Premier: Salary hikes without pension reform a ‘missed opportunity’

Premier Dr Natalio Wheatley has acknowledged that the government missed an opportunity by implementing public service salary increases before reforming the territory’s public pension system.

During a recent interview on the Talking Points radio programme, the Premier said the sequence exposed a growing financial challenge that now requires urgent action.

“Yes,” Premier Wheatley responded after host Damion Grange asked whether it had been “a missed opportunity introducing the salary increases without the accompanying revamping of the pension programme.”

The Premier made the admission while discussing the sustainability of the government’s non-contributory pension scheme, which he said has become an increasing burden on the public finances as more public officers retire.

He noted that his administration has been pursuing a contributory pension system for years but acknowledged that progress has been slower than intended.

“I’ve been speaking about having a contributory pension scheme from my very first budget speech when I became the premier and minister of finance in 2022,” Dr Wheatley said. “Government has an implementation and execution problem.”

According to the Premier, a committee has already been established to develop recommendations before the matter is taken to Cabinet. He said he recently instructed Ministry of Finance officials to accelerate the process.

“I admonish them that it’s going too slowly,” Premier Wheatley stated. “It’s something that I promised the people that I would get done.”

Absolutely essential 

Dr Wheatley argued that introducing employee contributions is no longer optional if the government is to maintain long-term financial stability.

“It’s absolutely essential to the sustainability of government finances. It’s a growing unfunded liability. And with the increase in the salaries, it’s exposed us on an exponential basis.”

He added that the public needed to understand why the reform would be necessary when it was eventually introduced.

The Premier’s comments come as the government also works to increase pensions for retired public officers who were excluded from the salary review that benefited active civil servants.

Dr Wheatley previously apologised for that omission and pledged that retirees would receive higher pension payments, with funds allocated in the 2026 budget to facilitate the increase.