Delay in pension reform feared

The secretary general of the General Workers’ Union has expressed concern that the discussion on pensions is back to square one following the resignation of Anthony Galdes as Chairmain of the Commission for Welfare Reform.

Asked to comment on whether the GWU would consider the raising of the retirement age to 65 as one solution to the problem of Malta’s widening welfare gap, Tony Zarb pointed out that this was one issue due to be discussed in the commission.

"We are still awaiting the outcome of that comission’s discussions," he said. "But it will be much more difficult following the resignation of the chairman. I fear we could be back to square one."

When Mr Galdes resigned as Chairman of the Welfare Commission last December, there was speculation that his decision was down to a clash with Finance minister John Dalli, although this was denied.

"There are no personal clashes at all," Mr Galdes told this newspaper. "My resignation is not linked to any of this, it is of a personal nature."

However, it was widely recognised that the government was irked at the length of time it took for the commission to present its interim report. Moreover, the fact that the chairman’s proposals appeared to be moving away from the measures outlined in the budget did little to help improve relations between the government and the commission.

Asked whether the GWU accepted the Finance minister’s warning that the current pensions system was not sustainable, Mr Zarb said the union understood there could be problems in the future, but believed solutions could still be found.

"Our belief is that if we start working together, we think we can find a solution which is fair for everyone," he said.

Asked where the funds would come from, Mr Zarb pointed out that workers are making a substantial investment in the form of their contributions.

"Don’t forget workers are paying 1/12 of their wages in social benefits," he said.

On the subject of private pensions, Mr Zarb said that the GWU believes it is premature to discuss this issue.

"The GWU is not discussing private pensions at present, we believe it is still too early to comment on the issue," he said.