The Malta Independent
Keep social benefits at their current real level and forget all possibility of giving tax incentives for private pensions before government finance comes in good shape to make this affordable.
As a person coming from the social democratic political school there is nothing I would champion more than the fair distribution of the wealth created through the sustaining of a structure of social benefits to ensure that those who cannot help themselves through economic initiative can still participate in the wealth generation up to a level which keeps them cushioned from poverty and deprivation.
On the other hand I am an economic realist. Social services can only be maintained through economic growth and not through a zero sum game. Wealth has to be created before it can be distributed as otherwise the foundations of economic growth will be eroded and the whole social services structure will crumble leading to untold hardship for those that can least defend themselves.
Consequently I consider that in the current economic state it would be risky and presumptuous to consider any improvements in the social benefits network. Any talk of government taking on any additional burden, through fiscal incentives or otherwise, to solve the pension problem which is accumulating 15 years down the road, is misplaced and irresponsible. We have to solve the current problems before we can be in a position to address and provide for problems with a much longer time horizon.
This does not mean that the pension problem should be neglected. The more we raise awareness to the problem the more it would be possible for those still at a considerable distance from pension age to make their own arrangements to supplement the State pension to ensure that they can enjoy a retirement without having to suffer a large cut in their living standards.` But for the foreseeable future, until we engineer some real economic re-structuring and re-position ourselves on a strong economic growth platform based on new productive investments and exports of good and services, it would be false hope to aspire that the State can contribute fiscally to solve this problem.
On the other hand I find it socially unacceptable that those living on social support, those who genuinely cannot participate in economic activity to earn a living, are being exposed to the risk of having to carry the burden of re-structuring by jeopardising the sustainability of the social support structure. For such people even the slightest straw could break their back. They need protection to keep what they have throughout the re-structuring exercise whilst weeding out the undeserving parasites that suck social transfers they are not entitled to and those who rely on social support as a matter of choice rather than necessity.
This should force us to reconsider certain social transfers that are going to those that do not really need them. In theory one could hypothesise models where benefits are subjected to means testing. I am wary of such models as our means testing mechanism is still very faulty and such system could serve as a betrayal of the interest of the very same sectors of society it is intended to protect.
So I am more in favour of outright and across the board reconsideration of whole systems of transfer payments to those sectors of society who can or should do more to help themselves rather than rely on unsustainable State support. And fairly and squarely in this category fall the whole system we built of paying our students to go to university or receive tertiary education.
Much richer and more resourceful countries do not afford such generous schemes. When Labour government tried to re-design such schemes in 1997/1998 to make them affordable and sustainable they were sabotaged by political opportunism of the then opposition now in government with financial problems that came back to haunt them. But what`s right is right. Is it fair that the State cannot sustain those who really need social support in order to support able-bodied youngsters to be paid for studying?
At a time when students have earned themselves the freedom to go and practice their acquired profession overseas it is only fair that society demands that they pay back the social support they receive whilst studying, from their earned income in the years of their profession. Something has to give and it is best if what gives is carried by those who can carry it. High time for our student corpse to regain the mantel of being the social conscience of society and not only protest when their financial interests are effected or when parking facilities at university fall below their expectations.
Keep social benefits at their current real level and forget all possibility of giving tax incentives for private pensions before government finance comes in good shape to make this affordable.
As a person coming from the social democratic political school there is nothing I would champion more than the fair distribution of the wealth created through the sustaining of a structure of social benefits to ensure that those who cannot help themselves through economic initiative can still participate in the wealth generation up to a level which keeps them cushioned from poverty and deprivation.
On the other hand I am an economic realist. Social services can only be maintained through economic growth and not through a zero sum game. Wealth has to be created before it can be distributed as otherwise the foundations of economic growth will be eroded and the whole social services structure will crumble leading to untold hardship for those that can least defend themselves.
Consequently I consider that in the current economic state it would be risky and presumptuous to consider any improvements in the social benefits network. Any talk of government taking on any additional burden, through fiscal incentives or otherwise, to solve the pension problem which is accumulating 15 years down the road, is misplaced and irresponsible. We have to solve the current problems before we can be in a position to address and provide for problems with a much longer time horizon.
This does not mean that the pension problem should be neglected. The more we raise awareness to the problem the more it would be possible for those still at a considerable distance from pension age to make their own arrangements to supplement the State pension to ensure that they can enjoy a retirement without having to suffer a large cut in their living standards.` But for the foreseeable future, until we engineer some real economic re-structuring and re-position ourselves on a strong economic growth platform based on new productive investments and exports of good and services, it would be false hope to aspire that the State can contribute fiscally to solve this problem.
On the other hand I find it socially unacceptable that those living on social support, those who genuinely cannot participate in economic activity to earn a living, are being exposed to the risk of having to carry the burden of re-structuring by jeopardising the sustainability of the social support structure. For such people even the slightest straw could break their back. They need protection to keep what they have throughout the re-structuring exercise whilst weeding out the undeserving parasites that suck social transfers they are not entitled to and those who rely on social support as a matter of choice rather than necessity.
This should force us to reconsider certain social transfers that are going to those that do not really need them. In theory one could hypothesise models where benefits are subjected to means testing. I am wary of such models as our means testing mechanism is still very faulty and such system could serve as a betrayal of the interest of the very same sectors of society it is intended to protect.
So I am more in favour of outright and across the board reconsideration of whole systems of transfer payments to those sectors of society who can or should do more to help themselves rather than rely on unsustainable State support. And fairly and squarely in this category fall the whole system we built of paying our students to go to university or receive tertiary education.
Much richer and more resourceful countries do not afford such generous schemes. When Labour government tried to re-design such schemes in 1997/1998 to make them affordable and sustainable they were sabotaged by political opportunism of the then opposition now in government with financial problems that came back to haunt them. But what`s right is right. Is it fair that the State cannot sustain those who really need social support in order to support able-bodied youngsters to be paid for studying?
At a time when students have earned themselves the freedom to go and practice their acquired profession overseas it is only fair that society demands that they pay back the social support they receive whilst studying, from their earned income in the years of their profession. Something has to give and it is best if what gives is carried by those who can carry it. High time for our student corpse to regain the mantel of being the social conscience of society and not only protest when their financial interests are effected or when parking facilities at university fall below their expectations.
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