“Pension reform has been a political hot potato passed from one government to another”

Interview: Kugan Parapen, Junior Minister of Social Security

‘In every “hot potato” game ever played, the only certainty is that the music will eventually stop’

 * ‘I think the best course of action for Sydney Pierre would have been to resign as Junior Minister upon the publication of the Finance Bill’

* ‘ We came to power at a challenging time, and I will not say that it has been smooth sailing so far’

He as Resistans ek Alternativ (ReA) had to compromise on some of its principles as it has moved from opposition to government? This is a question increasingly being raised by critics who point to its support for the Government’s pension reforms and other policies. Kugan Parapen sees the issue differently. For him, ReA’s participation in the Alliance du Changement is an exercise in political responsibility in circumstances where difficult and long-delayed reforms can no longer be avoided. In this wide-ranging interview, he explains why ReA voted for the pension reforms, discusses the limits of individual dissent within government, and reflects on the party’s experience of power 18 months into the new administration. Read on:

Mauritius Times: Some sections of the opposition, trade unions and civil society have recently criticised Resistans ek Alternativ (ReA), suggesting that the party has compromised some of its long-standing principles since joining the Alliance du Changement government. One can understand that political compromise is often inevitable in a coalition government, but where does ReA draw the line?

Kugan Parapen: In an interview in these columns on September 6th 2024, some three months before the general elections of 10th November 2024, when asked about the ‘rapport de forces’ within the Alliance du Changement, I said: “First and foremost, we need to point out that if any alliance is concluded, ReA will be a minority partner (with a maximum of three candidates). Members of the party are not naive, neither should the population.”

The main reason why ReA joined the alliance is to rid this country of the MSM authoritarian regime. And the recent show of MSM partisans in front of the FCC is a timely reminder of what the MSM was about – Le règne de la Terreur (the reign of terror). So, we are very proud to have been part of the team that has liberated this country. And everyone who voted in favour of the Alliance du Changement should feel the same.

It took a grand coalition to teach the despots a lesson – “Parole donnée, Sacrée raclée”, yet their eviction from Government House does not mean that the legacy of the MSM was obliterated overnight. In my recent address in Parliament about the motion of the Prime Minister for the creation of a Select Committee on the introduction of Kreol Morisien in Parliament, I stressed that Mauritius, 58 years after independence has yet to complete its decolonisation process.

If we can agree that after so many years of being an independent nation, the shackles of decolonisation have yet to be completely removed, can we agree that 18 months are hardly enough to rid this country of the dismal mismanagement and ransacking culture of the previous regime?

Some are definitely not naive but pretend to be naive because it suits their agenda. Others, who thought that Rezistans ek Alternativ would dance to their tunes once elected, have now mutated to become the arch enemies of the party.

The Alliance du Changement landed on a scene of crime and our critics would like to purport Rezistans ek Alternativ as the perpetrator of the crime…

* The pension reform has been particularly controversial, with critics arguing that it represents a retreat from Mauritius’s traditional Welfare State. ReA voted in favour of the Finance Bill — and, by extension, the pension reforms contained in it. Was this vote the result of collective government responsibility, agreement with the substance of the reforms, or a political compromise deemed necessary to preserve the governing alliance?

I said “Aye” and I fully assume it. How could it be different? The contents of the Finance Bill about the pension reforms are a marked improvement on what was voted in last year.

To recall, the Finance Bill 2025/26 officialised the progressive increase of the eligibility age for the Basic Retirement Pension from 60 to 65 years old. This year, two notable adjustments have been added to the reform.

First, the possibility for each citizen reaching 60 years old as from 1st January 2027 to elect to receive the pension as from 60 years itself, albeit at a reduced rate. And, secondly, and perhaps more importantly, the commitment of the State to grant to each beneficiary of the pension an annual adjustment on their pension to compensate for the increase in the cost of living over the previous year. This automatic provision for annual compensation is a major stride forward for pensioners and workers of this country.

Ever since its instauration in 1958, the universal pension system has never been aligned with the cost of living. As a result, the quantum for the Basic Retirement Pension was reviewed in an irregular manner and often used as a political bait by politicians around election years. Nearly 70 years later, this has been reviewed. The dignity of pensioners will no more be dependent on the whims of politicians. Their right to a decent pension is now an acquired right.

Those who understand the power of compounding will certainly fully appreciate the meaningfulness of annual compensation.

