The Communist Party of Malta proposals on Pension reform

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The Communist Party of Malta appeals the general public to study and analyse closely what is being proposed with regards to the pension reform.

“The fact that the report on pension reform was prepared by a private entity does not augur well that pensions will remain guaranteed by the State. If this was not so, private consultants would not have been engaged to prepare the report”.

“Neo liberal Governments are trying to make us believe that the pension crisis is blamed on longer life spans, but this is only a myth. The real problem to the lack of funds for an adequate pension scheme is due to the bankruptcy of the neo liberal economic fiscal policies, which brought about precarious employment.

The Communist Party of Malta notes that the European Governments, amongst them the Maltese Government are not willing to sustain policies on social justice.

The fact the Nationalist Government is going to bring in the private sector to administer the second compulsory pillar scheme is a clear indication that the State wants to abdicate from the Social responsibility. This is the same method used by Margaret Thatcher Administration in UK back in the 1970’s, which proved to be a failure.

The Communist Party of Malta believes that the real reforms should lead to actual solutions, whereby the State pension fund is increased by a specific generated income.

“The solutions recommended should not be of a burden on the workers. We suggest a minimal increase in social contributions, both by the workers and the employers. Increase in taxation on the financial and banking sector of 5% on the profits accumulated. More control on tax evasion should also be enforced. Companies with at least 20% of their payroll on part-time work should be subject to a ten percent increase in their employer’s social contribution, so to increase governments’ revenue through social contributions and to address the present abusive system of part-time work. Jobs created should be on a full-time basis, with job security and decent pay. While Family-friendly measures should be encouraged so to address the problem of low women participation rate.”

The solutions that are being proposed by the European Union Commission are regressive as these include the increase in retirement age up to 70 years, more austerity measures, privatization of public services and more cuts in social services.

The Communist Party of Malta appeals to the Left wing Parties and Movements in Malta to continue to militate in favour of a State guaranteed pension mechanism where the 40years contribution be reduced to 35 years. ‘Second compulsory pillar scheme’ or partly privatization of the system is not the solution, but a more just fiscal mechanism that ensures an adequate generated income for the State to sustain pensions and social services.