The Maltese trust their banks, but they fear for their jobs

James Debono
Never mind Lehman Brothers going belly-up, or the nationalisation of Fannie Mae and Freddie Mac. The Maltese have a bigger thorn in their sides, and that’s the hike in utility bills and widespread job insecurity.
Despite the collapse of major financial institutions, public trust in Maltese banks remains high but doubts are emerging on the sustainability of the property market.
The MaltaToday survey assessing public concerns and perceptions of the economy on the eve of Budget 2009 and in the aftermath of the global credit crunch, reveals that only 7% consider the financial crisis as their major concern.
But a staggering 63.7% say the announced hike in utility bills are their biggest worry. This is the first time in a MaltaToday survey that another issue surpasses the cost of living as the greatest concern of citizens.
Concern on utility bills has now jumped dramatically from 17.3% in June to 63.7% – a reflection of the climate of uncertainty created by the new tariffs issued on Tuesday.
Concern on the new bills is highest among skilled workers and those in clerical and vocational grades, a clear indication that the lower-middle class is the most apprehensive about the new tariffs.
Among the self-employed, concern on the new tariffs is also accompanied by concern on petrol and diesel prices.
The only non-economic issue mentioned in the survey are the environment and irregular migration. The environment is only a major concern among the top economic bracket. On the other hand, concern on migration pervades the other socio-economic groups.
Yet overall when compared to June, Maltese society seems more concerned with financial and economic issues, rather than with quality of life issues.

The job threat
The bleak outlook emerging from the survey is underlined by the fact that 46.6% feel their family’s livelihood is under threat.
And surprisingly, the most threatened category are the self-employed. Among this category 66% feel their livelihood is threatened.
Only 23% of those in professional or administrative jobs feel threatened.
Unsurprisingly, public sector employees feel less threatened than those in the private sector. While 33% of public sector employees think their jobs are threatened, 47% of private sector employees think likewise.

Shelter from the storm
Maltese banks seem to be immune from the loss of trust experienced by global banking institutions. Only 12% have lost their trust in local banks and only 9% think their deposits in Maltese banks are not secure.
Although the collapse of Lehman Brothers had a marginal impact on Bank of Valletta, the crisis seems to have largely bypassed Maltese banks. While stressing that Maltese banks face no liquidity or solvency problems, to put people’s minds at rest the Maltese government also increased the minimum deposit guarantee of Maltese depositors to €100,000. HSBC itself injected £750 million in its UK subsidiary’s capital base.
These measures seem to have worked as few people fear their savings are in danger.

The property market
Although the current global crisis owes its origin to American retail banks dishing out property loans without sufficient guarantees, 27% of Maltese respondents still regard property as the best investment possible.
Less than 1% of respondents mentioned productive investments in businesses or industry. On the other hand 13% think that bank savings are the best investment –another indication that Maltese banks have weathered the storm.
Although compared to other investments, the property market is still considered more lucrative than other investments, and most people think that it is not wise to invest in property at the moment.
While 39% think that the climate is right for property investments, 47% disagree.
And although 36% say property prices are going upwards, a significant 32% think that property prices are going down. A further 26% think that property prices are stable.
The notion of falling property prices seemed unthinkable until a few months ago when everyone was concerned with the negative social impact of rising property prices. The fact that nearly two-thirds think prices are either falling or have stabilised indicates that the oversupply of property is finally having an impact on market prices.
But while falling prices are good news for new buyers, people who are already paying a mortgage will also see the value of their homes falling.

Methodology
A total of 431 people were randomly chosen from the telephone directory with 300 accepting to be interviewed between Monday and Wednesday. The results were weighed according to the age and sex distribution of the population. The survey has a margin of error of +/-5.7%.

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