26 October - 1 November 2000

Can social welfare reform be avoided?

Preparations for the full-day conference organised by Economic and Management Consultancy Services Ltd in collaboration with The Malta Business Weekly and Middle Sea Group, entitled “There’s no such thing as a free meal! Social Welfare Reform: An economic challenge and a financial services opportunity”, are underway. Nicolette Cassar, conference coordinator, interviewed some of the exhibitors on their expectations for this conference

Do you think it is possible to avoid the reform of social welfare system in Malta?
“Reform is inevitable! Malta has already begun to feel the ever-
growing burden of social welfare. The present system is in great need of reform. Unfortunately we are
not acting fast, and this to the
detriment of future generations,” Alexander Tranter, Chairman, Health Services Ltd told The Malta Business Weekly.
Edward Sammut, Company Secretary, Citadel Insurance, on the other hand, is convinced that the social welfare issue in Malta must be resolved as soon as possible. “The solution to the issue should seek to guarantee an adequate standard of living to future generations that reach pensionable age,” he said.

What challenges do you envisage in social welfare reform?
Tonio Darmanin, general manager, Globe Retirement Planning, mentioned some important elements within the challenges. “The unions have to pull their heads out of the sand and not continue insisting that there is no problem as it will only manifest itself in 15 years’ time! Government must take immediate steps in anticipation of any future measures. These steps must be in the direction of changing our culture of dependence on the state for our retirement. Our youths must be given an immediate incentive to make their own provision,” he said.
According to Mr Tranter, the major challenge lies in the reform of the local pension schemes. “As reform in this sector will affect so many people, and change will always bring with it a certain amount of resistance, it is therefore critical that reform is properly mapped out from the start so that everybody can not only visualise its effects but it will allow adequate time for everybody concerned to adapt to it,” Mr Tranter said.
Mr Sammut sees challenges for the financial sector “in offering the right products to make up for a shortfall in the provision of State pensions for future generations”.
“In this respect a cultural change is necessary to build a positive attitude towards private pensions and occupational schemes. Government must take initiative by introducing the necessary fiscal reforms to facilitate the change,” he explained.
For, Chris Busuttil, director at Unipol Insurance Agency Ltd, the challenge lies in “the sudden competition once some sort of reform is done”.
Are there any opportunities?
Joe Demanuele, general manager, Middle Sea Valletta, Life Assurance Ltd, is very optimistic. “One can always say that in every crisis there is an opportunity!”
He sees a need for individuals to start providing for their own retirement needs during their working life. Pensions could be provided by employers via occupational pension schemes, also on a funded basis.
“This scenario is considered to create opportunities for the providers of financial services, which can range from providing financial advice for retirement planning and protection needs, pension fund management opportunities and also for life assurance offices,” he told The Malta Business Weekly.
Mr Sammut visualises the opportunities for insurance operators and providers of financial services to develop the products such as life insurance products, personal pension plans and occupational pension schemes.
The possible sales benefit is also the main opportunity for Unipol Insurance Agency.
It is not only the financial services sector which has new opportunities, Mr Tranter said, “but also on a much broader horizon for private sector in general. Private sector should play a much more prominent role in the provision and delivery of numerous services within the social welfare sector.”

Do you think that the EMCS conference would be of benefit to the participants? Why?
The conference, Mr Tranter said, will be of benefit to the participants because it will be providing a public platform for issues related to social welfare reform to be discussed. The more awareness and involvement that is created, the better, as this should help to reduce resistance to reform.
Mr Busuttil is convinced that the conference shall give a good push to the reform of social welfare by bringing the relevant authorities and the operators involved together to discuss the issue.

What are your expectations from the conference?
According to Mr Busuttil, the EMCS conference will enable participants to make contacts, communicate with competitors and address the issue as a “way of no return”.
Mr Sammut expects to identify future possibilities and opportunities both from a private sector and a public sector point of view through the conference.
“Not only to actively participate in the local debate on social welfare reform, but to also demonstrate our company’s ability and commitment to further develop public/ private sector initiatives in the social welfare field,” Mr Tranter said.
For Mr Demanuele, “this conference should create an on-going debate among all the social partners on the problems associated with the social welfare reform and should make financial services providers aware of the opportunities that can be created from reforms expected to solve this crisis. This will inevitably create some pressures on the politicians to provide the support that is necessary to accelerate the process to find a solution and propose the necessary reforms for an adequate social welfare system.”

For further information or for registration, call Dorothy Camilleri or Mariella Cini at EMCS Ltd on tel: 341848/9; fax: 318677, e-mail: info@emcs.com.mt.