Retirement benefits

Saturday, 19 October 2019 00:01 -     - {{hitsCtrl.values.hits}}

Cabinet this week approved a generous retirement package for President Maithripala Sirisena, which includes his residence down Pajet Road, luxury vehicles and security. A clearly-irked Janatha Vimukthi Peramuna (JVP) criticised the move, pointing out that it amounted to as much as Rs. 800 million and questioned how public assets could be doled out in this manner by rulers. Retirement benefits should be common to all retirees, but it is unlikely that many members of the public will be getting such a rich reward for the work they have accomplished. 

Salaries, pensions and other perks for politicians always strike a nerve among the public for good reason. It is well known that there is little information available in the public domain of exactly how much a Member of Parliament (MP) earns, especially if they are Cabinet members. Asset declarations are sporadic at best and there is a vast discretionary area that politicians commonly operate in where they have the power to approve generous payouts to each other. 

For example, earlier this month a Rs. 21 billion supplementary estimate was presented to Parliament that included a Rs. 101 million bill to settle the taxes on two luxury vehicles that were being purchased for the use of the President. It is possible these are the vehicles President Sirisena will now take with him into retirement in November. At the time the supplementary estimate was slammed by some Parliamentarians who questioned whether a “spaceship” had been procured to cost the taxpayer so much money. 

This is just one instance when management of public finance has been thrown out of the window. The quid pro quo nature of such transactions do not stop at the top and filter down to every level of governance. Even cursory reading of Committee on Public Enterprises (COPE) reports for instance is enough to make citizens understand how much of public finance is lost through corruption, mismanagement and wastage. Some handouts are roundly defended as routine and President Sirisena follows a list of former presidents who have received houses, security, pensions and other perks on taxpayer dime. Pensions are needed, but it is time for the Sri Lankan State to at least ensure consistency and establish retirement benefits for presidents at a reasonable level.

Ethics of helping themselves to goodies at the cost of taxpayers aside, politicians as policymakers have a responsibility to ensure that Sri Lanka’s rapidly-ageing population also have access to pensions. But successive governments have failed in this task. According to World Bank estimates, by 2030, one in every five Sri Lankans will be over the age of 60. But Sri Lanka’s pension schemes have remained lopsided for decades. The public sector enjoy a non-contributory pension scheme with linked benefits while the private sector have minimal coverage. 

Informal workers face an even bigger challenge in Sri Lanka where wide swathes of the population are not covered by any form of pension or insurance scheme and often have to rely on their children for support. With a rapidly-ageing population, there are fewer people able to take on the responsibility of supporting the higher number of people who are being aged out of the workforce. For many Sri Lankans saving to build a house they can live in during retirement, even after working hard for a lifetime, is difficult. It is high time that Sri Lankan taxpayers stop supporting disproportionately cushy lifestyles for their leaders and demand that their representatives work responsibly for the public interest.