The 2019 budget should cater for a livable pension
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