No unilateral action on Cola to be taken

The government will not be taking any unilateral action about the cost of living adjustment and any change had to be in agreement with unions, employers and the government, Finance Minister Tonio Fenech said this afternoon.

Speaking during a news conference during which he launched the pre-budget document, the minister noted that the call for a seven euro weekly increase could be premature at this stage because the government's analyses showed this to be more realistic at five to six euros at this stage since inflation was easing.

He said that competitiveness was the main issue in the current economic climate but the COLA debate raised by employers focused on one aspect and ignored the rest.

The document contains an economic analysis of the current situation and outlined the sectors the government wanted to address.

However, at first glance, it lacks detailed proposals of what government is prepared to look at for next budget.

Mr Fenech said this was because the government did not want to come up with a document containing pre-conceived ideas but it wanted to hear from the public what they were expecting.

The document, the minister said, deals with a number of areas that affect Malta's competitiveness, including improving labour market conditions, strengthening productivity, investing in education and training, increasing investment in infrastructure and addressing market imperfections.

On public finances, the minister said that the deficit this year was projected to be -3.8 percent. Adjustments to public finances could come from reducing recurrent expenditure, curbing investment or by increasing revenue through taxes. Although meausres addressing recurrent expenditure would lead to cuts, they were not enough. Public investment had to be sustained but social solidarity, he said, would remain a key factor for government.

The minister invited the public to take part in the debate on the document. He also presented a statistical exercise comparing the situation in Malta to that in other EU countries.Feedback may be submitted to budget2010@gov.mt .

www.budget2010.com.mt