Every now and again the COLA debate resurfaces. The government, through its employment minister, has informed the EU council meeting that Malta (which includes its employers) was determined (meaning no discussion warranted) to retain the wage indexation system because it guaranteed industrial stability. On the other hand, the minister acknowledges that increased productivity is a key element of sustainable development. It goes without saying that “increased productivity”, “sustainable development” and “industrial stability” do not function in isolation or in a vacuum and that the three are interrelated and interdependent.

While members of various commercial and industrial organisations debate the advantages and disadvantages in favour of a revised form of COLA, not a single one has came out with a specific proposal, at least as a basis of discussion. All agree that some form of revision is long overdue, but which form this revision should take remains in hibernation. The minister adds that “although we Government” agree that labour costs (not government costs) should be curbed to increase productivity (the how remains the golden question), “this does not mean we should do away with our wage structure mechanism”.

What is the relation, according to the minister, between unit labour costs and increased productivity? While productivity remains the main pillar for a successful business outcome, productivity without competitiveness is a mirage. The Governor of the Central Bank was courageous enough to warn us of the dangerous road we seem to be blindly or conveniently travelling. Yes, we need to look at the whole picture since discussing the individual ingredients out of context will only take us down the road to disaster. What is the point, when all has been destroyed, of throwing away the pieces and then rebuilding? As a doctor I believe that prevention should come before any attempted cure − if there is one.

We are getting used to successive governments making business pay for their failures and wrong economic policies, all in the name of short-term political gains. As small businesses fail and wind up, bigger businesses benefit and as these favour multinationals, slowly all business will end up in the hands of great corporations who themselves pose a huge threat to the state should they go bust. The stronger and bigger they become the greater their ability to stand up to political power or to lure politicians to their side. The ideal world, where Malta is concerned, should be a mix of small family businesses, small and medium sized industries and large industries. The world we are building is one made up of multinationals only: the results are there for all to see unless living on an island means only looking inwards.

What is the whole picture?

It is not workers’ wages or conditions. It is the burdens imposed on entrepreneurs and the business community that are unrelated to the business itself.

I need to be convinced why employers should be forced by law to shoulder a cost of living increase when the employers themselves do not have a say in such an exercise. Why should employers bear the brunt of political blunders when the politicians themselves are not held accountable for their own mismanagement, bad financial decisions, waste, abuse, wrong policies and ideologies? In reality, employers and the public bear the consequences in the form of additional taxes to make up for the country’s financial losses. Why are businesses burdened with unrelated costs? What would be better: to be burdened with such costs or for individual businesses to deal with their workers according to the results of their efforts and sacrifices? If workers in a factory work hard, shouldn’t they reap the fruit of their work by appropriate wage increases rather than by a cost of living increase? When a cost of living increase is imposed, it favours the big companies who fork out a frivolous sum compared to their profits, while it hurts the smaller ones who cannot afford even that meagre increase.

Businesses and the public have been burdened with hefty fuel price increases to make up for higher fuel costs and to cover the inefficiencies that have been mounting for years while successive governments, out of political convenience, have failed to address matters appropriately and in the nick of time. Should the taxpayer, including the businessman, have to pay for undeserved bonuses and the other generous perks now being dished out? Doesn’t responsibility carry accountability? Where is the logic that makes businesses carry the full burden of their workers’ families by having to pay for an ever-expanding pregnancy and maternity leave and reinstatement? Businesses have to employ substitute cover and then discharge when the mother eventually returns to work. Is there a social reason why maternity leave should not be borne by the state (the whole population) instead of individual employers?

Why should a worker who, let us assume after a good night out is somehow injured driving home in the early hours, be paid sick leave by the employer when the injury did not happen at his place of work? It is only fair that a worker injured at work be paid by his employer for however long it takes. It will make health and safety a number one priority in the interest of the worker and his family. Few people out there appreciate what bureaucratic and financial burdens an entrepreneur has to endure to set up a business. He buys the land on which he pays rent, taxes and interest on his loans. He pays for the plans, which he then has to submit to Mepa, pay to carry out the changes imposed and then resubmit. A host of government departments are brought into play, all with their rules and regulations. If you are lucky enough you might get approval after 18 months or so. Every step comes at considerable cost. Does anybody show any sympathy for the applicant who is trying to set up or expand a business which will finally lead to new employment opportunities, added productivity and taxes that go to enhance the common good?

Yes, we all have heard about bureaucracy being a great stumbling block. So it is, but not to competitiveness, however, but to setting up or expanding a business. Time is money for entrepreneurs! Can the politician understand this? Why should an entrepreneur plead and run after a minister or even a department employee to get what is his due? We seem to be still living in medieval times in this country despite the information revolution and all the benefits it is supposed to have given us in the 21st century.

Malta is crying for a system that facilitates investment, production and ultimately generates more revenue for the state, while at the same time holding accountable whoever abuses the system in any way. Let us start with the problem of COLA for a start.

I suggest that any increases should be related both to the rate of inflation as well as the rate of productivity. COLA shall be paid only when the rate of inflation reaches two per cent or beyond. When the percentage of inflation is lower in any fiscal year, it shall be added to the aggregate of the following year and paid out when the rate of inflation is two per cent or higher. Of course the existing arrangement of a COLA increase being linked to the minimum wage only should not be changed.

It is time for the talking to stop.