Samuda optimistic as Senate approves tourism pension regulations

“Tourism will rise again,” said minister without portfolio, Senator Matthew Samuda as he closed a lengthy and comprehensive debate on the complex industry issues in the Senate on Friday.

Noting that the debate, which was primarily to approve the regulations to pilot the new Tourism Workers Pension Scheme, had provoked an analysis of the industry and the Jamaican economy, Senator Samuda assured the Senate that he was confident the industry would overcome the setbacks and reaffirm its reputation among destinations worldwide.

“Jamaica, as it faces the challenges that the rest of the world also faces, it is clear that we will rise again. Tourism will, indeed, rise again – and it is because the tourism product that we have is not simply sun, sand and sea, but it is with the smiles of our people that we have built this tourism product on,” Samuda reassured.

“So it will rise again on the backs of their work, and we will see why this particular set of regulations is particularly important,” he added.

The regulations, which were piloted through the House of Representatives last week by Minister of Tourism Edmund Barlett, cover a defined contributory plan, supported by legislation, which will require mandatory contributions directly from both employed and self-employed workers in the industry, and their employers.

Samuda, who is attached to the Ministry of National Security but was acting as Leader of Government Business in the absence of Senator Kamina Johnson Smith, told the Senate Friday that the Government clearly understands the risks that it faces in tourism.

“This is why the Government, through Minister Bartlett, would have pushed to set up the [tourism] resilience centre which is anchored at The University of West Indies [Mona], to look at issues like those raised by Opposition senators in the Senate on Friday.

Principal spokesman for the Opposition, Senator Damion Crawford, opening the attack suggested that “there is no immediate haste” to introduce the pension programme in light of the evidence as to where the COVID-19 crisis is headed.

“I propose to you that this particular phase might actually make waste, if we don’t consider the things that are to be considered,” Senator Crawford said.

Crawford suggested that January 2021, the final date for joining the pension scheme and gaining full benefits, is too soon a deadline to start contributing, considering the lack of evidence on the eventual impact of the novel coronavirus and noting that the industry was already shut down by the lock down of air and sea transportation to the destination.

He said that generally, based on the income bracket of the tourism worker, the fact that they seldom have any cost reduction at age 65, and based on the continuity of contributions from agencies like the Tourism Enhancement Fund (TEF), there are too many uncertainties involved.

Senator Crawford also questioned the taxing of gratuity earned by hospitality workers. He said that this additional earning by

hotel workers is already going to be severely affected by reduced hotel rates, a likely inducement for tourists to use the accommodation, in the post COVID-19 period.

He also called for an unemployment insurance policy for the hotel workers, and a specific minimum wage for workers in the hospitality sector similar to that of security guards.

Opposition member, Senator Lambert Brown, questioned the inclusion on the forms for admission to the pension scheme of a question as to whether the applicant is closely related to any politically exposed person (PEP) or public figure.

Senator Brown questioned why anyone related to a senator would be excluded from the scheme, on the basis of being related to a public figure.

“The politicians are seen as bad, but we must pass this law confirming that we are bad and we should not be associated with! Are we really serious?” Brown asked.

Opposition Senator Wensworth Skeffery also had an issue with the inclusion of the question on the membership form.

“I think that every hotel worker would want to know why you are asking this particular question,” Skeffery asked.

Another Opposition Senator, Andre Franklin, said Jamaica’s cash-led economy, “where we definitely have to have physical cash” continues to pose a risk for the spread of the COVID-19 disease by reducing social space. He said that mobile money would create a wallet which would reduce the level of physical interaction in the financial system and encourage social spacing.

He urged a move away from the extensive use of cash and to mobile money use instead by implementing smart technology, which would remove the risk of passing COVID-19 disease through interaction.

“We are stuck in the old-time economy where we definitely have to have physical cash,” he commented.

Samuda and fellow Government senators, Kavan Gayle and Donald Wehby, completed the Government’s response to the plans for the introduction of the pension scheme.

Senator Gayle, a trade union leader, supported the need to minimise the effect of the pandemic on the gratuity earnings of the workers. He said he supported the possibility of unemployment insurance, but had concerns regarding the failure of employers to remit the funds to the responsible authority.

He said he was happy with the efforts of the Ministry of Tourism to protect the industry and the workers, and the recognition being given to the average workers in the industry. However, he said he regretted that the pension scheme was starting at a “bad time”.

“We didn’t anticipate the COVID-19 pandemic but now that it has become a reality, I wish to thank the Government for moving so swiftly to respond to this crisis,” Gayle said.

Senator Wehby supported the idea of unemployment insurance, and suggested it was time for the Senate to have a debate on the matter.

He noted that only a limited number of countries in the region had adapted to the idea. However, he said that while it is very costly to operate, governments could introduce a contributory scheme, and he suggested that Chile was a good example to follow.

He also noted that less than 10 per cent of Jamaica’s labour force participate in a pension scheme, and proposed that it be debated in the Senate, to include consideration for it being extended to the business process outsourcing industry.

Closing the debate, Senator Samuda noted that the issues associated with persons being questioned about their PEP relationships was a requisite aspect of the international relationship between financial institutions. However, he said that it would have no effect on the approval of the application for the pension scheme.

He also noted that tourism workers above 59 years old whose salaries would not qualify them for the pension scheme could apply for an augmented benefit. But, to get the full benefit, they would be required to become members within the first 365 days of the pension fund.

He noted that the regulations would mark the “final hurdle” before tourism workers will be able to join the scheme.

“So, the passage of these regulations today is timely, as it is now time for the Government of Jamaica to give back so that the tourism workers can retire with dignity and financial security,” Samuda said.

The regulations were eventually approved without dissent. The approval has now opened the way for the governor general’s signature to be added to the Act and for its eventual publication in the Jamaica Gazette.

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