No mid-stream COLA adjustment - minister

There will be no mid-stream change in the cost-of-living adjustment (COLA) mechanism because both the government and the other members of the Malta Council for Economic and Social Development (MCESD) have agreed that the current level of inflation was not excessive.

Finance Minister Tonio Fenech said this in reply to a number of supplementary questions in Parliament by opposition MPs Leo Brincat and Joe Mizzi.

Mr Fenech answered a parliamentary question by Labour MP Anthony Agius Decelis, who had asked if any study had been carried out to see how the people had been affected by the price increases for oil and its derivatives.

Mr Fenech said that, as had been announced in the last budget, the Economic Policy Division had carried out a study on the impact of inflation, which study had been discussed at the MCESD. The study had considered the impact of essential products which included, but were not limited to, oil and its derivatives.

The study had shown that in spite of the increases, which had largely been the result of price increases on international markets, the impact on inflation had not been extraordinary. The study had concluded that the government should hold on to the COLA mechanism when calculating any increases to be announced in the Budget.

Opposition MP Leo Brincat asked the minister about the government's thinking on Brussels' request to Malta to accelerate its pensions reform and amend its cost-of-living adjustment mechanism by the end of next year.

See:

http://www.timesofmalta.com/articles/view/20110608/local/Brussels-pushes-for-reforms-by-next-year.369494