Dear Editor,

This is an open letter to Jag Myers of JULGRA, St Elizabeth:

I acknowledge receipt of your letter dated April 30, in which you have questioned why I have not responded to points raised by Mr Pearnel Charles in a letter to one newspaper concerning the plight of pensioners.

You have specifically pointed to three recommendations made by former Prime Minister, Hugh Shearer. Two of the points to which you have alluded, namely, linking pension deductions to total taxable income and increasing the present maximum of the lump sum payment, are already under active consideration.

As regards the indexation of pension payments to the CPI, this has also been proposed by the Jamaica Government Pensioners’ Association. However, we have not yet arrived at a definitive response. I should indicate that this issue is valid mainly within the context of high inflation scenario, which characterised periods up until the mid-1990s. Since then, the annual adjustments for government pensioners has in fact exceed inflation rate. The major difficulty relates to those pensioners who retired during the years of high inflation when increases did not keep pace with price movements. I cannot miss the opportunity to point out that when I assumed the position of the minister of finance, I articulated that bringing inflation under control was my priority objective. I gave as my primary rationale the fact that inflation was the most cruel tax on the poor, on the fixed income worker and on pensioners. I must state again that one of my great disappointments was the absence of support from the trade union movement for that position.

I thank you for raising the points you have in your letter and I assure you that these will be taken into consideration.

Omar Davies

MP, Minister of Finance

Kingston