The cost of living adjustment debate is once again rearing its head, but this time around well in anticipation of the yearly pre-budgetary debate. And rightly so, if the country is to see its competitiveness, which has been shown time and time again to be flagging in comparison to its European Union competitors, come up to at least par with its economic rivals.

The latest round of the great COLA debate was started by none other than Central Bank Governor Michael Bonello, who recently raised the issue once again, saying that any benefit the mechanism may be perceived to have in terms of stable industrial relations must be weighed against its potential to ratchet price levels upwards, which would constitute a veritable death knell for the country’s already embattled manufacturing sector.

Yes, the cost of living adjustment has been fundamental in helping workers keep pace with inflation. But, on the flipside, it is also dampening employers’ bottom lines, which are in turn accounted for in higher prices for the products they produce – bad for exports and bad for consumer prices of goods produced for the domestic market.

Last year the debate was largely over the level of the COLA and whether it would be shared out between the government and the private sector. The latter, of course, has always footed the bill but it is now suggesting that the onus of adjusting wages in line with inflation be shared.

This year the debate could very well be over whether to retain the COLA or not.

In 2009, the IMF had called on Malta to scrap the COLA, noting, “As inflation remains high, the mandatory inflation indexation of wages (COLA) risks hampering necessary cost adjustments, especially in manufacturing industries hit by the global downturn, and in low-skilled employment intensive sectors.”

The IMF observed that negotiations on the public sector collective agreement should set a “conservative benchmark” for the private sector, but fell short of advising how such a benchmark would be ensured.

It advised “introducing productivity-linked wage increases at enterprise level instead [of the COLA]”.

The issue of the COLA is a tightrope between the toll of inflation on workers’ wages and wider competitiveness issues, where the IMF found that “wage developments will also need to play their role in strengthening Malta’s competitive position”.

This, however, cannot come at the expense of families’ standards of living – that is the tightrope the government has walked in years past and will walk this year yet again.

No further micro credit delays

The GRTU and the Chamber of Commerce, Enterprise and Industry – together representing an array of businesses from the smallest to the largest – have something to agree on, that the government needs to get its act in gear as regards the micro credit scheme it had announced in the last budget.

Last autumn the government had made the initiative one of the centrepieces of its budgetary plan to set the wheels of the economy in motion as the country found itself in the middle of a recession.

The scheme was to provide €10 million in funding for small enterprises, with each firm successfully applying being provided with loans of up to €25,000 to help them cope with liquidity problems resulting from the recession.

The scheme is meant to be implemented this year but now, a quarter of the way down the road already, the micro credit scheme is nowhere to be seen.

Both the Chamber and the GRTU have called on the government to implement the scheme without further delay, and rightly so, lest the initiative suffers the fate of other budgetary measures that have fallen by the wayside and have never seen the light of day.

Corporal punishment

Over recent weeks, child abuse has been at the top of the country’s agenda, with sexual abuse victims having claimed the spotlight, and rightly so.

But there is a more silent type of abuse that is at once both widely accepted and deplored – corporal punishment.

By definition, corporal punishment is the intentional infliction of physical pain as a method of changing behaviour and may include abusive methods such as hitting, slapping, punching, kicking, pinching, shaking, use of various objects – paddles, belts, sticks, or others, or painful body postures.

As matters currently stand, by allowing corporal punishment in the home and in alternative care settings, Malta is in violation of the European Social Charter. The United Nations Committee on the Rights of the Child in 2000 and the UN Committee on Economic, Social and Cultural Rights in 2004 called on Malta to correct the situation. Both had expressed concern about Malta’s ‘reasonable chastisement’ provision that allows corporal punishment, and both had called on Malta to explicitly prohibit corporal punishment in the family.

While many countries have banned the practice, Malta is one of 11 EU member states still allowing the practice within the home, in what many consider an antiquated throwback to the ‘spare the rod, spoil the child’ philosophy.

European Human Rights Commissioner Thomas Hammarberg raised the issue in an opinion piece this week entitled “Time to give smacking a beating – children deserve total ban against adults hitting them”.

Thirty-one years ago, he said, Sweden was the first country to ban corporal punishment including in the home and since then no less than 47 Council of Europe member states have followed suit and committed themselves to putting an end to all corporal punishment.

But after years of research showing the damaging effects of corporal punishment, it is still seen in many places as perfectly normal to hit a child.  The idea of punishing children this way reflects an old fear of losing control over the child, he says, adding: “I have often been asked how one is supposed to make children obey if one cannot hit them. The answer is: with words”. He is quite right.

By hitting a child to drive a message home, that child learns it is acceptable to use violence to resolve disagreements, instead of being taught to listen and discuss.

He goes on to list three central arguments that summarise why we should not allow children to be beaten.

First, he observes, it is both a human rights and a legal imperative, with both the Council of Europe norms as well as the UN convention on the Rights of the Child requiring that children should be protected from all forms of physical or mental violence.

Secondly, he points out that people react strongly when an adult is beaten, and “would be thoroughly upset if a heated discussion ended with the opponent giving us a smack across the cheek”. Taking that as a yardstick, he questions why it should be acceptable for children to be hit, especially by someone they depend upon?

And finally, he describes corporal punishment as “humiliating”, representing an attack on the self-esteem and self-confidence of children. It demonstrates disrespect for their human dignity and teaches them that violence is an appropriate way to resolve a conflict.

Malta would do well to heed Mr Hammarberg’s suggestions.