Everyone should, at minimum, receive the full Cost of Living Allowance (COLA), PN spokesperson for Finance Jerome Caruana Cilia has told The Malta Independent.

Asked about concerns raised by The Malta Chamber of Commerce, which put forward a proposal that workers who have received a raise in their workplace should not be given the full COLA, whilst the full COLA should be given to low-income workers, Caruana Cilia said that he believes everyone should be given, at minimum, the full COLA, irrespective of any salary increases already received.

“Currently we are facing record inflation figures. In July, we reached a whopping 6.8% annual inflation rate with the highest increases being registered for food and other basic every-day essentials. An increasing and extremely high cost of living impacts everyone, yet clearly, the most affected are those at the lower end of the income scale,” Caruana Cilia said.

“I fully appreciate the concerns raised by the Chamber, particularly as businesses are only just re-emerging from two difficult years related to the pandemic. In this context, the government has to cushion the financial impact on local business by helping out the private sector so as to ascertain that they remain competitive and therefore operative,” he said.

Chamber of Commerce President Marisa Xuereb told The Malta Independent on Sunday in an interview that the moment the yearly COLA increase – which is expected to be of over €10 euro – is given to everyone, then prices will increase along with it because businesses need to make up for the increase in wages.

He said that there needs to be economic diversification so that the country creates industries which can withstand these externalities.

Caruana Cilia also said that the country needs proper investment in productivity to ensure that labour cost increases are linked to productivity gains.

Asked about concerns over the impact the COLA rise could have on businesses, Caruana Cilia said that the main concern is that businesses will have to impose the extra cost of the full COLA as yet another expense on goods, if they are not assisted by government.

“This will in turn contribute to further inflation and higher prices and pressure on consumers. Those worse affected will be pensioners, low-income earners and the financially vulnerable in our society,” Caruana Cilia said.

He said that government must use public funds in a strategic, coordinated, and controlled manner, for the common good and “not let public finances be frittered away by the friends of friends close to the centre of power.”

On Saturday Prime Minister Robert Abela said that the government will not tamper with the Cost-of-Living Allowance (COLA), even if the amount will increase when compared to the past years.

Caruana Cilia was also asked about talks and negotiations regarding next year’s COLA. He said that ten months have passed and the government still has not held any discussions with the Anti-Poverty Forum - which comprises of 16 local organisations - after promising to provide additional assistance to vulnerable people over and above COLA, “let alone published any details of this new independent mechanism.”

“Discussion is key to achieving consensus. The government is obliged to ensure there are frequent and productive meetings with all social partners. The Labour government must at least live up to its promises and assure a better quality of life in these challenging times,” he said.

“During last year’s budget speech, the finance minister announced that discussions were to be held on the launch of a new mechanism over and above COLA, through which the government will provide additional assistance to vulnerable people and families when inflation is high,” Caruana Cilia said.

He said, however, that no discussions have been made with the Anti-Poverty Forum, and that government needs to commence serious discussions and negotiations to introduce a minimum living income mechanism so as to ensure a decent standard of living and a better quality of life.