The editorial of The Sunday Times of Malta on October 15, ‘Missing links in the roadmap’, hit the nail on the head. It exposed the Finance Minister’s social agenda priorities, which exclude health and pensions, and identified his three major challenges, namely traffic, rent and the environment.
One would agree that these three issues are connected to the quality of life of citizens but it must be said that health and pensions are two very important pillars supporting the quality of life of all citizens, particularly the elderly and pensioners. It would appear there is some sort of hidden agenda behind the exclusion of health and pensions from the minister’s priorities.
For decades, politicians on both sides have shied away from committing themselves on both these ‘burning issues’ because of the risk to their political careers. In local political circles, health and pensions are considered skeletons in the cupboard, and the less you talk about them the better.
They are useful tools for election campaigns and budgets – to brainwash supporters with unsustainable promises and measures that sometimes fail to materialise. A case in point is the promise made by the minister in the 2017 Budget and during the election campaign: that pensions will be increased by €8 per week in two separate payments of €4, one with effect from January 1, 2018, and the other from January 1, 2019. Pensioners are entitled to know what happened to these promises.
This is one of the reasons why the minister failed to include health and pensions as major challenges.
He has passed the responsibility on to the members of the Pensions Strategy Group. Unashamedly, he pointed out that the parameters are not set by the government, and further, that indicators are showing we are no longer in the red zone but on amber turning to green.
It is not the Pensions Strategy Group but the government that is responsible and accountable for the progress or regress in health and pensions.
In local political circles, health and pensions are considered skeletons in the cupboard, and the less you talk about them the better
In fact, the indicators are still on a red light. The number of people at risk of poverty has reached 69,920, increasing from 16.3 to 16.5 per cent. In terms of the risk of poverty and social exclusion, the rate for the whole population increased by 2.3 per cent.
In the population aged 65 and above, the rate has increased from 23.7 per cent to 26.1 per cent. And in a two-person household where at least one of them is 65+, the rate has gone up from 27.9 per cent to 30.2 per cent, thus affecting 14,595 persons.
From the above statistics it is clear the red light is still on. Contrary to what the minister stated, it will only change to amber or green when income levels reach 60 per cent of the Equivalised Median Income for all vulnerable people, including pensioners.
The European Union has always declared that the sustainability and adequacy of pensions should be two faces of the same coin. It is very convenient for the minister to pass the buck to the Pension Strategy Group but he should note that while it took drastic measures to address the sustainability of the system, it completely ignored the adequacy dimension.
Right now, it is not in the interest of the minister to address the adequacy problem as this would involve considerable expenditure. The attention is all focused on the surplus, not on the thousands of pensioners who are at risk of poverty and social exclusion. Is this the real reason why the minister declared the light had turned to amber?
One of the problems created by the group to deal with the sustainability of the system is the discrimination that now exists between people born on or before December 31, 1961, and those born on or after January 1, 1962.
It is unfair on pensioners, who paid the proper rate of contribution when they were working, to change the goal posts and treat them differently on the basis of age. The changes carried out in the Maximum Pensionable Income by the reform means that the former category of pensioners are entitled to €50 per week less than those in the second category.
When these pensioners grow older, their purchasing power will be seriously affected and they will have problems in their quality of life.
Health and pensions are very important for the wellbeing and quality of life of members of our society. It was unfair of the minister to relegate these two social pillars. They should have been included along with his three other priorities.
Carmel Mallia is president of the Alliance of Pensioners Organisations.