The government proposal to introduce a guaranteed minimum pension to 76-year-olds next year and extend it to other age groups gradually is discriminatory and all pensioners at risk of poverty should get the raise as from next year, the Nationalist Party said today.
PN Deputy Leader Mario de Marco, social policy spokesperson Paula Mifsud Bonnici and spokesperson on the elderly Robert Cutajar also insisted that the proposed €30 increase – from €590 to €620 – was not enough.
Dr de Marco said the PN had presented a number of proposals on the pension reform and stressed that it should ensure the sustainability but also the adequacy of pensions. He questioned, however, which figures the government was resting on, seeing that one study said the Maltese population was decreasing while another said that it could increase to around €470,000 in the next three or four decades.
He also argued that, while third pillar pensions were a step in the right direction, even if not everyone could afford them, the government incentives had not done much to encourage people to move towards a private pension. The government should strengthen this sector, he said but it should also start discussing 2nd pillar pensions, or at least the effect that their introduction or lack thereof would have. “While we are sensitive to what employers are saying we believe the climate is right to at least kick off this debate.”
The PN Deputy Leader said one of the government proposals meant that those born after 1965 would only receive a pension if they had paid contributions for 41 years. In the case of people who started working at a later age this would effectively mean that their retirement age is being raised.
Dr de Marco said the government is proposing to introduce the Guaranteed Minimum Pension for 76-year-olds as from next year. He said, however, that 34% of the Maltese population is at risk of poverty, according to the National Statistics Office. This was higher than the average and the numbers were on the rise.
“The GMP should not be introduced in such a gradual and discriminatory manner. Let us see how we can avoid making a distinction and address the poverty issue,” he said.
Asked what the PN was proposing, Dr de Marco and Dr Mifsud Bonnici insisted that the government should at least include the pensioners who were at risk of poverty in next year’s introduction and speed up the staggering process for others. “There can be no excuse about a lack of funds. If the government managed to find €4.2 million for Café Premier, €3.2 million for Gaffarena and managed to increase its yearly spend by €475 million then it should also find the money to help poor pensioners.”
The PL promised to eradicate poverty in its electoral manifesto but poverty was on the rise, she said.
Dr Paula Mifsud Bonnici said the €30-a-month increase would not be enough. She also insisted that with the introduction of GMP as planned by the government, many of those at risk of poverty would remain at risk for a number of years, until their turn was up. When asked what the minimum amount should be, Dr Mifsud Bonnici said there were many methods to calculate what an adequate amount would be but could not give figures.
She also referred to a number of other government proposals, several of which the PN agreed with, but others needed fine tuning. One of these was the proposal to give accredited contributions to mothers who stopped working to raise their children. This was positive but the PN disagreed that the limit was set at three siblings. The government was resorting back to Mintoffian times and discriminating between children, she said.
PN MP Robert Cutajar said the Opposition was being proactive and had contributed widely to the pension reform debate, even through consultation with all stakeholders. He noted, however, that in the past the PL had been absent in the pensions debate. Mr Cutajar said there were several positive proposals in the government document, including the inclusion of people with more than one part-time job who worked more than 40 hours a week. He also called for more awareness on private pension schemes and said that, with the right attitude, these can be as successful as they are in other countries.
In reply, the government said that the Opposition is showing unnecessary negativity considering that the public and social partners had positive comments to make about the proposals.
The predictions made were based on the European Commission's criteria, and were agreed to by World Bank experts.
An EC report issued in May shows that Malta is likely to have the same increase in pension expenditure as Germany, a country that nobody says will collapse, as the PN is saying in Malta's case. The EC's assessment for Malta shows that predictions were among the most improved.
The government said the PN's declaration that 34% of the elderly are living in poverty is a gross mistake, considering that the latest statistics show this figure to be 14.9%. The PN also said that with €620 per month people would still be below the poverty line when it has been established that the poverty line is €605.
In another statement, the Labour Party said that the government is giving new rights to pensioners.