According to the Labour Party, it would have been irresponsible for the government to tamper with the COLA mechanism simply because the calculation will lead to a €0.58 weekly wage increase this year.
In a statement, MP Charles Mangion acknowledged that such an increase was "insignificant" for many families, one had to understand that the rate was not arbitrarily set by the government but the result of a mechanism agreed upon by trade unions and employers' association for decades.
He admitted that the mechanism was not perfect, but it helped provide stability as it helped employers plan ahead.
If the government ignored this measurement, Dr Mangion said, it would have undermined the country's economic stability its competitiveness.
In 2010, when he was opposition leader, Prime Minister Joseph Muscat had said that Malta should be one of the first countries to adopt the concept of a living wage. However, prior to the general election, he ruled out an immediate increase to the minimum wage.
Dr Mangion did point out that Dr Muscat has explained that vulnerable households should be assessed differently, stating that this was where the government's social responsibility was factored in. He noted that the budget is set to include specific measures to help vulnerable households, stating that this was in line with the main aim of the budget - to reduce people's dependency on social benefits.
The MP said that the news that the COLA mechanism would bring about a €0.58 weekly wage increase was one of two events which had a significant impact on the social and economic development of the country in recent days.
The other event, he pointed out, was the European Central Bank's announcement that Maltese banks passed their stress test, confirming that they were capable to handle unexpected economic shocks without threatening the deposits of their customers.
He said that the news helped confirm the Malta's reputation as a politically, economically and financially stable country, and helped ensure that foreign investors viewed Malta positively.
Dr Mangion observed that one hoped that local banks would continue to remain prudent without losing sight of one of their main objectives: to provide credit to those who seek to invest.
He noted that prudence meant being cautious, and not rigidity. The economy, the MP said, required proactive banks: without their active participation in the local economy, he added, it would be impossible for the country to sustain the levels of economic development desired.