A tale of two Maltas

27% of Maltese families - made up of 109,943 persons in 2010 - could not afford to pay unexpected financial expenses. 55,608 could not afford to keep their houses warm in winter. 41,219 could not afford to eat meat or vegetables every other day. 29,676 could not keep up with paying mortgage and utility bills on time. 245,918 persons could not afford a week's holiday away from home.

On Thursday morning, the National Statistics Office said that its Survey on Income and Living Conditions for 2010 showed that 15% of the local population lives in monetary 'at-risk-of-poverty' while 20.6% live 'at-risk-of-poverty or social exclusion'.

NSO said that during 2010, the total number of households was estimated at 143,680, with each household reporting an average gross income of €25,968 and an average disposable income of €21,847. Average income and average disposal income has fallen by 1% compared to 2009.

NSO said that 63,474 persons had an income of €6,260, which is a quarter of the average income. This amounts to 15.5% of the local population and they are considered at risk of poverty. Compared to 2009, the at-risk-of-poverty rate edged up by 0.2% but remained lower than the EU average.

Persons aged below 18 and those aged 65 and over were at a greater risk of being poor, with respective rates of 20% and 19%. On the other hand, the at-risk-of-poverty rate for those aged between 18 and 64 was estimated at 13%.

Persons living in households with dependent children tended to be at a higher risk than those living in households without dependent children - 18% and 13% respectively.

At 56%, persons living in single-parent households registered the highest at-risk-of-poverty rate, as in previous years. The at-risk-of-poverty rate for persons living in households where the income earner is unemployed stood at 36% for households without dependent children and 71% for households with dependent children. As expected, a negligible at-risk-of-poverty rate was registered among persons living in households with jobs.

The NSO's Survey on Income and Living Conditions for 2010 showed that 15% of the local population was deprived of at least three of nine deprivation items (ability to face unexpected payment, utility bills, warm the house, afford holidays, eat meat, and have a washing machine, TV and car). Also, around 6% were living in households that were deprived of at least four out of these nine items; this classifies them as severely materially deprived households.

In 2010, the at-risk-of-poverty or social exclusion rate stood at 20.6%, below the EU average by nearly 3 percentage points. The younger age groups tended to be more vulnerable and at risk of poverty than their older counterparts.

Give back the money

10 days ago, Prime Minister Lawrence Gonzi said that his cabinet would lead by example and as from 1 January 2012 the €500 weekly salary increase for ministers since 2008 was being withdrawn.

On the same day, his government had quietly smuggled in a raft of austerity measures when it revised the Budget for 2012 to cut more than €40 million in its expenditure. Gonzi said that as people were being asked to make sacrifices, the ministers would set a good example and share the pain by not taking the salary increase of €500 a week they gave themselves behind everyone's back in 2008.

Maltese families and businesses have been making sacrifices since 2008. At the same time that Gonzi and his ministers agreed to give themselves the €500 weekly salary increase, government was imposing high water and electricity bills.

So by the same logic, the ministers should not have given themselves this raise when they were imposing such sacrifices on the rest of the population.

In mid-November the National Audit Office called the €500 weekly salary increase "a good example in bad practice" and "an embarrassing experience".  

NAO said that the Prime Minister should have informed parliament and taxpayers about this increase, which was introduced in May 2008. The salary increase was kept carefully hidden and only came to light at the beginning of 2011 after a number of parliamentary questions by the Opposition.

In 2008, just after the general election, Cabinet decided to give the Prime Minister and Ministers a salary increase of €500 a week, an increased duty allowance of €6,000 a year and to also start receiving their honoraria as MPs.

The Prime Minister's total pay package was €47,806, and with Cabinet's decision in 2008, it was brought up to €76,490. Ministers' financial package was increased from €42,070 to €69,606.

For three and half years the Prime Minister and his ministers have been taking this €500 weekly salary increase while most of the rest of the population saw their income fall. If the Prime Minister and his ministers want to share the pain and lead by example, there is only one credible thing they can do: give them back.

Mr Prime Minister: Give back the money you took as a salary increase since 2008.

Evarist Bartolo is shadow minister for education.