If The Times has been somewhat over-anxious to see further progress being made in the reform of the pension system, it is only because it has been taking good notice of the consistent prodding made in this direction by institutions and influential persons studying the health of the island’s public finances.

As editorials and write-ups on the subject over the past months amply show, this newspaper has not been unaware of the reforms that have already been introduced and of the provisions for review made in the law to ensure adequacy, and sustainability, but it did not seem the government was responding strongly enough to the calls for Malta to move on with the rest of the reforms. So, the Ministry of Education, Employment and the Family, whose ineptitude in the handling of EU student funds led to their suspension some time ago, does not need to get unduly worried over what its communication coordinator rashly described as the newspaper’s lack of knowledge of the reforms.

Maybe the Ministry had not neglected the issue, and the steps taken so far do not indicate that it had, but, clearly, this has not pacified, as it were, those, including the European Commission, who have their fingers on the pulse of the island’s public finances. These, too, must know of the relevant provisions for review made in the law but have nonetheless been stressing the urgency for Malta to move on with the rest of the reforms, that is, the second and third pillars. But the government did not, at least for a time, seem to share this sense of urgency, which is why this newspaper reacted favourably to the news that the World Bank has been roped in to study the pension system “to secure adequacy and retain sustainability”.

In fact, the Finance Minister had dismissed the urgency of “painful reforms”, reportedly saying: “These comments have appeared regularly in every report on Malta. They come as no surprise and it is not a matter of taking corrective measures in the next Budget.” However, on the basis of published reports, the European Commission does not seem to share such complacency. A number of financial analysts have also been of the view that Malta is running out of time.

The Commission, which has also stressed the need on the government’s part to work out a more robust financial planning and consolidate discipline in the implementation of annual budgets, has not stopped recommending that the island see to the carrying out of the rest of the reforms. Not only is the government dismissing the urgency, but it is actually seeing as the real challenge the adequacy of the pensions rather than the system’s financial sustainability.

Now, obviously, pensioners would be among the first to agree with this as, with the sharp rise in the cost of living, many can hardly cope with household running expenses. But what if the system becomes unsustainable? The two would surely have to go together. According to one study, made for the Today Public Policy Institute, expenditure on the two-thirds pensions alone would be equivalent to 43 per cent of all social security expenditure by 2015.

When it reacted to our last editorial, the ministry confirmed that it intended presenting the pensions “strategic” (it used the word no fewer than six times in its letter) review, as required by law, before the end of 2010. Hopefully, the national momentum reached in the discussion will now lead to further progress.