A review... at last

The Malta Chamber of Commerce and Enterprise welcomes the announcements by the Minister for the Family and Social Solidarity on invalidity pensions.

Minister Dolores Cristina was recently reported to have said that 8,800 so-called boarded-out "will have their case reviewed". On Wednesday in Parliament, she moved a Bill to reform invalidity pensions.

In October 2004, as part of its proposals for the 2005 budget, the Chamber had recommended a review of all boarded-out cases. The recommendation was for the review to be carried out by a specially-appointed commission. People who would eventually be found to have abused their rights to claim social security benefits would be called back to work and disciplined.

The proposal was made by the Chamber in view of the economic realities facing the country. The army of 8,800 boarded-out individuals were reported to receive Lm16 million of taxpayers' funds last year. Besides the enormous social injustice, this situation serves as a powerful disincentive to work on the part of all hard-working citizens.

This abuse increases the tax burden on law-abiding citizens in a direct and indirect fashion. It forces people to pay more taxes to make good for the artificially inflated social security bill. At the same time, it narrows the tax net, diminishing the number of taxpayers who share the country's total tax bill.

These boarded-out cases, coupled with early retirement schemes, have contributed to lowering Malta's effective retirement age. In view of the fact that Malta's foremost and only natural resource are its people, it is outrageous to allow a situation whereby people opt out of the formal labour market when they are still physically and mentally able to contribute to the country's economic well-being. In all cases, this situation is detrimental to the country's national competitiveness and its potential to accumulate wealth. This state of affairs is even more serious if the individual in question possesses a scarce skill or trade.

The above situation further aggravates the pensions predicament, particularly vis-à-vis the ever-decreasing workers/pensioners ratio.

The tax burden is increasing for a variety of reasons and this is eroding our competitiveness. We can ill-afford to continue undermining ourselves by paying more taxes to fund indiscipline and abuse - both from the fiscal and human resources points of view.

The Chamber welcomes the government's intention to introduce the system whereby invalidity pensions are issued for a definite period before becoming due for re-evaluation.

For several years, the economy has suffered from a general deficiency in accountability and enforcement. The Chamber is, therefore, encouraged by this latest indications that the government intends to boldly address abuse by those seeking exoneration from their duties on false medical grounds. Instances where the country allows the interest of the selfish few to prevail over the welfare of the many should not be allowed to continue.

The country needs bold action by the authorities based on the principles of justice and equity. Such actions will not be applauded by those who will find they can no longer avail themselves of free meals they had been accustomed to for many years but will certainly win the respect of the rest of us who, year in year out, finance this sorry state of affairs with their hard-earned income.

The Chamber maintains that the country has reached a stage whereby the tax-abiding public cannot and should not be made to finance the dishonesty of others.

The business community expects the government to implement these bold decisions to bring about a total clampdown on abuse and the defrauding of public coffers. The introduction of widespread electronic networks and applications within the public service will facilitate this task through an efficient use of the information collected and processed on the system.

The Chamber has long championed the need for stronger fiscal morality and has been a steadfast supporter of successive governments' efforts to fight benefit fraud.

The Chamber shall continue to support any initiatives aimed at enhancing competitiveness, increasing the gross domestic product and reducing social injustice.

Meanwhile, it appeals to all social partners to unite and ensure there is a concerted effort to resolve this problem.

Indeed, it appeals to the social partners to join forces with the Malta Chamber of Commerce and Enterprise to ensure that the country's competitiveness is enhanced, increasing the country's ability to generate wealth for the benefit of the entire nation.

These efforts cannot and should not be left to one party but can best be achieved through consensus and social dialogue.

Mr Borg is director general of the Malta Chamber of Commerce and Enterprise.