From the Malta Independent on Sunday
Daphne Caruana Galizia
The Health Minister’s suggestion that those who can afford to do so should pay for using the health services provided by the State has drawn down the expected opprobrium. Much of it is because we have not been told - I suspect because it has not been decided at this stage - at what level they plan to set the income threshold for non-eligibility. As several people have already pointed out to this newspaper and its sister daily, the government cannot set an arbitrary income threshold to sort out those who should pay from those who should not - unless, that is, this threshold is set at a household income of Lm25,000 a year or thereabouts. As there are only a few individuals who declare this level of income, and most of them appear to be sitting on the parliamentary benches on both sides of the House, then setting the threshold at this realistic level will seem like the persecution of the few, and will yield almost no savings for the health care system. The threshold, therefore, is most unlikely to be set at that level, and the government, if it chooses to persist with this proposal, will have to go much lower, gathering into its net as many of the already over-burdened middle classes as possible.
The income threshold at which a family ceases to be eligible for the social security cheque called children’s allowance is just Lm10,000 a year. This covers the combined income of both parents, which means that thousands of families were wiped off the eligibility list when the rules first came into force, and that thousands more have since been removed when mothers got jobs as their children grew older, and fathers worked harder or got promoted. Yet what is a gross household income of Lm10,000 a year in today’s terms? It just about keeps people surviving, but it is not enough to give them a life or to keep them from living in constant fear of the wolves at the door. Once income tax and national insurance have been deducted, the family is left with around Lm650 a month to live on: to buy food, clothing and household requirements, to pay their water, electricity and telephone bills, to honour their monthly loan repayments for their home and their car, to set money aside for emergencies like household repairs, to buy petrol and pay their car insurance. And, if these embryonic government proposals take shape, to pay their all their medical bills.
For reason dictates that, if families with a gross income of Lm10,000 a year are considered not to need a social security cheque for children’s allowance, then this is the level at which they will be considered not to need “free” medical care. The government cannot set tiers of those who are deserving and those who are not: an income of Lm10,000 gets you free medical care but no children’s allowance; an income of Lm12,000 and you’re on your own, Jack. So there will obviously have to be some kind of revolution by all those families who are staying alive on what is left of their Lm10,000 after the Commissioner of Inland Revenue has taken his due.
It is a little Polly-Annaish of the Health Minister to suggest, as he did in a newspaper article last Friday, that the VAT lesson has been learned, and that unpopular reforms, if implemented early on in the government’s term of office, will not result in the deposition with relish of those who have implemented them. There is a difference between opposition to a tax which makes it more difficult to avoid declaring one’s true income, but which is in use virtually the world over, and the resentment that will be caused by making life even harder and more financially frightening and uncertain for those families who are already struggling.
The Health Minister is comfortably off, as are most of his colleagues on the Cabinet benches. Being comfortably off is indeed now a prerequisite for the foray into politics, because all the campaigning and spending required to get there means that the politician, or would-be politician, is not fighting to support a family of five or six - which is the average size nowadays after the fashion for two children, five years apart, of the late 1970s and 1980s - on a net income of around Lm7,000 a year. If he were, then his wife or partner would be justified in edging him up against the kitchen wall with her hand firmly around his tie, and saying: “Look here, buster - shouldn’t getting elected be a little lower down on your agenda? The children need new shoes, and I barely have enough to cover the grocery bills.” I say “he” deliberately, because I haven’t failed to notice that, in line with this very argument, the women in politics are either supported by husbands with a considerable income or, if they do earn money of their own, share the burden of providing for the household with a husband who also earns. Only Marie Louise Coleiro seems to be going it alone with a child, which is probably the reason why she is always at the forefront of these battles. She knows what it’s like; the others do not.
It is very difficult for the men in Cabinet who will be discussing these proposals on ending “free” health care to thousands to understand the prospective impact of their decisions on the lives of others. They do not have the experience, and perhaps they have by now also lost touch with others who are going through the nightmare of survival, and the even greater nightmare of wondering what will become of them all in the years to come, now that their income, so much reduced by forced expenditure, is not enough to put money aside. Because I am at that stage in life where I am still raising a family and so mix with others who are raising families of their own, I know many of these people. Both mother and father work, there are three or four children of school age, and by the end of the year they find that their overdraft is even bigger than it was 12 months earlier - forget savings or putting money away.
