COLA will not even buy you a cola, or a packet of peanuts, for that matter. The cost of living adjustment (COLA) will be of €0.58, and not €1.16, as was confirmed the Labour Party yesterday.
But what does that mean to families? A simple exercise carried out by The Malta Independent showed exactly what you can buy with €0.58. Visiting a convenience store, we found out that with 58 cents, you can buy a can of tomato pulp, a banana or a packet of jelly. But you can't even buy a can of tuna or baked beans, or a packet of popcorn kernels with as little as €0.58. You won't be able to buy a cola or a bottle of water.
They say things can be as cheap as chips, but the saying does not fit in either in this context. In fact, when we asked our guinea pig grocer what we could buy with that amount, he was rather taken aback and could not help us out.
This increase will be lowest in many years. In a press statement, the Labour Party confirmed the amount, adding that it acknowledges that families are being impacted by the cost of living, and this will be addressed in the upcoming budget. The PL said that the government has managed to control the inflation rate.
The rate is expected to be final when it is announced during the budget in November. 2013 registered low inflation, with some months registering deflation. A number of stakeholders gave their reaction on the news.
Something wrong with the economy? - UHM
Josef Vella, president of Union Haddiema Mghaqudin (UHM) questioned why the figure was reduced from the originally reported €1.16. "For the figure to be reduced in that way, then something drastic must have happened within the economic sphere. The €1.16 figure was reached following numerous consultations, no one advised us of this change. The UHM is demanding answers." COLA is automatically set by a mechanism that has been agreed upon by social partners - unions, employer's bodies and government entities, all endorsed by the MCESD.
'Ridiculous amount'- Paul Pace
Paul Pace, president of the For.UM, said the increase is unacceptable, and said that one had to reduce tax and stamp duty from the account, the employee is left with a 'ridiculous' amount. The ForUM has long harped for the COLA equation to be revised. "This confirms how correct we've been along. Civil service employees will get an average increase of €10, but what about those working in the private sector?"
Tony's no comment
President of the GWU Tony Zarb did not comment, saying he is abroad and needs to first look at the report before doing so.
Employers' reaction
David Curmi, president of the Malta Chamber of Commerce, welcomed the news, saying it is the correct amount, resulting from the COLA formula which has been used for several years. The chamber has been calling for the formula used to be revised to include both measures of inflation and productivity. In a press statement, the chamber called on the government to confirm the figure.
Joe Farrugia, director general of the Malta Employer's Association (MEA) said the amount is based on a mechanism that has been used for years, and the decrease was due to a negative inflation registered during some months of 2013. This deflation period was not taken into consideration when it was reported that the amount would be of €1.16.