By *Jomo Sanga Thomas
(“Plain Talk” Jan. 26, 2024)
Plain Talk joins the unions representing public sector workers in criticising the government’s decision to increase taxes as it announced changes to the National Insurance Services (NIS) pension system. These taxes, coupled with the proposed 10 to 15% contribution increase announced earlier this month by Finance Minister Camillo Gonsalves, will make life far more difficult for workers and their families.
Where are the working-class instincts of so-called progressives and veteran trade union leaders Burns Bonadie and Noel Jackson in light of the most recent assault? The simple answer is that the once vibrant “progressives” have thrown in their lot with the increasingly pro-business, anti-working people Gonsalves administration. Unionists Bonadie and Jackson have opted for government largesse while workers struggle harder to survive in these dismal economic times.
In a joint statement on Tuesday, the Public Service Union, the Police Welfare Association and St. Vincent and the Grenadines Teachers’ Union (SVGTU) said while they appreciate the need for reform and sound and appropriate measures to address the issue of NIS pension, they were “extremely aggrieved and disappointed at some of the proposed changes and the manner in which the Government of St. Vincent and the Grenadines went ahead and enacted burdensome changes to the NIS pension system coupled with multiple increases in taxes, all at the expense of workers and the general public”.
It’s strikingly alarming that with such a drastic change at the NIS, the government paid lip service to dialogue and union participation but went ahead and made changes without proper consultation and consensus with the workers’ representatives. It is truly a sign of the times that workers are taking this authoritarian assault without disruptive protest action.
In its 23 years in government, Gonsalves’ administration disregarded the unions and attempted to split and destroy union activism. The last collective agreement the government signed was in 2005. It later argued some of the provisions of the agreement were only aspirational.
The unions slammed the government’s actions, pointing to what they called “a palpable failure of the Government to address the financial difficulties of existing pensioners regarding the challenges, despite pensioners who have to survive on a significantly inadequate pension with no increase for over ten years despite high inflation”. In an earlier release, the unions noted that while inflation increased by 21% since 2005, pensions remained unchanged over the same period.
These proposed changes are clearly pauperising the workers, pensioners and those who depend on them. With the proposed increase in workers’ contributions to the NIS, workers are being economically devastated. Firstly, they are asked to give up more of their earned income to secure a poorly managed NIS. Consequently, they have less money to spend on their families at a time when the cost of living is rapidly rising. Secondly, workers may not live to benefit from their lifelong contributions to the NIS. The proposal is to have workers retire at 67 damages their quality of life. They have to work well into their senior years with little or no guarantee that they will benefit after retirement.
This is a sad reality, especially since the NIS reports indicate that the way the government spends and invests NIS money is geared toward shoring up its political standing and electoral fortunes rather than ensuring the sustainability of the pension scheme. There is the vexing issue of non-contributing pensions, where persons who never contributed to the NIS are collecting money, in some cases more than persons who worked and contributed.
The government’s refusal to pay over to the NIS its withholdings for state employees, borrowing millions from the NIS to pay off the outstanding withholdings, the purchase of the old Ju-C building for $7 million, which is now rotting away, the decision to build a $25 million NIS office, the $10 million spent to bribe young students who pass at least fice CXC subjects, the exorbitant 200 percent increase in management fees over the last three years, and the wilful misuse of the NIS money to build the hotel at Diamond all point to government’s reckless disregard for the financial stability and sustainability of the National Insurance Service.
The foregoing makes a telling case that supports the unions’ view that the government’s NIS policies are intended to solve the economic problems at the expense of the workers. It must be remembered that following retirement, workers must wait two years before collecting a pension. If financial conditions force some retirees to request “early” payment, they are massively penalised.
While all these pressures are placed on the workers of our country, big businesses and foreign investors receive honey-soaked tax concessions and other duty-free allowances. Corporate taxes have been lowered from 37 to 28%. This anti-worker leanings, which is also reflected at the labour department, prompted one foreign business executive to label Gonsalves the most pro-business working class leader she has ever met.
Plain Talk commends the unions for their commitment and assurance to the Vincentian workers regarding the “impact of the cabinet-approved reforms and increases in taxes and how they will affect the quality of life of all contributors and pensioners”.
However, the unions will only gain strength and respect when they step up their work to raise the trade union consciousness of their members. In doing so, they will avoid the troubling reality where workers in blind support of the government take positions that negatively impact their quality of life.
There is an additional point that workers and their leaders must bear in mind. The unions must seriously consider taking the pension issue to court if it is to beat back this government’s insistence on unilateral decision-making. The Constitution protects pension rights. Additionally, case law from the Eastern Caribbean Supreme Court says no government can make pension reform that places workers in a worse economic situation than before the changes.
This government needs to be brought to heel.
*Jomo Sanga Thomas is a lawyer, journalist, social commentator and a former senator and Speaker of the House of Assembly in St. Vincent and the Grenadines.
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