Issue link: https://maltatoday.uberflip.com/i/740013
maltatoday, WEDNESDAY, 19 OCTOBER 2016 7 News GourmetToday every Saturday 16.05pm on TVM Scicluna: Rising rental prices result of low supply CONTINUES FROM PAGE 1 The gov- ernment will only double rental subsidies for low-income earners if they present a contract, that will in turn ensure the taxman can have tabs on more landlords. "We recognise this is unchart- ed territory… no government has ever entered into the market in this way," Muscat said. "Our other pilot project to encourage landlords to keep rents stable over seven years will be a way for us to test the waters there, so that we can incentivise land- lords to keep rents stable against more favourable tax rates. I un- derstand what people like [Alli- ance Against Poverty's] Charles Miceli are saying, but a blunt rent regulation without testing the market, would be jumping the gun." MaltaToday suggested that a land hoarding tax could be in- troduced on empty housing, when finance minister Edward Scicluna claimed that rising rental prices were an answer to low supply. "This is a trend that has been taking place over the last three years, as the economy started expanding like never before," Muscat said in an intervention. "Before taking such a major policy shift for state interven- tion into a free market, we have to exhaust other routes and see what their effect is." Muscat added that higher rents could not just be the effect of skilled foreign workers. "These prices are ref lecting the desire of people to come and live here… At this point in time, we are see- ing different policy options that we can balance out: there are imperfections in the rental mar- ket, usually stemming not from a regulated market, but from an underground market, when not knowing who is renting and at what price." PHOTOGRAPHY BY CHRIS MANGION New social measures should be 'just the start' – Caritas director Disappointment at government's failure to raise minimum wage MIRIAM DALLI THE voice of the weakest of so- ciety is finally being heard but the social measures announced in Budget 2017 cannot be consid- ered as the be all and end all of the social budget, Caritas direc- tor Leonid McKay has told Mal- taToday. "It's a budget that has addressed families with low-income and which recognises that there are families who are struggling and cannot get out of the poverty trap on their own," McKay said. A study conducted by Caritas has provided policymakers with a snapshot of the social situa- tion in Malta: the study found that a couple with two children requires a minimum of €11,466 a year to live a decent life, while a single parent with two children requires €9,197 and an elderly couple on a pension requires €6,527. Food was the most significant cost – accounting for €6,211 out of the first family's budget, €4,604 out of the second family's budget, and €2,945 out of that of the retired couple. Despite the calls by Caritas, Al- ternattiva Demokratika and the Alliance Against Poverty among others, said the government has not increased the minimum wage, with the Prime Minister urging social partners to engage in a discussion. Along with a number of so- cial measures mainly target- ing those at the lowest strata of society, the government has intervened to increase the cost of living adjustment – calculated at €1.16 but which the govern- ment raised to €1.75. "The government's interven- tion was most welcome: whilst the economy is growing, growth is not reaching every one and it is not trickling down to the lowest bands," McKay said. Prompted by MaltaToday, Mc- Kay said that, likewise, the gov- ernment must intervene to raise the minimum wage. "The government has tried to increase the disposable income without 'burdening' the employ- er. But, given that the economy is doing so well, I ask: if we don't in- crease the minimum wage today, when will it ever increase?" McKay also warned that not increasing the minimum wage would affect an individual's fu- ture pension as the benefits can- not be ref lected in pensions. "We are disappointed especial- ly since the Caritas study, which was given so much attention, made a strong case in favour of a rise in the minimum wage." The Caritas director also said that the budget should have addressed the rising prices of healthy food, identified by the study as a family's most signifi- cant cost. On the other hand, Caritas welcomed other increases to social benefits and anomalies that have been addressed – such as that the allowance for people who take care of an elderly rela- tive has now been extended to married persons as well. McKay pointed out that the government should also have placed people suffering from ill- nesses such as Parkinson's, Alz- heimer's and Aids, on the agenda. Questioned about rent regula- tion, McKay admitted that this would remain the biggest prob- lem. Subsidies announced by the government – doubling the sub- sidies – was welcomed as positive by McKay but doubts were raised on its efficacy. He welcomed the pilot project for private landlords who enter into a 7-year rent contracts with 100 low-income families. At "so- cially just" rents, landlords will be taxed at 5% as opposed to 15%. Asked whether the government should intervene in the rent mar- ket, McKay said studies were re- quired to find the best measure. "We believe that the state should intervene where the mar- ket fails… and the market is not sacred." Reiterating that the measures announced were just the first step in giving the most vulner- able a stronger voice, McKay said the success of the budget can only be calculated once the market ad- justs to the measures: "A further increase in food prices and rents will render those measures irrel- evant."