Economist chastises Govt: Pensioners still getting a raw deal

PENSIONERS are getting the short end of the stick despite a Government resolution to increase their pensions by N$70 this financial year, the Institute for Public Policy Research says.

The IPPR’s Robin Sherbourne yesterday told parliamentarians that Government was in fact doing pensioners no favours by upping their pension, as it was still not commensurate with the cost of living. Sherbourne criticised Government for being arbitrary in deciding on when and by how much to increase pensions, saying if pensions had risen with average incomes in the country since Independence, pensioners should be getting in the region of N$420 a month.Should Parliament approve the current budgetary proposals, pensioners can expect to receive N$370 a month.”There is room for improvement.Pensions are not keeping in pace with inflation.Pensioners are growing poorer.Government has never given pensioners a real increase.They are always playing catch-up,” Sherbourne said at a budgetary analysis workshop for parliamentarians in Windhoek.He advised that Government should rather link pension increases to some type of index, be it the inflation rate, average income growth or a percentage of the GDP.The proposed increase, he said, would only give pensioners the same kind of purchasing power they had in 1990, when ‘black people’ received a pension of only N$92.Sherbourne said Government had created a trend of increasing pensions only to leave them at the same level for some years, before boosting them again to bring them in line with inflation instead of increasing them steadily in line with market changes.In response, Finance Permanent Secretary Calle Schlettwein said Government had to be careful not to get itself into a position where it could not sustain pensions at all, as had happened in some European countries.He said Government did not have systems in place that would allow it to only pay out State pensions to the very needy and to monitor which pensioners benefited from a private retirement scheme, as suggested by some.Sherbourne criticised Government for being arbitrary in deciding on when and by how much to increase pensions, saying if pensions had risen with average incomes in the country since Independence, pensioners should be getting in the region of N$420 a month.Should Parliament approve the current budgetary proposals, pensioners can expect to receive N$370 a month.”There is room for improvement.Pensions are not keeping in pace with inflation.Pensioners are growing poorer.Government has never given pensioners a real increase.They are always playing catch-up,” Sherbourne said at a budgetary analysis workshop for parliamentarians in Windhoek.He advised that Government should rather link pension increases to some type of index, be it the inflation rate, average income growth or a percentage of the GDP.The proposed increase, he said, would only give pensioners the same kind of purchasing power they had in 1990, when ‘black people’ received a pension of only N$92.Sherbourne said Government had created a trend of increasing pensions only to leave them at the same level for some years, before boosting them again to bring them in line with inflation instead of increasing them steadily in line with market changes. In response, Finance Permanent Secretary Calle Schlettwein said Government had to be careful not to get itself into a position where it could not sustain pensions at all, as had happened in some European countries.He said Government did not have systems in place that would allow it to only pay out State pensions to the very needy and to monitor which pensioners benefited from a private retirement scheme, as suggested by some.