PM: Labour will always be against second pillar of pensions
The Labour Party will always be against the Second Pillar pension as proposed by the PN government in past years, Prime Minister and Labour leader Joseph Muscat said yesterday morning.
Speaking at Zebbug, Dr Muscat revisited the principles behind this year’s Budget and insisted it forms part of a carefully-planned series which first aimed at stabilising the economy and now is targeting sectors which could do with more help from the government.
This government has taken from no one, he said, and has given to everyone.
As regards pensions, today people pay in 10% of their earnings (bolla) while the employer pays a further 10%.
With the second pillar as proposed by the PN administration, each employee will pay in a further 4% of his salary while the employer pays in a further 4%.
This will then build up a fund which on the strength of the collected 14% that are set aside, will give a higher rate of pension.
But this would mean that an average worker will have his salary cut by a further €750 a year while a person on the minimum wage will have his salary cut by €350. Employers too will have to fork out more.
This will only mean, the prime minister said, that many will prefer to work unregistered and the black economy would grow.
Those on minimum wage have received an increase of between €4, €9 and even €15 a week.
The Opposition has raised hell just because some toiletries have increased by 2 cents. They would have retained the EcoTax but this proved to be very porous.
The government welcomes the discussion launched on Saturday that the minimum wage must be increased. This proposal will now be discussed by the political parties, the unions and the employers. If need be, the discussion could be widened to include COLA.
Malta is the first country in the EU with free childcare and the first country not just in the EU but also in the OECD countries where pensions are not taxed.
Dr Muscat urged his supporters to speak to people about the Budget’s benefits. Even Caritas has said that the Budget focuses on people who do not have unions acting on their behalf.
Such people, as those who had what is called ‘pensjoni tal-wens’ for taking care of a sick relative and not working outside the home, have now been given €35 a week.
Beginning his speech, Dr Muscat said that change was the reason people entrusted them with government. People must not forget that up till a short time ago they did not have free childcare, nor did first time buyers get €5000 from the government nor was Income Tax brought down to its present levels.
Much has been done in these three years but much remains to be done.
Yet people sometimes do not understand, as a man who grumbled he had been made to pay €2500 fine to regularise his house but then he could sell his house for €200,000.
A little-mentioned scheme in the Budget comes from a time, three years ago, in MarieLouise Coleiro Preca’s time as minister, when a scheme was launched whereby people who owed big sums of money to the government paid by means of property, after independent vetting.
A lot of time was lost: in 2000 a proposal was made to link Malta to Europe through a gas pipeline. Minister Josef Bonnici was all for it but he was overruled.
It was Lawrence Gonzi himself who came up with the Interconnector idea but when this government came to office, it found that there were no permits for this yet.