There will be politicians who suggest that these people should take their children out of private schools and put them into the State system, that they should use the bus instead of buying and running a car, and that they should sell their homes and move to a four-room apartment in a rundown area. And this, of course, is the true source of resentment, which our politicians have failed to identify, among the hard-put-upon middle classes. When both parents work hard at jobs that are considered well paid by Maltese standards, they don’t expect to have burgeoning overdrafts just because they have a comfortable home, two cars and pay school fees for their three children because the State schools cannot be countenanced as an alternative. They look at people working in the same jobs and careers in that land of milk and honey called Europe, and see how much more they earn and how much higher their standard of living is, and they seethe at being told that they have been targeted for further milking and financial pressure by their government.
There is another argument that anybody with a sense of decency and fair play should use against this suggestion of making “free” medical care unavailable to the middle classes. To these middle classes, it is not free at all, because they are the very ones who are paying for it. In effect, what the Health Minister has suggested is that those who are paying for the health care system are not entitled to use it, but those who are not paying anything towards it, or at least very little, should have full access. While the Health Minister’s views are in line with the concept of the Welfare State, they are completely at odds with the parallel concept of health insurance. Health insurance, which was originally encompassed in the catch-all “national insurance”, is there to ensure access to free health care, just as it is when paid to a private agency. The Minister’s suggestion turns this on its head by declaring that, where national insurance payments are made by those earning in excess of, say, Lm10,000 a year, then the insured parties are not considered to be the persons making the payments and their dependents, but completely unrelated people earning less than Lm10,000 a year, most of whom are already making national insurance payments of their own. The proposals on the health ministry’s table are much like an insurance company refusing to honour a claim made by somebody who pays them a premium of Lm900 a year, on the grounds that he is well off enough to pay himself for the replacement of his lost or stolen property: “Sorry, sir, but we’ve used your premium to pay other people instead.”
If the government does press ahead with these new rules of play, then it will have to come up with a different name for national insurance payments. People my age and younger are already being prepared for the real possibility that, when we are 61, we may have to fend for ourselves and not expect a State pension. Now it is being suggested that a great swathe of the population will have to pay for the medical care they have already paid national insurance for. This makes redundant the very concept of national insurance: that people pay it to ensure they are covered for medical care and that they will receive a pension when they are too old to work. If we are now being told that those who pay the highest levels of national insurance are only doing so to provide free medical care for others, and that they will get nothing themselves, then national insurance has effectively been shoved into the same category as Maltese income tax: tithes paid with no entitlement to specific benefits in return.
The government cannot in all conscience implement its proposals to make those who pay thousands of liri in national insurance pay again for using State health care, besides striking the fear of a ruinous old age into them so that they also find themselves fighting to afford a private pension plan. If the government insists on doing so, then it should at least be honest about it and stop calling national insurance by that name. It can continue to collect the money, but it will have to call it income tax instead. The only reason the government will be reluctant to do this is that our top income tax rate of 35 per cent allows them to boast that Malta has one of the lowest income tax top rates in Europe. Calling national insurance by the name it deserves - “more income tax” - will push our tax rate up to 40 per cent - 45 per cent of income, putting us on a par with the Scandinavian countries, where they get so much more in return from the State. We don’t even have roads worthy of the name or decent schools, and now they want people to pay for the medical care that has already been paid for through national insurance. How politically naive, and socially unaware, are the politicians who believe that there will be no revolt, the culmination of a good deal of discontent, if this proposal goes through.
Isn’t it a little insulting to expect us to accept a situation where “free” medical care for all is classified as untenable and unsustainable, but where the drydocks, which cost as much if not more, are classified as essential to the Maltese economy and a justified drain on public funds? The politicians can’t expect the people to accept a situation in which they are forced to pay yet again for State health care, so that the money they have already paid through national insurance can go towards keeping the drydocks afloat. That’s too absurd. Even those who can afford to pay for treatment at St Luke’s (after all, they already pay for treatment at private hospitals) are going to object on principle. They may not use the State health care system, but the minute they are told that they are not entitled to use it they will become enraged. They may pay a gym membership and never go to the gym, but they are obviously going to be very annoyed if they are told they will have to continue paying their membership, but another person - more deserving and unable to pay the fees - will be permitted to use the gym instead.
These people accept a situation in which the more they earn, the more they have to pay so as to support others who do not earn as much. But they only do so on the understanding that they, too, will get something in return. If the argument that they should be denied access to State health care, unless it is against fee-payment, is accepted, then this is just the thin end of the wedge, for the same argument can be applied to State schools and to university education. These people, remember, are already reducing the burden on State education by paying for private schools, but there is a difference between feeling you are doing it through choice and being forced to do it. If the people the government classifies as well off were really that well off by European standards, they wouldn’t mind so much. But they are not - that’s just the point. And they resent the fact that the
government thinks of them as a mass of faceless creatures who are there to be plundered for funds.