Mottley says pension reform not intended to hurt but help all involved
By Marlon Madden
Prime Minister Mia Mottley is appealing to all members of the Social Partnership to fully support her administration’s controversial proposed pension reforms.
She said on Friday that if the private sector and labour movement worked with the Government on the issue, it would be a win for all involved.
“We win when we do it together; not government alone, not private sector alone, not the labour movement alone but when we come together we always win,” said Mottley as she addressed a ceremony at the Lloyd Erskine Sandiford Centre at which the Development Bank of Latin America and the Caribbean (CAF) released its flagship report on Economic Development – Inherited Inequalities.
“We did it when we were faced with the reduction in the value of our exchange rate as being the next necessary step to stabilise this economy when we won the government and it was in that room upstairs on the 1st of June 2018 that labour, capital and government came together and said, ‘we are going to fight this together to avoid an exchange rate evaluation’.
“We did it in this room again where we came together here and at the Hilton to deal with the COVID pandemic. I want to suggest that we can do it with the pension reform,” said Mottley.
The Prime Minister insisted that the proposed changes – which include increasing the pensionable age from 67 to 67 ½ years in 2028, and then to 68 in 2034; and increasing the number of contributions required to receive a pension from 500 to 750 – were not intended to hurt Barbadians but to preserve the country’s National Insurance Scheme (NIS).
“I hear all kinds of people speaking about it but let me remind us that fundamentally what we are doing is not because we want to hurt people. We are not reducing a single benefit but what we are trying to do is to ensure that benefits will be there when people most need them,” Mottley said.
Since Minister of Labour Colin Jordan announced the planned changes in a Ministerial Statement at the end of last month, there has been an outcry from some labour organisations, political parties and residents.
There is even a Leave We Lifeline Alone march planned for Saturday, organised by the Unity Workers’ Union and the Marcia Weekes Show, for Barbadians to show their opposition to the NIS reforms.
Government also announced that the age at which persons become eligible to receive a reduced pension will be adjusted from the current age of 60 to 61 in 2025, 62 years in 2028 and 63 years in 2031.
The private sector has also been calling on the Government to remove the tax on registered retired saving plans (RRSPs) but Minister in the Ministry of Finance Ryan Struaghn earlier this week indicated that the Mottley administration had no intention of reviewing its tax policy on pension due to the lowering of the corporation tax and personal income tax rates.
The Prime Minister endorsed that position on Friday.
“There has been no government that has reduced corporation taxes to as low as the corporation taxes that exist in Barbados today are. There is no government that has reduced income taxes as low as we have reduced it,” Mottley insisted.
She said the reforms should receive the full blessing of all three arms of the social partnership – government, labour and the private sector.
“When this country moves together across those three sectors, Barbados wins and Barbadians win. Let us therefore take heed. The very fact that this [CAF] report anchors and reflects the things that we have done well and continue to do well, tells us that if we drop the ball then we will not be part and parcel of that brigade that can say they have been able to turn the corner with respect to many of these structural defects and blockages that prevent families, individuals and companies from moving to the next level,” urged the Prime Minister.