* Are you satisfied that sufficient consideration was given to exploring alternative sources of revenue that might have enabled the government to maintain the pension system in its previous form — with eligibility from the age of 60 — thereby avoiding that many people who genuinely depend on the pension for their livelihood, including unemployed housewives and others without an independent source of income, have perceived as harsh and unfair measures?

As I said before, no ideal pension reform should be implemented in such a brutal way. In most countries where pension reforms have been introduced, this has been done in a phased gradual manner such that citizens who had to wait longer to be eligible were informed years in advance of their respective situation.

Truth be told, the pension reform has been a hot potato which has been transmitted from government to government since the beginning of the millennium. Every government which came to power kicked the pension reform can down the road, preferring to pass on the responsibility to another government rather than assume the responsibility.

None can epitomise this more than Pravind Jugnauth.

In 2004, as the then Minister of Finance of the MSM-MMM government, led by Paul Berenger, he tried to usher in a pension reform, whereby the notion of targeting was introduced. This led to popular backlash, and the then government backtracked at the 11th hour to restore the universal pension at 60.

Ten years later, his MSM party would come back in front of the electorate to embark on a populist agenda – whereby the pension would increase manifold while securing back-to-back electoral success at general elections. But at what cost, one may be tempted to ask?

I am convinced that, if Mauritius were not in such dire economic straits, the pension reform would have been more ‘humane’ and less brutal. But this is a lesson to be learnt by all – delaying unavoidable reforms have real consequences. In every “hot potato” game ever played, the only certainty is that the music will eventually stop.

* One could argue that a better-designed and more targeted means test, focused on higher-income earners, could have made the pension system fairer while allowing the government to demonstrate that pension reform is about strengthening, rather than weakening, the Welfare State. Has the decision to abandon the means test altogether therefore been a missed opportunity to create a fairer and more sustainable pension system?

We think that pension reform should either focus on keeping its universality status while raising the age eligibility or focus on the introduction of means-testing measures. Combining both is a too big ask as far as we are concerned. And this is exactly the reason why Rezistans ek Alternativ pushed back on the idea of bringing forward the means-testing in this year’s budget after the progressive raising of the eligibility age was introduced in last year’s budget and consolidated in the present budget.

Obviously, a means-tested approach would create a more sustainable pension system. But its parameters must be well thought of. The proposed means-tested reform was too ambitious in terms of savings as far as I am concerned.

* Former Junior Minister Sydney Pierre took a different position on the pension reform and was ultimately revoked from office. Does ReA believe that, in the circumstances, he was justified in placing his personal political convictions ahead of collective government responsibility? More broadly, how should an MP or Junior Minister reconcile individual conscience with collective responsibility when the two come into conflict?

I cannot provide ReA’s thinking on the matter, as it has not yet been discussed at the broader party level. As far as I am concerned, your question raises an important dilemma: should MPs vote according to their personal convictions, along party lines, or in accordance with the wishes of the majority of their electorate? Are MPs delegates or trustees?

As Junior Ministers, even though we do not sit in Cabinet, we took the same oath as Ministers upon being sworn into office. Under parliamentary democracy, the executive speaks with one voice. Once a government policy or Cabinet decision is finalised, a Junior Minister is expected to support and defend that policy publicly, regardless of their personal pre-decision stance or private reservations. If a Junior Minister feels unable in good conscience to uphold or defend a major government position, the constitutional expectation of fidelity requires them to tender their resignation rather than publicly oppose the executive from within.

So, I think the best course of action for Sydney Pierre would have been to resign as Junior Minister upon the publication of the Finance Bill rather than the course of action he decided upon. Unfortunately, I feel the Prime Minister was left with no other option than a revocation of his Junior Minister after Sydney Pierre dissented on government policy in Parliament.

* The MSM has pledged to reverse the pension reforms and restore the universal BRP. Is this economically and fiscally realistic? Where would the money come from to finance the restoration of the universal BRP without significantly increasing taxation, public borrowing or the financial burden on future generations?

The MSM promised to increase the Basic Retirement Pension to Rs 13,500 during its 2019 electoral campaign. I remember vividly holding a press conference then as the economic spokesperson of Rezistans ek Alternativ questioning the viability of such a proposal. The main question asked then was centred about how the MSM and its then allies would finance such a measure. We did not have to wait too long to get the answers.

To finance its measure, the then government decided to bury the contributory National Pension Fund (NPF) and to replace it with the Contribution Sociale Généralisée (CSG). That is deliberately do away with a contributory pension system for all private sector employees and impose a tax so as to finance its electoral promises.

