Jamaica Government Pensioners Association AGM
Keynote Address
By
The Most Honourable Andrew Holness, ON, PC, MP
Prime Minister of Jamaica
At the
Jamaica Government Pensioners Association AGM
On
July 17, 2024
——————————————————————————————–
Ladies and Gentlemen, it is indeed a pleasure for me to address you this morning. And as I sat and listened to the report and to the questions that were generated from the report, I must say that I was very impressed by the level of management and organization of this grouping, but it also struck me that Jamaica has an incredible repository of talent in our retirees. It is untapped, but if we could find a way to utilize it, it could be quite useful for the society. And I was giving some thoughts to how this could be done, and I may share a few of them as they mature in rumination.
Before I start my presentation, however, I must acknowledge the impact of the recent hurricane, hurricane Beryl, and I trust that all our pensioners were spared any significant damage. And indeed, that none of our pensioners lost their lives as a result of this hurricane. Beryl has left a significant impact on many of our communities, particularly St Thomas, Clarendon, Manchester, St Elizabeth, Westmoreland and Hanover. The storm has caused loss and damage that we are still grappling with. Our hearts goes out to those who have lost loved ones and those whose homes and livelihoods have been adversely affected.
In this challenging time, we have witnessed the remarkable unity, kindness and resilience of our people and together, we will rebuild with the spirit of community and solidarity that defines the Jamaican spirit.
But as I reflected on the passage of Hurricane Gilbert, many of you would be active in the public service at that time, 36 years ago. And as I reflected on my son, at home with me from university during the hurricane, I said ‘young bud no know storm’. Thirty-six years ago, when we had our worst ever hurricane impact, there is an entire generation that would have no clue as to what it means to be impacted by a hurricane and since Gilbert, we have had some other impactful weather events. We have had Hurricane Ivan, and that would have been 17 years ago. And we have had Hurricane Dean and Gustav about 16 years ago, so it has been some time since Jamaica has been impacted in any significant way by a weather event.
So I know that my pensioners here would have a different expectation in terms of the speed of recovery based upon what would be the benchmark of hurricane impact, which would be Hurricane Gilbert but there is indeed an entirely new generation of Jamaicans whose expectations are far different based upon what they would have experienced. And it is important that there is this social conversation happening so that, as a society, we have one defined perspective as to how the society recovers from crisis and disaster.
The need for- I don’t want to use the word patience, because it is important that public officials and public entities are always feeling the pressure from the society to recover so we keep moving faster, but there has to be a level of understanding of what is possible and what is not. So yes, the public must constantly make their needs known, constantly ask for information and public entities and public officials must constantly be accessible and provide information. And I believe that it is in that process that a level of understanding can develop in the society, but I think our pensioners who have the experience, who have been through it, who know it, who understand it, can help to guide the public conversation about these matters.
Because as I said, I was reflecting on and doing some reading as well on the recovery from Hurricane Gilbert, I think we can say that having been hit by this natural disaster though it is in no way comparable to hurricane Gilbert, it is clear that we have improved without question our preparedness and our immediate relief response. This is not to say, however, that we must not constantly be in a process of improvement. And that is why we have taken a policy decision to empanel a committee to review our preparedness and make the changes that need to be made now so that if we are hit by another disaster, which is quite likely in this hurricane period, that we are not just prepared, but we are ready to act and so in a few days from now, I will be naming the committee to do the review. And I’m mentioning it here because I’m going to ask your president to recommend someone because I’m certain amongst your membership would be persons who were involved in previous disaster preparedness responses, who could be very useful in giving us a perspective, your experience and knowledge on how we are treating with disaster response now. So, Madam President, you should expect a little note from me to look within your membership as to someone who could be knowledgeable in this area, who we could appoint to such a review committee.
