The Malta Independent 19 April 2024, Friday
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If the economy is so good, why is there a problem with pensions? – PN spokesman

Andrea Caruana Sunday, 31 March 2024, 08:30 Last update: about 18 days ago

In an interview with The Malta Independent on Sunday, Ivan Bartolo, PN spokesman on housing and pensions, says that if the government’s words on how strong the economy is are true, then why is there a problem with the pensions system as we know it?

How did you interpret what Dr Falzon said on 6 March regarding pensions?

In the first place, during Dr Joseph Muscat’s legislature, when the Maltese aired their grievances on the great influx of foreign workers, Muscat had said that we depend on the N.I payments of the foreigners for our pensions and, furthermore, the influx of foreign workers guaranteed our pensions.

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So, the influx carried on, meaning contributions to the N.I increased and it was even announced how Malta’s economy was one of the best in the world. That said, Dr Falzon made it sound like a private pension is obligatory or at least we are heading that way.

With such a good economy, I question what’s the problem with pensions then? Where are my contributions going? It is as though I spend years saving up for a house and upon concluding the payments, I find out it has been sold to someone else.

Specifically, how does the economy affect pensions?

I agree with Dr Falzon regarding low birth rate and aging population. But we must not forget that the economic model of cheap labour didn’t work. Pensions remained unstable. A new economic model must be drafted.

PL claims we never raised pensions, but I disagree. The only time pensions were truly frozen was under Mintoff between 1982 and 1987. The PN government did not increase pensions directly, however by its increase in the COLA it raised pensions by 284%.

In comparison to the current government’s direct increase in pensions, with reference to the 15 increase, around 12 is actually COLA meaning the true amount the pension was increased was by around 3. Ultimately, the direct raises by percentage is a play with numbers and makes the change look more attractive.

It is important to mention that under a PN government, that raised the COLA, despite inflation, pensions’ increases were three times higher than the cost of living.

It is also important to mention all the social initiatives PN government introduced such as free handymen, meals on wheels. We are most proud of our scheme that allowed us to keep the elderly in the workforce even after their retirement age, earn money but also receive their pension.

With regards to the 1961 anomaly, PL government not only swept it under the carpet but slept on it. When you take a stand in politics you can’t please everyone; this is even worse with regards to pension reforms which are a double-edged sword. But we took a stand.

Most ironically, the anomaly was set to be fixed by our electoral programme in 2013 but PL government took over. We made the way and they simply followed. Furthermore, when PN tried to deal with the 1961 anomaly we set up the 5-yearly strategic review and though the Labour government still adheres to it they fail to mention the anomaly.

Now, with the wanton spending of government it is too late to fix it.

Regarding such economic uncertainties, would you say the social welfare state, historically championed by the Labour Party is being undermined?

The welfare state began well and strong under Mintoff when he put all the pensions in one account, from which all pensions were taken, and cut service and retirement pensions with the motto “everyone has one pension”. That said we cannot overlook certain abuses, for example, social accommodation run by nepotism. And it continues to this day, with reference to the Ta’ Paris estate. Though built by a PN government the apartments were distributed unfairly by the PL government.

The principle of a welfare state, in my opinion, is best exemplified by the elderly: a dignified life ensured by capital in hand. But this is not the case. The third phase of life is a disaster; medicines are out of stock, life-changing operations have long waiting lists and banks have tightened their belts so much that for an elderly person to withdraw their own money is an ordeal.

All the while, certain people have positions on multiple governmental boards and comedians are brought to Malta for exorbitant fees. Less waste of capital and its injection into where the country needs it is crucial. In a nutshell, would one go on several holidays abroad whilst their home is in shambles?

As things stand, this is not the welfare state I believe in. Enough with the flashy mottos, we need consistency. In politics we must follow through on what we say.   

Do you think it’s unethical to ask foreign workers to pay the full N.I when the likelihood is they won’t enjoy a pension in Malta?

In the first place, bilateral agreements with countries of origin do exist by which foreigners working in Malta and paying their N.I will be given a pension even if they go back home.

That said, keeping in mind the fact that these foreigners give up nearly everything to come to Malta, an alleged land of milk and honey, they face terrible poverty and abuse. Indeed PN and the government agree on stopping this abuse.

That said, the government must be more pro-active in this matter.

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