The 2019 bud­get should cater for a liv­able pen­sion

Stabroek News Sunday - - REGIONAL NEWS -

Dear Edi­tor, Our pen­sion­ers who have given yeo­man ser­vice to this coun­try are now be­ing paid a pen­sion of $19,500 per month. I am mo­ti­vated to write on the pen­sion be­ing paid to cit­i­zens 65 years and older, with the view that the gov­ern­men­tal au­thor­i­ties will do a mean­ing­ful re­view of this pen­sion for the 2019 Bud­get.

Un­der this Ad­min­is­tra­tion, in Septem­ber 2015 it was $17,000 and in year 2018 it had in­creased by $2,500 to $19,500. It can be ar­gued that over the three years, there was a 15 per­cent in­crease, how­ever is this a sig­nif­i­cant in­crease to the pen­sion­ers? Yes the govern­ment has been work­ing to­wards cre­at­ing an environment which is sup­port­ive of so­cio-eco­nomic de­vel­op­ment with the ob­jec­tive of en­sur­ing a ‘good life’ for all.

If we are striv­ing for a ‘good life’ for all, cer­tainly the pen­sion be­ing paid is in­suf­fi­cient and should be ad­dressed as a ma­jor pri­or­ity. This pen­sion, like other pen­sions glob­ally, should be at a min­i­mum amount for the pen­sioner to live com­fort­ably, and it is ex­pected that it will be sub­si­dized by the pen­sioner in the form of sav­ings, con­tri­bu­tions by rel­a­tives, re­mit­tances from overseas, etc. in or­der to meet a liv­able amount.

Pen­sions are not in­creased in an ob­jec­tive man­ner. Each year it is in­creased by an in­cre­men­tal per­cent­age, and this is known in the fi­nan­cial lit­er­a­ture as In­cre­men­tal Bud­get­ing. It is the view that Zero-Based Bud­get­ing should be ap­plied to de­ter­mine a liv­able pen­sion. In so do­ing in keep­ing with best prac­tices, it should be ad­dressed up­wardly each time a new bud­get is for­mu­lated. The way for­ward is to do a Means Test, whereby on a monthly ba­sis, an es­ti­mated amount is re­quired, for ex­am­ple for food, trans­porta­tion, med­i­cal, util­i­ties, ac­com­mo­da­tion. An es­ti­mated min­i­mum monthly amount should be ap­prox­i­mately $30,000 of which the ma­jor ex­pen­di­ture will be med­i­cal, food and trans­porta­tion. A re­duc­tion in the monthly wa­ter rate from 1 Oc­to­ber is noted. That be­ing said, the de­ci­sion makers will be un­able to meet this amount in 2019 due to in­suf­fi­cient funds for this fi­nan­cial ac­tiv­ity, and this is un­der­stand­able. Hence, the way for­ward, is to at­tain this $30,000 over a two-year pe­riod, as­sum­ing that there is not a sig­nif­i­cant in­crease in the price in­dices for food, trans­porta­tion, etc.

When one looks at the up­per lev­els of pen­sions be­ing paid of over one mil­lion dol­lars per month why pay the low­est level such a mea­gre amount? We must move away from this in­cre­men­tal ap­proach and do a Means Test to de­ter­mine a liv­able pen­sion each year.

It would be fail­ing on my part if I do not men­tion the com­mence­ment of the pen­sion­able age of 65 years. Ac­cord­ing to the lat­est World Health Or­gan­i­sa­tion data, Life Ex­pectancy in Guyana is 63.6 years for a male and 69 years for a fe­male, a to­tal av­er­age life ex­pectancy of 66 years. Guyana was ranked at 130 in 2017, in 2018 its rank­ing is now 135.

It is the ex­pec­ta­tion that the au­thor­i­ties should have an early re­view on the life ex­pectancy and to con­sider low­er­ing the pen­sion­able age per­haps to 63 years, based on the au­then­tic global sta­tis­tics.

Af­ter all, our pen­sion­ers also de­serve a ‘good life’ and time is run­ning out.

Yours faith­fully, John Seeram

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