From Ing. A. Galea

Last week, a press conference held by Mr D. Spiteri Gingell, who heads the Pensions Working Group in the Office of the Prime Minister, gave the various results of surveys and proposals on pensions’ sustainability. During this press conference the efforts to convince the general public that the pensions system is no longer feasible and needs to be complemented by private insurance were given a further push. We were presented with some percentages, which show that although the public is reluctant to fork out more money it accepts that there is an issue. Great, the brainwashing has started working, yet no-one bothered to ask the same people whether they understood why the system is no longer feasible.

Wonder of wonders, we suddenly found out that especially the younger generation, including those with a tertiary level education, is managing to save little or nothing of their wage. Maybe we need another working group to discover the reasons. Not really. The reasons are obvious to this age group but are still disregarded by the generation that is making decisions for us. The present generation that is leading the country has, by and large, benefited from past government subsidies on housing and plots of land, and is therefore leading a comfortable life with minimum, if any, loan burdens. Additionally, this generation has drained the country’s social security finances by giving away all sorts of social benefits to guarantee the much-required votes for the next legislation.

Who is carrying the burden of all this? The younger generation and those still to come. Why? Because for a minimum flat or maisonette one has to pay incredible prices, which means having to apply for a stiff loan together with obligatory life and house insurance. Because the older generation has suddenly realised that they have wasted precious land resources! Just this normally means paying an average of Lm200 per month, which does not include the expense of furnishing the house. Renting a furnished place is not much better. On top of this add a minimum of Lm70 per month for the cheapest car and private health insurance. Daily living expenses, fuel, rental of basic services and maintenance can easily leave you short of another Lm200 per month, without enjoying the sort of fancy lifestyle some people are trying to project. Unfortunately, I am not the one to give any estimates of the expenses involved when children are brought in to this world, as we have not arrived at that stage yet. Anyone with minimum intelligence can easily deduce that the mentioned expenses are only those that can be foreseen and planned, the rest has to be paid from what remains of an average wage.

To add insult to injury, even though we still have to keep financing an inefficient public service through our taxes, and a social security system that we will, in all probability, not benefit from, the working group’s main solution (apart from raising the pensionable age) has been to propose the introduction of private pension schemes. All this in spite of the fact that the average wage earner together with his employer pays over Lm1000 a year in National Insurance contributions. Everybody should be made aware that a private pension scheme is no guarantee since private companies don’t specify what amount the maturity sum will be since profit on the investment fluctuates with the market. Such cases have already happened with a lot of people taking out life insurance schemes about 10 years ago with very interesting maturity estimates, which now have plummeted drastically because of lower interest rates.

Comments by Mr Spiteri Gingell such as “giving up that evening out to save something for the future” insult our intelligence and is definitely something we can do without. It just projects a poor and unprofessional image of the working group.

On the other hand we have government after government draining our N.I. contributions to finance vote catching schemes for people who have never and will never give anything back to the country’s coffers, rather than managing or investing them. And year after year we will have irresponsible politicians loading us with additional financial burdens without giving any guarantees, except that when they retire they will benefit from a privileged pension scheme they have formulated for themselves. For those who are not yet in the know, leaders of the opposition and members of the government holding office for at least two legislations are entitled to a pension with better conditions that mine or yours. In fact this is one of the few issues that both sides of parliament agree perfectly on.

Alexander Galea

DINGLI