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Saturday, November 3, 2012


A case for John

I listened to Ms Alicia John’s argument (or case) for pensioners broadcast over Radio 100 on Monday morning (October 29) and I want to use the theoretical considerations outlined in Part One as context to give meaning to them in a crude way. But before I do so, permit me to “empathise” with her and the persons on whose behalf she spoke.

Firstly, the scenarios she painted underlined an obvious tension between the two principles outlined in part one, namely VVID and VVDD (and we will discuss this in Part #3).

In talking about the plight of pensioners, Ms John expressed a deep concern over their welfare. She claimed that while they may have property (land and house), they may not necessarily have wealth.

Indeed her logic may have been oversimplified and may sound somewhat “paradoxical”, but it does have a ring of truth to it.

There are overwhelming “anecdotal” data to support her argument that while many pensioners may have property, it is also true that they may also be “penniless”. Cases that immediately come to mind are sanitary workers and watchmen; and indeed, a few teachers, policemen, nurses and civil servants – all may fall in that category. There are reported cases that things have become so bad with some of these pensioners that they had to seek post-pension avenues of employment to survive, even when they have property.

The myth of retirement benefits

A popular myth is public servants upon retirement earn a pension and gratuity and therefore they have wealth. But this is only one side of an unbalanced mythical equation. In most cases - and in sharp contrasts to the gratuity and retirement bonanzas that Ministers of Government and top public servants walk away with - the gratuity that the public servants earn approaches peanuts and may not even be sufficient to pay out “outstanding bills” (including mortgage or car loan). The pension fares no better; in some cases, it might be so small that it might be operationally defined as a form “public assistance”.

An extreme case

The problem does not stop here. It is not just the retired poor public servants only; there is a larger “universal set” who are also victims of similar circumstances.

Earlier in the year, the district rep for Choiseul/Saltibus and some members of his newly installed Constituency Council paid a courtesy visit to an indigent family in Mongouge. One source told the Powerhouse that he was so shocked by the human conditions under which that family lived that he “broke down”! But the outrageous indigence of the Mongouge family is only one variable in the equation. An investigation by the Choiseul Powerhouse revealed that despite their indigence, they had an impressive inheritance of a large acreage of land in Delcer/Industry.

The question therefore is: why this family should be so poor when they own so much prime property perhaps worth more than a million dollars? Shouldn’t they be a millionaire family?

Our investigations revealed that the land was acquired by a former minister of government through “imminent domain” for the purpose of a community playing field and without a dime paid to the owners. Today, the family dwells in the doldrums of indigence near a “bandjé” where they are exposed to all sorts of health risks.

The case above may be only tangential or extreme; but it is a classic example of a family with lots of property but living under conditions of extreme poverty and therefore it gives credence to Alicia John’s argument that one can own property and still be poor.

Retirement, the new house tax regime and vulnerability

Alicia John’s argument about the impact of the new House Tax regime on pensioners therefore makes a lot of sense. She claimed that the new house tax may exacerbate the vulnerability of pensioners and she may be right, especially when a pensioner invested her/his gratuity to build, expand, restore or improve his/her home, leaving him or her almost penniless with only a “public assistance” pension income to take care of himself/herself.

The banana farmers: a larger picture

But there is still a larger picture! Pensioners and beneficiaries of public assistance are just subsets of the universal set of vulnerable groups. We also have the displaced banana farmers who built massive mansions during the “Green Gold” era and invested in many acres of banana fields and who are in that same economic black hole. And now that their fields have been abandoned and they have no income, how are they therefore going to finance the new house tax?

As is the case with some pensioners, they too have property (house and lots of land) but with the New House Tax regime, the property will become more of liability burden than an asset to them.

Where are they going to raise the money to pay those taxes, especially when VAT has perhaps dug deeper holes in their pockets and with the Black Sigatoka having destroyed their banana fields? These farmers do not even have a pension scheme despite the EU’s intention under SFA 2002 to help establish one on their behalf; and they are gradually being sucked deeper and deeper into the inescapable black hole of poverty.


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