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Dalli promises priority on pension changes

Unpopular measures "necessary at this stage"

By Herman Grech

Times of Malta, April 30, 2003

It is not easy to convince people about the need for reform - John Dalli

Malta - John Dalli yesterday made it clear there was no time to waste with welfare reform and said he intended to take stock of the situation and map out a way forward by the end of May.

The Finance and Economic Services Minister said it was time to take decisions to defuse the pensions time bomb, which had lain shelved for several months.

"The earlier we start implementing changes the better, as this will cushion the impact," Mr Dalli told The Times in an interview.

The proportion of people aged over 60 was expected to grow from 16 per cent to 24 per cent by the year 2020. It is estimated that the pensionable age population will exceed 100,000 by 2025.

Private pensions would ease the financial burden on the government as well as guarantee a good standard of living in future, but this concept remained rather untapped in Malta.

But Mr Dalli made it clear that the sustainability of pensions was top of his agenda.

Mr Dalli questioned the effectiveness of the National Welfare Reform Commission, appointed by the government to analyse the situation on current and prospective pensions financing.

"We have wasted five years. Nothing much has happened, not even behind the scenes. The commission tried to do something but the interest groups stultified the process because they did not find a national basis to go forward."

The commission is made up of representatives of four ministries, the Attorney General's office and several constituted bodies.

The relationship between the commission and Mr Dalli was strained after its former chairman, Anthony Galdes, decided to step down in protest after Mr Dalli presented a number of social security reforms in his budget speech without consulting the commission.

Mr Dalli said he expected to take stock of the situation by the end of May, since the new chairman, Henry Degabriele has completed his studies.

In the meantime, the commission has discussed the issue with the Malta Council for Economic and Social Development.

He admitted that unpopular measures were necessary at this stage, although he said he could not give any details at present. However, he added that he did not believe that pensions should be cut in any manner or that the standard of living of the elderly should in any way be affected.

Mr Dalli said it was not easy to convince people about the need for reform, but he augured they would realise what they were getting in return. "Whoever knows what's happening in the country, realises the need for certain decisions to be taken," he said.