Now since my administration took office in 2016, we have made it a priority to improve the welfare of our esteemed pensioners. We recognize the challenges many of you face, and we have been working tirelessly to address these issues. Significant steps have been taken to ensure that your needs are met, and we remain committed to providing support and the resources you deserve. And I also want to say that I read all the emails that I get about things like, which was mentioned, more sponsorship and subsidy for your health insurance, increasing your pensions and those things. I get maybe three or four emails every month from random pensioners who have gotten access to my email and they keep sending me emails and I read them in addition to what is being sent straight to OPM, Office of the Prime Minister, and my chief of staff would collate and then place in front of me the list of emails.
And during the budget period, especially there was a flurry of emails to say, Prime Minister, remember the pensioners. I see you have given increases to the public sector workers, what about the pensioners? So, I want to say to you that your appeals are not in vain, and it is not as if they are going unseen. They are being incorporated in the general policymaking. We can’t do everything all at once, but we do take into consideration the appeals that are made. Sometimes the responses don’t come in the way you would want it, but they come in ways that we can afford and that it is equitable for everyone, so I wanted to give you the assurance that this body is not a body that we ignore or don’t listen to. We listen to this body, we pay attention to what you say, and as best as we can, we will respond.
As a result of some of the appeals that were made effective April 1, 2024, and you all know about this already, the pension and age-relief income tax exemptions have been increased from $80,000 to $250,000 each. The last time these exemptions were increased was in 2010, and that was from $62,500 to $80,000 each which was a mere increase of 28% at the time.
The increase that we have granted is 212% so I wanted to point out that it was as a result of your lobbying and your appeals, that when we were putting the entire budget together, that we were very thoughtful about how we could give some benefit and relief to our pensioners. This adjustment is crucial in helping you to maintain your quality of life and meet your daily needs. We recognize that ensuring financial security for our pensioners is not just a matter of policy, but a fundamental right for those who have given so much to our nation.
Although the National Health Fund benefits a wider pool than pensioners, it is crucial to recognize the significant strides we have made in 2023 to support your health and well-being. We increased the drug subsidy for over 350,000 active NHF beneficiaries and more than 21,000 beneficiaries of the Jamaica Drug for the Elderly Programme (JADEP).
Additionally, the NHF 1,600 subsidy for one prostate-specific antigen test per year previously available only to men 40 years and older with an NHF card is now extended to all Jamaican men 40 years and olde and we encourage all our men 40 years and older to go and get your specific antigen test. This is for your prostate diagnosis, your prostate health.
The NHF also offers a 1,300 subsidy towards the Pap Smear test for all Jamaican female aged 21 and older in keeping with screening guidelines.
The NHF has also expanded its Card Programme to include five new health conditions: lung cancer, colorectal cancer, multiple myeloma, Parkinson’s disease, and thyroid disease, bringing the total number of conditions covered to 22. This expansion represents an estimated $450 million in additional subsidies, benefiting approximately 47,000 Jamaicans. With these new additions, ten new medications are now available under the Benefits Programme.
Moreover, the NHF signed 61 contracts valued at $27 billion for the procurement of essential drugs under the 2023-2026 Pharmaceutical Awards Programme. These efforts demonstrate our unwavering commitment to improving the health and quality of life of all Jamaicans, including our well respected and well-deserving pensioners.
Now, effective September 2023, the enhanced benefits under the Government Pensioners Administrative Service Health Scheme, (GPASO) our comprehensive health insurance plan specifically designed for government pensioners. This improved plan provides access to a wide range of medical services ensuring that you can receive the necessary care without the burden of excess cost. Your health and well-being are our top priorities, and this initiative underscores our unwavering commitment to you. Importantly, these enhanced benefits were achieved without any increase in your monthly subscription and so I note the request for greater support and greater subsidy. I noted it and I heard the cry “we need more” so I wrote it down and we’re not yet approaching the new budget cycle and it is not appropriate for me to on-the-fly at a podium to commit government fiscally but it is something that I will bring the necessary ministries together; the Ministry of Labour and Social Security and the Ministry of Finance, and we will look at it in a serious way to see what other things we can do to increase the benefits for our pensioners.
