Issue link: https://maltatoday.uberflip.com/i/1527639
7 maltatoday | WEDNESDAY • 9 OCTOBER 2024 MT SURVEY ANALYSIS THE overall picture from the lat- est MaltaToday survey indicates that the Maltese are less con- cerned about traditional "bread- and-butter" issues like jobs and low incomes and are increasingly worried on the repercussions of the current economic model. The primary worries include the rise in foreign workers (22%), traffic congestion (21%), excessive construction (10%), and overpop- ulation (8%). Even the two key is- sues not directly linked to the eco- nomic model—corruption (14%) and the cost of living (10%)—may be connected to rising inequali- ty and regulatory loopholes that benefit certain groups, as well as gentrification pressures particu- larly in areas with a concentration of affluent foreigners. In contrast fewer than 2% cited low wages as a concern while the percentage of those who men- tioned the cost of living declined by 19 points since February. This suggests that the government has managed to alleviate basic eco- nomic anxieties. Noticeably absent from the list of top concerns are energy bills (controlled through government subsidies), poverty, and the inabil- ity to make ends meet. This marks a shift from the pre-2013 land- scape when dominant concerns centred on energy bills and the cost of living. Foreigners as scapegoats? However, an alternative inter- pretation could be that work- ing-class respondents are more likely to blame foreign workers for their financial struggles rath- er than low wages offered by em- ployers, possibly because of the decline in trade unions and class consciousness. This could be even more the case among manual workers. Concern over foreign workers is notably higher among the secondary-ed- ucated (28%) who are more likely to engage in manual labour, com- pared to those with post-second- ary (21%) or tertiary-level educa- tion (17.5%). On the other hand, concerns over 'overpopulation,' which is more tied to infrastructure and environmental strains, are more prevalent among the tertiary-ed- ucated (13%). Yet while antagonism towards foreign workers may have become an outlet for other frustrations, the survey suggests that by subsi- dizing energy prices and sustain- ing welfare and in-work benefits for lower-paid employees, the government is managing to keep a lid on material grievances. However, this balance hinges on sustaining current levels of eco- nomic growth, which have so far supported social spending with- out necessitating higher taxes. Financing the tax cut However, the government is now planning to reduce its tax revenue by €100 million through tax cuts aimed at boosting the standard of living for the middle class, including the often-over- looked lower-middle class. Simultaneously, the government has pledged to address public concerns by reducing the inflow of foreign labour. The question is; could this clampdown on for- eign workers—key contributors to Malta's record economic growth over the past decade—jeopardize the very expansion needed to sus- tain ongoing social spending and upcoming tax cuts? The administration may still tweak the economic model and garner support by taking symbolic actions, such as targeting the most visible categories of foreign work- ers like platform workers and re- jecting the most controversial de- velopment projects, while keeping the broader system intact. Just last week, the government announced that, since July 1, the number of third-country nation- als employed as food couriers or holding a Y-plate license has de- creased by 587. But these represent only small minority of foreign workers re- siding in Malta. Moreover, by fo- cusing on failed asylum seekers— some of whom, like the Ethiopian community, have resided in Malta for two decades—the government may also be more interested in placating public sentiment, with- out significantly altering the wider economic picture. While the government appears responsive to public concerns in its media sound bites and symbol- ic measures, it remains doubtful that it will fundamentally reform the current economic model, es- pecially on the eve of tax cuts that heavily depend on sustained eco- nomic growth. Coupled with this is increased pressure to increase spending on public projects to address in- frastructural and environmental concerns. This raises the ques- tion whether Labour can actually square the circle by sustaining public spending and cutting taxes while at the same time clamping down on foreign labour. The clampdown on evasion But an alternative approach might see the government raising more revenue by intensifying its clampdown on tax evasion and the black economy. Finance Minister Clyde Caruana recently announced that the gov- ernment is on track in collecting an additional €200 million in tax revenue over last year's figures, achieved through curbing tax eva- sion rather than relying on eco- nomic growth alone. The proposed measure to stop employers from paying salaries in cash announced by the Prime Minister on Sunday, could also be a move in this direction, even if it could effectively further marginal- ize asylum seekers who find it dif- ficult to open bank accounts. But additional revenue from this clampdown could provide the government the flexibility it needs to recalibrate the economic model without causing major dis- ruptions. But pressures to promote the growth required to finance both tax cuts and increased social and infrastructural spending, could weaken the resolve to combat abuse both with regards to tax- es and the employment of third country nationals. The latest MaltaToday survey highlights widespread discontent with the current economic model focused on growth partly driven by construction and foreign labour. Can the government sustain the growth needed to fund its energy subsidies, implement tax cuts and still address public concerns? JAMES DEBONO asks. Can Labour tweak the model that drives growth? Concern over foreign workers is notably higher among the secondary-educated who are more likely to engage in manual labour