Beating inflation: PL series of proposals - Muscat against linking COLA to productivity

Labour leader Joseph Muscat today made a series of proposals to counter inflation and said that it was crucial that there was complete transparency in services provided by the government, that inefficiencies are reduced, that excessive bureaucracy was stopped and negligence was countered, so that consumers would not end up paying for these inefficiencies.

In other proposals, made at a national conference on inflation, hosted by the PL, Dr Muscat called on the government to boost capital investment as a way to create productive jobs and yield value added for the country.

At the same time, the government needed to control wasteful spending. Importantly, it should not enter into unsustainable agreements, solely for electoral purposes.

The government needed to ensure that its reforms did not cause upward pressure on prices. Liberalisation should be a means not an end and should lead to real competition and thus lower prices. So far this had not happened, in, say, the transport sector such as the reform involving funeral cars.

The government itself needed to set the example. Now that the rent reform had been carried out, the government should consider social needs when it considered raising rents on its properties.

Dr Muscat said that corruption, wherever it was, needed to be countered because it too raised prices for honest consumers.

He said the government should seriously consider reducing personal and business taxes so as to raise value added and increase jobs.

Monopolies or quasi-monopolies needed tobe replaced by proper competition.

Privatisation, on its own, did not bring liberalisation or competition, Dr Muscat said. In many cases, government monopolies had been replaced by private ones. The PL was in favour of privatisation which yielded liberalisation, real competition and better service. It also felt that vital national assets such as Air Malta should remain in state hands.

The Labour leader also called for effective regulators, not least in the areas of energy and fuel.

He said that in such times of recession, the government should consider a freeze on new or higher taxation or tariffs. The government also needed to respect its payment obligations because that caused pressures on suppliers.

He urged the government to tackle market imperfections, as in the case where prices of fruit and veg had increased, when so had supply.

He also reiterated his call for a new Consumer Affairs agency to monitor prices.

In his speech Dr Muscat called on the government to respect its commitments to keep medicine prices in check and said an official website should feature recommended retail prices of food and medicines as well as other selected products.

He also urged the government to use the opportunity provided by the EU to reduce VAT on certain labour intensive sectors such as restaurant services in order to boost competitiveness.

On the Cost of Living Adjustment (COLA) Dr Muscat reiterated that salary adjustments should be based on prices since basing them on productivity caused uncertainty.

See reports on other speakers at the conference on

http://www.timesofmalta.com/articles/view/20090718/local/conference-discusses-maltas-high-inflation