I know you’re listening keenly to me going through all the things we have done because we understand how it is. Nobody is going to say yes, the government did this, that, that and the other because that might just make the government too comfortable and that’s how our democracy work. You keep the government on its toes so that we are always trying to see how we can improve benefits but on the other hand, government also has to balance the fiscal capabilities with the needs and requirements because if government overpromises and it is unable to deliver and it tries to deliver on a overpromise, it is only going to be bad for everyone. So, we have to make sure that whatever it is we commit to, we can sustainably deliver it and that is what you have here in this government, that we don’t overpromise. We examine it carefully and if it can be done, we will do it.
Now, the recent improvements in salaries for public sector workers as a result of the public sector compensation review will have a significant positive impact on the pensions of these workers upon their retirement. It is worth noting that the effect of including a number of separate allowances in the salary has the effect of increasing pensionable earnings and that might not be of comfort to the present group, but you will see why I raised it in the presentation.
The greater percentage of one’s salary that is pensionable, the higher the pension payment when one retires. Better pay today results in better pensions when one retires. The enhancement ensures that our public sector employees will enjoy greater financial security and stability in their retirement years, reflecting our commitment to their long-term well-being. So, yes, this this is something that has been raised with me by pensioners looking on and saying the next generation of pensioners, they will be doing much better by virtue of the compensation review than our present pensioners.
So, yes, you can say that as a result of the compensation review, the future security of our public sector workers will be much better but there are some caveats to that. It will only be much better if we control inflation. That is something that we all have to pay attention to.
The second caveat is that it will only be much better if, and especially for those pensioners who are not just going to rely on the government pension but are going to save if you actually save smartly. There are two important caveats here. First is the government’s management of inflation and the second is how you manage your own savings; those are the two important criteria. And one of the things that we have been doing as a government, and which we have done better than any other government is to manage inflation and it is our intention to keep inflation within the target band. The target band is 4-6%, and if we can keep it within the target band, then those new pensioners who will come in based upon the new salaries, they will have a much better quality of life because they will have a much higher disposable income and purchasing power by virtue of the control of inflation.
So were I a pensioner and I’m maybe a couple of years away from that now, one of the things I would want to see of any government is their plan, their fiscal and monetary strategy towards managing inflation because inflation affects fixed-income persons like pensioners the most. So it’s one thing to say we want more benefits or we want access to more services but what needs to get into our political economy, meaning the things that we vote on as pensioners, is what is the government doing to control inflation; that is how I think our pensioners should be thinking, which government can control inflation now and in the future.
And then the second thing is which government can control the cost of living. They’re two different things and we tend to use inflation as a proxy for cost of living, but it’s not necessarily the same thing, but you want to see which government is trying to structure the economy in such a way that the things you need to survive are affordable. Managing inflation is a part of controlling cost of living, but there are many other things that go into cost of living. For example, and I’ve used this example before; what is the government doing to ensure that you are able to access health care, medicines; these are things that are important for pensioners. That will help with the cost of your living. What is the government doing to ensure that you have access to public transportation in a reasonable way? That helps your cost of living and so these are the things that as pensioners now you would look at your government and judge or become part of what we call the political economy, what is it that you are going to vote on for your government and I’m saying to you as pensioners, that this administration has been very thoughtful in not just the provision of benefits, but also in the management of the economy to give the stability so that whatever little income you may be getting, that will have a maintenance of its purchasing power and you will be able to access the services that will guarantee your quality of life and that is what this administration has been doing and I want to say to our pensioners that you are always forefront in our thoughts as we try to structure the economy so that you are able to survive in it.
Now, I’m not here saying that it is a perfect economy. I’m not here saying that there aren’t problems and challenges, but I think that we should recognize where changes have been made, where improvements have been made, and where persons are getting benefits now that they were not getting before because, if that is not done, we will have a one-sided conversation that ‘nuttn nah gwaan’, when it is not true; a lot of things are happening as I have stood here, and I have read out a lot of the things that we have done.
