Just in time for the onset of the government's pre-budget negotiations with the social partners comprising the Malta Council for Economic and Social Development, another battlefront in the years' old cost of living adjustment war opened up once again this week.

First there was a press report earlier this month claiming that next year's adjustment was being pegged at a €1.16 a week increase, then last Wednesday it was confirmed that next year's COLA would be only half that at 58c.

Now 58c is a paltry sum indeed and since the news broke the figure and what it can buy you has been lampooned over and over again. At 58c, the annual increment is more an issue of a token adjustment that will, in reality, make a difference only to society's least disadvantaged, who should, after all, be receiving other forms of more meaningful assistance.

Employers, who at the end of the day are the ones who dip into their pockets to actually pay the yearly increment, have welcomed the news. The Malta Chamber of Commerce Enterprise, for one, called on the government to confirm that Budget 2015's COLA will be pegged at €0.58 - a figure the Chamber said matches its own calculations and in line with the formula used to calculate the adjustment. The Chamber said that according to the formula and the practice used in previous years, next year's COLA increase should actually stand at 58c, and it called on the government to confirm this figure for 2015, which the Labour Party did that day.

Employee unions, in contrast, are sceptical. The UHM, for starters, is demanding answers, FOR.U.M. described the lowly increase as "unacceptable" but the GWU has so far not weighed in with its verdict.

The Opposition, on the other hand, had plenty to say and called on the government to take steps to increase the adjustment - recalling how when in 2010 the COLA had amounted to €1.16 the Labour Party, then in Opposition, had taken to the streets of Valletta in protest. The average COLA during the previous PN administration had, the PN said, amounted to €3.84 a week.

The Opposition also raised the point that, on the same day, the European Commission had requested more information on Malta's draft budget, and questioned whether a climb down from the original €1.16 figure had been a demand from Brussels.

In a reply, the Labour Party said that the Opposition's statements were a confirmation of the increase in the cost of living under the previous administration. This government, it said, had started to mitigate against that increase with the reduction in water and electricity rates, stability in fuel prices, reduction in income tax, free childcare, car registration tax refunds and stipend increases, among others - bringing inflation to the lowest rate it had ever been in the past 30 years, which is why next year's COLA would be so low.

Faced with this yearly tussle between the government and Opposition and between employers' bodies and workers' unions, perhaps the time has come for the government to do away with the COLA, or at least drastically revise the ways in which it is worked out.

This week, the Chamber reiterated its call for a revision of the COLA formula, saying that the figure is the result of a "basic and outdated formula which in the interest of employers and employees alike should be fine-tuned to include measures for both inflation and productivity".

This is, by far, not the first time the country has heard such a call.

The European Commission has in the past called on Malta to rethink the forever controversial COLA given out in each budget to compensate workers for the past year's inflation.

In the EC's view, and since the COLA effectively adds to the minimum wage, the adjustment "may further hamper the competitiveness of the labour-intensive sectors".

While the EC had not advocated an all-out scrapping of the mechanism, it suggested that it is perhaps tweaked to a certain extent. It also observed a degree of imbalance in the increment being given across the board, having noted that the COLA wage increases are "proportionately higher at the low end of the wage spectrum".

But it is not only the European Commission that holds such a viewpoint toward this annual bone of contention between the trade unions and the government. 

Former Central Bank Governor Michael C. Bonello had called for a similar rethink when he remarked 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 struggling manufacturing sector.

The International Monetary Fund (IMF) has been calling on the government to do away completely with the COLA for years now in its own annual assessments of the Maltese economy, where it has repeatedly called for the COLA to be replaced with "productivity-linked wage increases at enterprise level".

Malta's employers, meanwhile, have long been slamming the COLA's effect on the country's wage levels and the very closely associated and essential competitiveness levels. They have also echoed the IMF's call for productivity-linked wage increases to replace the COLA, and have also in the past unsuccessfully suggested that the government foots part of the COLA bill, instead of the increment being absorbed completely by employers.

It is time for a novel approach to this seemingly age old issue. Perhaps means testing could factor into the COLA equation. After all, does it really make sense, as an example, for a person earning €150,000 a year to receive the same cost of living increment as a person earning €15,000?

The writing is on the wall, spelt out clearly for all to read and one year or another push will eventually come to shove. And it is far better for a government to be so bold as to take a daring step before it is forced to do so.