Over the last 10 years, much has been said regarding pension reform. And now the PN government has been bold enough to take a decision, based on consultation and on all the reports that have been produced over the years, and has put forward a concrete proposal.
The government could have shirked the responsibility and continued to procrastinate, saying that the timing is not right, but the government recognises its responsibility towards future generations. It acknowledges the fact that demographic changes are taking place. The birth rate has decreased drastically while people are living longer.
With the current pension system, it is revenue from NI contributions that pays pensions, apart from other social services. In 2000 there were four workers for every pensioner but if no action is taken by 2025 there will be only two workers for every pensioner.
The government has therefore taken full responsibility for ensuring that future pensioners will have an adequate pension and a pension system which will be sustainable.
The PN government has been intelligent and did not treat the issue in a partisan manner but recognised that it is a socio-economic issue concerning all of society. In fact, consultation was carried out with civil society at large: the employers, the unions and the self-employed, current pensioners and future ones. Young people, who are the ones most affected, also had the opportunity to make their voices heard. Each sector had its proposals and now the government has analysed each and every proposal and come up with a reform in the best interests of the country and society.
The government is proposing a gradual increase in the retirement age. However, those who are not going to be able to work until that age have not been forgotten. People who have manual or stressful jobs will have the opportunity of retraining, while those who have to retire earlier due to illness can be addressed through the reform in the Invalidity Pension that the government introduced earlier this year.
Therefore a process of reforms is being carried out so that employees are motivated to stay longer in the workforce.
The government has also promised to address those who continue with their studies, thus being unable to accumulate forty years of contributions. This issue will be tackled in the next budget.
As a parent I cannot help expressing my satisfaction at what is being proposed with regard to parents who take a career break to take care of their children.
Parents will be given up to two years credit for every child and up to four years for every disabled child. Parents who can benefit are those who cease their gainful occupation before the child is six years old, or 10 in the case of a disabled child, and return to their occupation before retirement age for a period at least equivalent to that accredited. This reform is applicable to both the employed and the self-employed, thus eliminating any discrimination.
Other issues that are being addressed in the proposal are the Second and Third Pension. Until the 1970s, certain categories had a private pension but the Mintoff administration put an end to this. For the Labour administration, such schemes would have been regarded as discriminatory. Instead of encouraging people to improve their situation, they reduced the level of those who were already enjoying such benefits.
After all, what’s wrong with having another pension? In my parents’ time everybody prepared for the future. But for those who, like me, were brought up under Labour administrations, the message we received was very different.
And what is the MLP saying today about the reform? The MLP thinks that it is not the right time to carry it out and they would rather leave it for future governments to introduce. The MLP is saying that they would revoke the gradual increase in retirement age. The MLP is saying that they would look at the problem holistically. They are also saying that they will start the consultation process again before coming up with any proposals.
I am not surprised at this reaction, because every time the government comes up with a proposal for any reform, the MLP say that it is not the right time. But they never tell us what they would do if they were in Govern-ment. I sometimes feel that we are not all living in the same country, as that is what the government has been and is committed to continue doing – looking at the problem and addressing it in a holistic manner.
Contrary to the MLP, the government is not only proposing a reform but it is committing itself to reviewing the system every five years. I do not think I need to comment any further as to who is actually committed to the people.
Michelle Mallia is president of the Nationalist Party Women’s Movement