Now, as we talk about things happening, the last time I met with the executive of your association, they raised the issue of pensioners who were on hard times, particularly some of them have nowhere to live and I believe- June you mentioned a case to me of a pensioner who had nowhere to live and I said that we would help using the New Social Housing Programme. So today I’m going to make a commitment to you that I’m going to give to the executive the ability to recommend two beneficiaries per year under the New Social Housing Programme.
They would have to meet the requirements. There is no public benefit that is given without assessment, so we have to assess that the person actually needs the benefit. We would depend on the association to make the recommendation, and this would have to be someone who either has land or has permission to use land that we can build on because we can’t build on land that there is no permission, so they have to have access to some land, and we have to assess their need circumstances. It has to be a genuine need and so we’re going to give you this recommendation of two per year from your association.
Now, while we have made significant progress, we must also address a pressing issue that affects not just our country, but the entire world and that is the retirement savings crisis. This global challenge impacts a growing number of individuals who are financially unprepared for retirement. As the life expectancy increases as a result of advances in medicine, public health and living standards, this concern becomes even more critical. It is imperative that we tackle the issue proactively in Jamaica ensuring that our citizens are better equipped to secure their financial futures and enjoy dignified retirement. One of the most effective ways to combat this crisis is by encouraging our people to start saving and investing for retirement as soon as they enter the workforce, educating them about the importance of financial planning, and the benefits of compound interest is crucial. By starting early, they can build a substantial nest egg that will provide financial security in their later years.
For those already in the workforce, regardless of age, it is imperative to begin making decisions now for financial security upon retirement. It is never too late to start. I urge my Jamaican family to take action now and start saving no matter how small it is and that is why in all the programmes that we have to promote the culture of work, we have several programmes where we are bridging between school and work. For example, the Summer Employment Programme, we have the LEGS Programme, (Learn, Earn, Give and Save). We have several programmes; one of them is the Jamaica National Service Corps, (JNSC), and in all of those programmes, whenever they work, even if it is only a stipend, we take a certain percentage of the salary and we put it into compulsory savings for them.
Now, I have had a youngster under one of the HOPE Programmes who was working on a construction site as a HOPE worker and we took out of his pay, I think it was like five or six thousand dollars every fortnight and at the end of his apprenticeship, he got something like $150,000. And I met him just randomly, and he was explaining to me that that was the first time he had ever had so much money one time. He said he was upset that they were taking the money out of his pay, but when his programme was finished and he got his $150,000, he was so happy he didn’t know what to do with it, he wanted to go and buy an iPhone.
Anyway, he said he didn’t buy the iPhone. He used some of it to buy some tools because he was going on to do, I think it was masonry, at HEART. So, he bought some tools with it, and he saved, he put away some. It’s just a good story about saving. It is hard to take the money now that you could consume and put it away but you’re only going to see the value of it when you actually reach that rainy day, and you have it.
So again, I’m soliciting your help in carrying on this conversation in the society. Remember I’d asked you earlier to carry on a conversation about reasonableness and understanding in the society based upon the experiences that you have had, so I’m now going to ask you to carry on this conversation with the younger ones coming up about being prepared for the future and being prepared for the future requires us to save no matter how small it is, to put aside something. And you can be very influential especially on your family members and people who you’re mentoring so I ask the association. I hear you talk about your Facebook page and your community, maybe this is something you could take on as a special project helping the conversations in the society. A lot of conversations going on, much of it is misled and the public conversations really need to be guided by the wisdom that is in this room.
We have been doing our part as a government in trying to develop programmes for financial literacy and to encourage savings but as I’ve said, the best way for this to happen is to have our retirees participating in the conversation and helping our young people to understand the importance of saving.
I also wanted to point out very quickly while I still have your attention that as our economy improves, we will make the necessary allocations towards improving the benefits that you receive, particularly the benefits that will reduce the cost of living to you. I’m putting it this way because I want you to recognize the connection between our economic prospects and the benefits that you receive.