A private sector employee earning Rs 30,000, who started working in 2020, would have contributed some Rs 90,000 over the period 2020 – 2025 in terms of taxes (CSG) whereas previously that money would have been stashed away in an account in his name under the National Pension Fund. Upon retirement, the worker would be entitled to a monthly contributory pension under the NPF whereas under the CSG system, he would be entitled to… nothing.

The current government has pledged to come forward with the National Pension and Provident Fund whereby the contributory pension system would be restored. The MSM must tell the population how it intends to finance its promise of restoring the BRP to its original format. Will it go back to the CSG tax model which would deprive workers of a contributory pension at retirement? Their populist rhetoric needs to be exposed.

* More fundamentally, does ReA believe that the universal BRP, as it existed before the reforms, can be sustained indefinitely in the face of Mauritius’s ageing population, lower fertility and increasing life expectancy? If not, what alternative would ReA propose that would be both socially fair and fiscally sustainable?

If ReA believed that the universal BRP could be sustained indefinitely, it would not have voted in favour of the reforms. But we need to be clear on one point – the reason why we supported the budget last year was because it was a budget with shared responsibility. That is, on the one hand, the population was being asked to accept some major reforms while the fiscal policies of the government asked of those at the top of the economic ladder to contribute more to the coffers of the State.

I hear many on the left say that this government is at the mercy of the private sector. Yet, no government since 2005 has asked more of the private sector in terms of taxes and contributions. A Rezistans ek Alternativ led government would certainly have asked even more from the private sector and high-income earners, but this is unlikely to happen within this coalition government.

We think that the focus of government now should be on accelerating the growth agenda. A bigger pie would provide sufficient leverage to keep our welfare system sustainable.

* As regards the wider economic situation, there is considerable uncertainty internationally, given ongoing tensions in the Middle East, US tariff policies and broader trade tensions. Political turbulence, both here and abroad, could ease if economic growth strengthens, inflation moderates, employment expands and living standards improve. Do you see such an improvement on the horizon, or are we likely to face a prolonged period of economic and political uncertainty?

The international geopolitical situation remains complex and volatile. While oil prices have risen in the wake of instability in the Middle East, the impact on inflation has been moderate so far. As a result, the world economy continues to expand. As long as inflation remains under control, the growth agenda will remain on the cards. However, any sustained flare-up in the Iranian situation could push inflation higher and force central banks to adopt more restrictive monetary policies.

The main driver of global growth, particularly in developed economies, has been the AI splurge by companies as they adapt their business models to a new world. The sustainability of this trend will play a crucial role in determining the future trajectory of the global economy. Last but not least, the rise of Eastern powers such as China and India will ultimately determine who the biggest gainers and losers will be.

 * In light of the difficult economic situation, do you think that if the government succeeds in improving the economy and addressing some of the concerns surrounding the pension reform before the next election, the controversy could eventually fade from voters’ minds?

The focus of the population in the latest Budget has once again been on pension reform. There has been considerable confusion and misinformation surrounding the reform. As the reality of the new pension system becomes clearer, I believe that many, especially workers, will come to realise that the proposed system contains many progressive elements that are to their advantage.

Government must accelerate the implementation of its programme and demonstrate to the population that it is committed to delivering the change it promised. At the beginning of the mandate, in my first interview in these columns as a newly appointed Junior Minister in the new government, I was asked about my expectations for change under the new regime. I said:

“My view of things is that this government has been given a clear mandate for change – now, change can be interpreted in so many different ways – it can exist along a wide spectrum. There can be a minimalist version of it as well as a maximalist one. I think I am somewhere in the middle when it comes to my expectations for change under this government.”

Eighteen months later, my expectations have not changed.

* ReA has traditionally presented itself as a party driven by principles rather than electoral calculations. Has participation in government changed the party’s understanding of what can realistically be achieved in politics?

Being in government, or even in parliament, has been a major step in ReA’s journey. And also, a major challenge. We have had to adapt very quickly to the new reality. Participation in government has been a steep learning curve of how a country is governed.

I will not say that it has been smooth sailing so far. On the contrary, it has been a bumpy ride. We came to power at one of the most challenging times for our country from a socioeconomic perspective. Maybe the safest political decision would be to desert to the opposition ranks.

I know that this thought must have crossed the minds of many of our members at some point or another during these tumultuous months. But somehow, it would feel like a betrayal to desert the government when the country needs us most.

Mauritius Times ePaper Friday 7 August 2026