AD reiterated its position that workers should receive the full COLA increase while calling on the government to enact policies and effective mechanisms which keep inflation in check.
Michael Briguglio, Spokesperson for Social and Economic Development, said, “The COLA increase simply addresses the drop in purchasing power felt by workers and pensioners during the past year. If this increase is not granted in full, the result will be that these categories, especially the most vulnerable will experience a loss in living standards.”
AD warned that the failure to grant the COLA increase will be a serious blow to stability and industrial peace which is essential for the country to remain competitive. As regards the suggestion that the government should subsidise part of the increase, AD said that this demand is partly reasonable since government induced costs contributed to the current scenario but such a measure could undermine the sustainability of public finances.
“This is far from an ideal solution as it would further deplete public funds which are desperately needed to improve public services, welfare, the country’s infrastructure and investment in education and the environment,” added Briguglio.
“To make up for such a shortfall in income without increasing hardship for job creating businesses, the government could consider a windfall tax on banks and property speculation. In view of the current circumstances AD augurs a forward looking pact between the social partners to ensure that inflation is kept in check during the next year.”
“AD is calling on the government to take a more active role in creating effective mechanisms against cartels and uncompetitive practices, to facilitate the direct access to the market for producers like farmers and fishermen and to take an active role in those sectors where the small size of the Maltese market results in private monopolies. Government should also consider an improved and more realistic mechanism for the calculation of COLA,” Michael Briguglio added.
“The small size of the Maltese market results in situation where the market is controlled by a few importers. The medicine sector is a case in point. Direct purchasing by the government should be considered in these sectors.”
AD also warned inflation would only continue to increase if the government absconds its social responsibilities by removing subsidies on transport. ‘The proposed increase in transport fares would only worsen the situation of the most vulnerable categories. Before Government decides upon changes in prices, the public should be assured of an improved, efficient, reliable and clean public transport service’
Prof Arnold Cassola, AD Chairpeson, added, “Ultimately any agreement between social partners should not sacrifice the purchasing power of middle and lower income earners. Malta is effectively an anomaly in Europe where inflation dropped as a result of the recession. People cannot be expected to pay for the government’s shortcomings and abuses by certain sectors by having their purchasing power decreased.”