THE LABOUR and finance ministers were unable, after a two-hour meeting yesterday, to decide the offset measures the government would take in order to help low-income families cope with the five per cent VAT imposed on food prices. They would be meeting again next week in the hope of finalising the measures, because the government wanted the introduction of the measures as soon as possible.
Speaking after the meeting, Labour Minister Sotiroulla Charalambous expressed the wish that discussions “are completed speedily and the implementation of the measures is immediate”. This was why the government was looking at measures that would not need long to be prepared and their implementation would not incur high administrative costs. If only the government showed the same determination and sense of urgency when it was obliged to make savings.
Not only is Mrs Charalambous in a hurry, she is also hoping to help all those who need support. In the past, she said, state assistance did not go to all those in need, as there were low earners who were not on the government records because they were not receiving any state benefits. She wanted the assistance to go to these people as well, even though she did not say how the state services would find them.
Would people who received an income lower than a minimum set by the government be invited to apply for state help? Would the government find out who they are and send them a pay cheque? And how long would the state services need to prepare lists of the people entitled to state assistance? Given that the government does not even have records of many of the low earners, how would it be able to offer ‘targetted assistance’ as the minister had claimed?
This slapdash approach to state assistance for low earners is a recipe for disaster which could end up costing the taxpayer much more than it would from the imposition of VAT on food and medicine. It would be preferable for the state services to take a couple of months longer preparing the offset measures so they could be effectively targetted. Do we really need a repeat of what happened a few months after President Christofias’ election, when he decided to give an Easter bonus to pensioners and gave it the wealthy pensioners as well? The excuse at the time was that it would have taken too long to give the bonuses to the neediest pensioners.
There is a risk of making the same mistake now, because the state services will not have the time to process lists of all those eligible for help. And it would not be a surprise if the state ends up paying out much more in offset measures than it would collect from the VAT charge on food.