For a very long time in Jamaica, the conversation has been “we want more”, but there hasn’t been an equal chorus to say, “we will produce more” and with that disconnection, what happened to us in wanting more is that we ended up borrowing more. And until we develop a culture that says we are self-reliant, and I know that some of you here would remember the 1970s, self-reliance. I am a firm believer in self-reliance. I don’t take it lightly. Some people might interpret it as a political theme. For me, it is ‘livity’, it is the way I live. I rely and believe on my people and myself. I believe in self-reliance.
Until we understand what that means, that we have to take the posture that nobody from outside is going to come and provide for us, we have to provide for ourselves. We must be able to stand on our own two feet and face the crises and challenges that will come. And the only way to do that is to produce; that is what self-reliance means, we are relying on our own production. And it is important, again, the incredible repository of experience and knowledge that is in this room, to help to guide the public discourse and the expectations that exist because all of you would have lived through the period of the 70s, the difficult periods of the Jamaican economy, and you would be able to compare how the society is changing. And if we are going to make genuine, long-standing, long-lasting changes in our society, we need not just to change institutions, but we need to change culture.
So, as we ask for more, the other side of the equation must be how are we going to produce more, that is it. And whenever I raise the issue it’s almost like I don’t want to hear this subject really but it’s a conversation that the family needs to have. The family needs to have that conversation about our productivity. And yes, it is not just for me to talk about it, there are certain actions that we need to take to improve productivity and one of the things that we have done so far, we haven’t really explained the policy and strategies to the public, but as it unfolds and people begin to see the impact then it’s easier to explain.
So, for this administration, one of the first things that we wanted to do was to rapidly increase employment and you would have seen that. We have now moved from teens unemployment, we are now at 4.6/ 4.2% unemployment, and we’re going to continue to increase our employment numbers as our economy expands. As our economy expands, that’s a sign of productivity.
Now, we need to reach to another level which is having the unused capability of our labour force absorbed into the economy. Now, we need to increase the level of production of each worker so strategy number one was to get all our labour resources employed and then once they are employed and involved in the workforce, then we seek to improve the productivity of the workforce and that will give us another level of economic growth that will move our economic growth trajectory out of the 1 – 2% region to the 3 – 4 – 5% region. And then the other change in our society, which will increase even further, is the integration of technology, the improvement of systems, the joining up of government, the reduction of red tape and bureaucracy and that will give us another elevation and then we can move on to now innovation, meaning the creation of new products and new technology and new services and that will give us another bump.
For our pensioners, for persons who are no longer in the labour force, my own view is that there is still a way for you to participate in this new economy and I think that we will have to work out more deliberate and direct strategies as to how we can leverage the knowledge and skills that you have to support the growth of the economy, and this can be done, particularly, helping us with training, helping us with reviews and nowadays, you don’t have to travel to work, you can work online. So, I’m going to have a discussion with the Minister of Labour and Social Security and ask him to pursue with your president more deliberate and instrumental strategies that we can use to leverage the incredible resources that we have that are in this room. I have pointed out one to you already which is the recommendation of a member of your group who could assist in the planned review of our disaster preparedness and response strategy.
And there are many areas of government that need this kind of systematic review. We might think we’re doing well, but we’re not seeing all the gaps, and it’s important to have people who have knowledge and experience who can oversee these things and give guidance and recommendations to the government.
So, Ladies and Gentlemen, you have been a wonderful audience. You have listened attentively. Nobody has drifted off, and I noticed that there was a lot of note-taking taking place so I know whatever I said is not only recorded on tape, it’s in the minutes of this meeting and I know that if I come here next year, and by the way, I gather I’m the first prime minister to address this group so I know that if I’m invited next year, it is not your president who will be giving the annual report, it will be me as to what was promised and what was delivered, and the progress update. My mother is a pensioner, and she calls me quite regularly and I have to take pen and paper because she’s telling me everything that is happening in the country and I know as pensioners, you stay tuned and you stay informed and you are very much tied in to the development of the country so I feel always welcome and I feel a distinct privilege to be amongst you and to be able to absorb and learn from you from this group of wise and experienced elders of the society.
I thank you.