly, we are ad­dress­ing in­come in­equal­ity.

“It is a prin­ci­ple we re­ally be­lieve in. We as­sess the bud­get from a ‘Car­i­tas’ point of view, on how will it af­fect dis­pos­able in­come to the most vul­ner­a­ble.

“In our re­ac­tion to last year’s bud­get, we said that this is giv­ing a voice to the lit­tle man and is the first step. We are ex­pect­ing the sec­ond step – this is when there is fo­cus on these pol­icy ar­eas: so­cial hous­ing – al­lo­cat­ing a large bud­get to so­cial hous­ing, mar­ket fail­ure in the com­mer­cial rent mar­ket, an in­crease in non-con­trib­u­tory so­cial ben­e­fits.

“Gov­ern­ment has the obli­ga­tion to re­dress mar­ket fail­ures, with con­crete so­lu­tions for de­cent and af- ford­able hous­ing in the com­mer­cial rental mar­ket.

“Non-con­trib­u­tory so­cial ben­e­fits which en­sure that those peo­ple who can­not work re­ceive ad­e­quate ben­e­fits that are cal­cu­lated on a bas­ket of es­sen­tial goods. It is not just wages that have to be ad­e­quate, but also the so­cial ben­e­fits. Some peo­ple lit­er­ally can­not work, and they need a de­cent in­come.

“There are oth­ers who are on so­cial ben­e­fits, be­cause for some rea­son it does not pay them to work. There is a ta­per­ing sys­tem that is al­ready present; we hope this re­mains in place as it helps in­cen­tivise them to go out to work.”

Al­leanza Kon­tra l-Faqar chair­man Charles Miceli also spoke about rent reg­u­la­tion. He went a step fur­ther say­ing that there needs to be some mech­a­nism where a con­tract en­tered into by a ten­ant and a land­lord cov­ers a pe­riod of years, and within that time the rent can only be in­creased by, for ex­am­ple, a cost of liv­ing ad­just­ment.

He said that this would give peace of mind to many fam­i­lies who strug­gle to get by.

“Wages need to be re­viewed, as well as ben­e­fits es­pe­cially for pensioners. Gov­ern­ment needs to carry out an ex­er­cise, like Car­i­tas did, to find out how much a sin­gle per­son needs to ex­ist, and pay out ben­e­fits/pen­sions based on this.”

Univer­sity lec­turer and aca­demic Dr Marie Briguglio

A vo­cal ac­tivist against in­creased con­ges­tion and the pri­ori­ti­sa­tion of ve­hi­cles over pedes­tri­ans, Briguglio had this to say:

“Every year, the bud­get presents us with a won­der­ful op­por­tu­nity to stim­u­late some eco­nomic ac­tiv­i­ties and to tame oth­ers. There are some ob­vi­ous ar­eas where the mar­ket has un­der-per­formed: pro­vi­sion of public in­fra­struc­ture, cre­ation of open recre­ational spa­ces, com­mu­nity ac­tiv­i­ties, hous­ing for lower in­come house­holds, cater­ing for healthy life­styles.

“This is where the gov­ern­ment should be spend­ing money, giv­ing in­cen­tives. But there are also some ar­eas where the free mar­ket has over­done it: cars, con­struc­tion and con­ges­tion.

“Gov­ern­ments have not only sys­tem­at­i­cally failed to rein in cer­tain ac­tiv­i­ties but, on the con­trary, have of­ten stim­u­lated them through hid­den sub­si­dies.

“It is high time that the num­ber of cars on the road is re­duced (sen­si­tively de­signed cir­cu­la­tion, con­ges­tion, park­ing charges), and ob­struc­tions (en­croach­ment charges), and to com­ple­ment this with in­cen­tives to walk, cy­cle, work from home, stay lo­cal, car-pool or bus-it.

“The use of taxes and charges, grants and sub­si­dies are not just a way for gov­ern­ment to col­lect and re­dis­tribute in­come from rich to poor, but also a way to steer the econ­omy away from over-heated, pol­lut­ing, ex­trac­tive sec­tors to­wards sec­tors that give us qual­ity of life in the short-term and sus­tain in the longterm.”

Car­i­tas Direc­tor Leonid McKay

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