Parliamentary committee fails to adequately address impact of unprecedented inflation

The Family Affairs Parliamentary Committee spent almost two years discussing the heavy burden being caused by unprecedented inflation on families, only to produce a handful of recommendations and no solutions.

Last week, a 16-page report presented to parliament by the committee’s chairman, former minister Carmelo Abela, cited various studies that show a steep rise in the cost of essential products and services, driving thousands of families to the verge of poverty.

In response, the committee recommended that “more studies are needed to show better the statistics connected to inflation” and that “more programs on financial literacy” should be needed.

The Committee’s report listed several suggestions by experts, including the need to lower energy subsidies and address those in need, stop the distribution of indiscriminate cheques, and instead target additional aid to vulnerable families and remove any taxation on the annual cost of living increase.

These tangible measures were all put aside, as the committee adopted much less controversial recommendations, which will not likely have any real impact on society.

The report, which considered only the situation until 2022, shows that according to a Caritas study, the cost of essential items for families, particularly food and medicine, jumped by an astounding 25% over the previous two years.

Prices continued to swell until this day as Malta is experiencing a continued rise in inflation, higher than the EU’s average.

Among the hardest hit are low-income earners, particularly pensioners, who saw their daily costs rise by 36% between 2020 and 2022.

The report quoted a UHM official declaring that the annual cost-of-living increase does not even cover the cost of food, let alone other essential needs.

The report also states that the alarming situation is having repercussions on poverty, with the operators of a foodbank – the Foodbank Lifeline Foundation – informing the committee that the number of families seeking their help jumped from 100 to 650 per week by the end of 2022.

Increasing overseas transport costs and demand for better wages, added to the shortage of manpower, are the main contributors to the increase in Malta’s cost of living, according to experts.

This is exacerbated by drastic increases in the cost of property and rent, leaving many families deprived of ever owning property.

The Malta Chamber and the Malta Employers Association have warned the committee that drastic interventions are needed by the authorities to try to bring inflation under control as Malta is now risking losing its competitiveness to its neighbouring countries and the rest of Europe.