Herman Grech
Cost of living increase: €6.06 a week
New incentives for exports, training
All employees will benefit from a weekly €6.06 increase from 2009 in cost of living compensation, The Sunday Times has learnt.
The figure, to be announced in the November 9 budget, will be the highest to be given to workers in the past 15 years, statistics show.
The allocation is expected to be welcomed by trade unions, but not by the Malta Employers' Association (MEA), which had proposed that the government should foot half the cost of living allowance (COLA) paid by the private sector.
The €6.06 figure was derived through a specific formula worked out by the Retail Price Index mechanism which measures price changes of different products and services throughout the year through a system of weighting.
Sources said pensioners would pocket the full COLA increase for the third year running, and not two-thirds of it.
During the budget, Finance Minister Tonio Fenech is expected to make it clear that the government is committed to continue offering assistance through Malta Enterprise schemes to companies which find themselves in difficulty.
The government is also expected to unveil new incentives for industry, especially export-based firms, as well as more training programmes for workers.
The MEA had said it was against the current mechanism that linked wage increases to inflation, and made proposals to tackle what it described as the "destabilising effect" of COLA in times of recession.
The existing COLA mechanism provided for circumstances where increases may not be given in full in exceptional circumstances.
MEA's proposals for the government to meet half of the private sector's COLA bill was estimated to cost €12 million. But Mr Fenech had made it clear that with the government deficit expected to rise to around four per cent it would be very difficult for the government to pitch in. An MEA survey published last month claimed that about 20 per cent of companies expect to cut jobs if the cost-of-living adjustment ranged between €5 and €7 weekly in 2010.
The survey was conducted among the association's members and dealt with the impact of COLA on businesses during a recession. Economists contacted at the time had argued there was an element of scaremongering tactics among employers, though they admitted that the fears were partially justified for the export and tourism sectors.
Mr Fenech had told The Times business section that the COLA mechanism brought industrial stability and urged employers not give in to demands by unions for wage increases over and above COLA during negotiations.
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13 Comments
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Mark Galea
Oct 19th 2009, 09:46
@Galea. L
I suggest that the University Faculty of History would be very interested in your analysis of recent and contemporary political history.
victor pulis
Oct 19th 2009, 08:28
@A. Zahra de Domenico
Just for the record I don't believe the opposition got the euro 290 increase as well. Do you mean to say that all government employees should get that kind of increase which by the way came into effect months ago? Do you feel that at the moment when we are passing through the worst recession in recent history the hefty increase was justified especially when one considers the fringe benefits enjoyed by our MPs?
Galea. L
Oct 18th 2009, 21:29
Mark Galea
I suggest that the University Faculty of Mathematics would be very interested in your Theory.
A. Zahra de Domenico
Oct 18th 2009, 18:51
@ V. Pulis
Kindly note that government and opposition MPs, ministers' and the leader of the opposition's salaries are pegged with those of the civil service. So, if you are a government employee and you get a salary increase, government and opposition MPs, ministers and the leader of the opposition automatically get an increase also. In this respect we have a very fair and transparent system in Malta, unlike other countries.
joe scerri
Oct 18th 2009, 17:39
This amount may at first glance appear as a generous amount. After deducting taxes it amounts to the grand sum of 17 euros (LM7.37) a month. LOL
Malcolm Seychell
Oct 18th 2009, 17:21
One must try to find a balance when it comes to the increase in COLA.
Many of you seem to forget that the COLA is given by the private company and not the government directly. I believe that at this moment not all companies can afford to experience this wage increase.
Just a small company with 10 employees will see its salaries rise by Eur3151 in one year apart from other increases such as water and electricity.
Galea. L
Oct 18th 2009, 15:40
Gonzi
Why should the rest of us lesser mortals not have the same euro 290 weekly increase in wages/salaries/pensions as the PM, your Minsters and PS have had? If you cannot manage with your fantastic salary, how do you expect us to manage with our miserly wages/salaries/pensions?
Mark Galea
Oct 18th 2009, 15:08
I ask why the increase is given to everybody ... if it is given to everybody, then it is not an increase
Lorna Xerri (Uni)
Oct 18th 2009, 13:22
Oh Goody Goody i can afford two tins of baked Beans soon. Thank Thank Lord for small mercies, i am not complaining are you? besides Daddy got plenty to spare.
Mary Mizzi
Oct 18th 2009, 12:33
WOW...., one week's future cost of living increase just covers the increase in a gas cylinder price over the past year.
Who waits for the budget nowadays when increases in prices are all the year round and we have a Government that cannot even buget a utility tariff for the whole year......
G.Schembri
Oct 18th 2009, 12:13
6.06 euro is hardly enough to cover the bus fare increase for a person who takes one bus to work and back daily.
cecil herbert jones
Oct 18th 2009, 11:46
Has the cost of living really increased by a mere €315.12 a year? The water & electricity bills increase alone are higher. What about the price of petrol, groceries, oh and the instant price-hike that took place the minute the Euro was introduced?
victor pulis
Oct 18th 2009, 11:00
Did the Retail Price Index mechanism also work out the euro 290 weekly increase in salary enjoyed by the ministers and parliamentary seretaries a few months ago?