2019: Searching for the key to happiness and prosperity

With one year coming to an end, and a new one about to begin, this is the time for us to start thinking about ways in which we can become healthier, and ultimately, happier. There are some simple observations which some prefer to call ‘resolutions’ that c

On the negative side we realise that, over Christmas, we have stretched our finances, drunk too much at the office party and perhaps stretched the tolerance of our loved ones. Statistics show how couples will ‘keep it together’ for Christmas just for the sake of appearances. Sadly, when the party stops, there is a feeling of harassment hitting couples who were already on the brink of separation. It is becoming a common occurrence that, following the stress of the holiday period, some couples notice the build up of tiny cracks in their relationship. A cautious approach is needed next year to avoid bringing such underlying issues to a head. Needless to say, a genuine reconciliation effort may work wonders to save the relationship and enjoy another year of harmonious habitation.

Moving on, we notice how our political leaders wish us to face another year, reminding us to relish the feel-good factor that a healthy economy can foster. Remember how generous our tiny nation is, having coughed up over €7.1 million in donations during the ‘L-Istrina’ jamboree – a record high. Donate and be noticed in the jamboree, encouraged the fat cats to pour thousands in the pot as an unassailable sign that business is running on steroids. Also showing their faces were some of the candidates for the May elections, helping the event by taking calls from donors.

Away from the razzamatazz, pensioners are concerned that the cost-of-living award barely compensates for inflation. Such imbalances conjure up a relative poverty feeling slowly gripping them. To be fair, the 2018 Budget spared no effort in reaching out to the under-privileged and helping those on minimum wages, but Caritas continues to push the government to consider announcing a living wage index, as there is in the UK.

It is a contradiction when we hear of 80,000 people on the poverty line when, at the same time, supermarkets are brimming with shoppers burning their credit cards to the limit. Can there be a two-tier economy running in parallel? Party apologists wax lyrical that these are ‘the best times ever’, pointing to restaurants and pubs full to the brim, while the champagne flows at corporate functions. Workers enjoy full employment and can earn an extra buck on the side. Yes, it is an enigma that the 7.2 per cent increase in GDP recorded in the last quarter should see everyone in great spirits but in reality the disparity between the wealth attributed to fat cats (sporting Ferraris and sipping gin & tonics on expensive yachts) and the working classes is getting wider. Ideally, this imbalance is reduced and attempts made next year to oil the administrative machinery to admit more snouts gorging deep in the trough.

But not everything is doom and gloom. It goes without saying that the government merits plaudits for its success in planning a flourishing economy. This has registered an extraordinary growth in the past five years, yet this trend must not fool us and encourage us to wave the flag of complacency. Let us congratulate Finance Minister Professor Scicluna for his smart handling of the economy with the ‘debt to GDP’ ratio falling to below the 60 per cent official EU threshold: this hit almost 73 per cent at the end of 2012 and we only just managed to avoid being fined under the Excessive Deficit mechanism. Now, it is expected to go down even further.

Lower debt means a welcome fall in servicing costs next year, but are we living in a fools’ paradise? The answer is that things are improving but there are still a number of mountains to climb. As they say, Rome wasn’t built in a day and the elusive trickle-down mechanism takes time to work its miracle cure. The showering of a tax refund was a noble gesture and certainly helped cool tempers frayed by the prevailing increase in foodstuffs such as bread and milk.

Another challenge in 2019 is combating rising rents, which can be a social curse for tenants on lower incomes or with large families to sustain. Pensioners come in with a load of demands. There is a general feeling that, unless supplemented by an external income, the statutory pension mechanism is insufficient to help people from sliding into the poverty trap. To verify this issue, two years ago PKF designed a number of one-to-one ‘questionnaires and carried out a confidential survey among tenants in homes for the elderly housed in three governmentrun centres.

The main purpose for this study was to educate the public on aspects of poverty by identifying the shifting needs of pensioners. Its methodology included talking to a representative sample of people aged 65 and over, who are usually identified as being at risk of suffering social exclusion due to a lack of income. According to the latest 2016 data published, Malta registered a reduction in the risk of poverty and social exclusion (AROPE) rate from 22.4 per cent to 20.1 per cent. Not surprisingly, when one breaks down this value by age group or household type, one finds that this enhancement has not benefited everyone.

In particular, in the age group of 65 and over, the AROPE rate increased from 23.7 per cent in 2015 to 26.1 per cent in 2016. By 2030, the number of people in this age group will exceed that of those aged between 15 and 24.

This inexorably shows that society is getting older and that it will inevitably face challenges due to a tectonic movement in demographics. The PKF survey concludes that, without an income supplement, these may easily fall below the poverty line. Furthermore, respondents receiving the maximum two-thirds pension said the amount is not representative of their total lifetime contributions, given that the national pension limit is capped.

In conclusion, there are those who like to argue that the key to an equitable solution devolves squarely on the efficient operation of the trickle-down mechanism. The question is: will it do its job in 2019 to distribute the surplus in an equitable manner?

Wishing all readers a prosperous New Year.