It is amazing how after four months of ‘intense’ internal discussions on pensions the Labour Party comes out with a proposal that is only aimed at postponing decision-making to after the next general election.
But what is laughable about the Labour Party’s stand is that it has not come out with its own blueprint of reforms. The only idea presented to the media last Saturday in a four-page document full of rhetoric is to kick start a fresh debate on pension reform in 2009 that will conclude in 2011; as if 10 years of discussions, documents, studies and consultations are not enough.
The truth of the matter is that Labour is scared to pronounce itself on pension reform knowing full-well that it can create electoral tremors. A four-page assignment bereft of ideas is hardly the stuff a government-in-waiting is expected to produce.
Why is the Labour Party failing to offer serious leadership on this issue? Whatever happened to the report MP Karl Chircop was assigned to prepare? Why did Alfred Sant sound so buoyant about his party’s ability of coming up with concrete proposals in just two months when interviewed by this newspaper on 15 March, only to produce a secondary school assignment instead four months later?
Government’s own proposal for pension reform is far from complete and is seriously lacking in many aspects but at least there is the willingness to confront the problem.
Alfred Sant’s declaration on Saturday that the pensions problem will only be with us in 2030 and so solutions can be postponed to a later date flies in the face of numerous studies undertaken over the years that clearly show how the pensions problem can start to bite hard into public finances as early as 2015.
Indeed, we have already seen the impact of a larger cohort of people reaching pensionable age as of this year. The problem will only get worse as the years trudge along. And even if the bigger problems may occur around 2030, solutions need to be put in place today with the flexibility of reviewing matters every few years.
It is easy for Alfred Sant to say that when pensions are taken on their own, revenue from national insurance contributions is more than adequate to cover the bigger expenditure on retirement pensions. But the truth of the matter is that N.I. contributions do not only finance retirement pensions but are simply poured into government’s kitty from where all social services are paid out. How will Alfred Sant finance the other social services if N.I. contributions are used solely to pay out retirement pensions?
It is fair to point out that government’s own proposal also fails to address this basic issue but the least we expected from a political party that continuously says it wants to offer the country a ‘better’ alternative government, was a ‘better’ proposal.
Instead we got no proposal at all, just a hypothetical date some time in the future when pension reform will start to be discussed once again.
As for the electoral commitment Alfred Sant said will be made by the MLP in the manifesto for the next general election, there is no indication that the commitment will include concrete proposals for pension reform.
We would hardly expect the MLP to include concrete proposals in a manifesto just weeks before a general election when it has failed to come up with some solutions of its own at this stage. A commitment to reform pensions without giving a broad idea of how, will be as good as blowing up a hot air balloon in a room full of needles. It will explode at a later stage risking further delay.
It is a pity that the Labour Party has chosen not to decide on pension reform. But it is also irresponsible to base the non-decision on the wrong premise that the country will start facing a pensions problem in 2030. Has the Labour Party parliamentary group and executive been gullible enough to swallow Alfred Sant’s long-standing belief that the country faces no immediate pension problem? Why has the party that believes in fast-tracks and getting things done with urgency delayed tackling the issue of reform in pensions?
Pensions are today’s problem not tomorrow’s. We can only hope that when government presents its bill in parliament, the Labour opposition will get down to business and suggest concrete changes to make the reform a just one, sustainable and fair to current and future generations.