Averting crisis

PM Mottley says pension changes needed to avoid catastrophe By Kimberley Cummins With Barbados’ population declining by more than 5 600 in the past decade, Prime Minister Mia Mottley said the Government’s decision to increase the pensionable age was a move to avoid catastrophe. Speaking on the National Insurance and Social Security (Amendment) Bill, 2023 in the House of Assembly on Friday, Mottley said the number of people making contributions to support pensions had significantly diminished. She said her administration had to step in as the country was trotting its way to a crisis which could easily lead to a catastrophe. Though saying she recognised the changes may cause some discomfort for citizens, Mottley said she was satisfied that at the crux of her Government’s decision was “placing the country first”. “When a child is growing, the child has growing pains. They call them growing pains for a reason, because when you move from one state to another there will be adjustments and there will be some pain. But what we know is that growth is part of the path of progress. And similarly, here, what we know is that if we don’t fix this . . . somewhere between 2034 and 2041, this country would have a date with destiny,” she said. “We have done too much to stabilise Barbados to leave it with an underbelly that is potentially cancerous. Having saved the country in one respect and saved the value of the dollar, and saved people’s quality of life for now, we [can’t] leave them in the middle of the train track for the train to come and crush them.” The changes announced include increasing the pensionable age from 67 to 67 1/2 years in 2028, and further to 68 years in 2034. Additionally, the number of contributions required to be eligible for pension will increase from 500 weeks to 750 weeks. Noting the decrease in the population – down from 277 821 in the 2010 census to 269 090 in the 2020 census – the Prime Minister said this was particularly worrisome because, with the death rate outstripping the live birth rate, there would be more challenges for the National Insurance Fund. She said that based on the figures gathered by the 2020 census in collaboration with the National Population Commission, which will be soon published in a report, the number of live births dropped from 2 874 in 2015 to the current 2 274. Annual deaths increased from 2 538 to 3 349 during the same period. “So, the decline that we are seeing in live births and the increase that we have been seeing in actual deaths, in the decade between 2010 and 2020 and continuing into this third decade of the 21st century, has now given us our worst nightmare – that our population has actually started to decline,” Mottley said. “In the 1950s, Barbados had a population of 200 000; 73 years ago. Belize and the Bahamas had populations then of 80 000 each roughly. Belize and the Bahamas today have populations of 400 000. There was a time when Barbados’ per capita income easily outstripped all of the others, but the dwindling nature of the population, the dwindling productive base, the dwindling tax-paying base, the dwindling capacity to add value in the country is now undermining our quality of life and what we would wish for our people in terms of the suite of measures that we enjoy from birth until death. “We should be conscious to remember that if we don’t intervene, we will reap what we sow. Now, in this particular instance, this is a much larger issue than just simply social security. . .  and this Parliament will have to discuss it in its broadest terms going forward, because as a nation we need to explain to our people the consequences of taking no action,” the PM added. (KC) ]]>