Żminijietna – Voice of the Left views the comments given by Josef Bonnici, Governor of Malta Central Bank, during the Central Bank’s annual report as a direct threat towards the present mechanism of COLA, the cost of living adjustment mechanism.

The idea that the cost of living compensation should be strictly tied to productivity has nothing to do with the basic premise of COLA as this was introduced to compensate for increase in cost of living.

The Governor’s arguments are dangerous as this will revive the same chaotic situation as what had happened in the late 1980s to the Phoenicia Hotel workers when the management refused to give a cost of living increase. COLA was the direct result for the solution of such situations.

Żminijietna believes that productivity can be increased through progressive social policies such as improved working conditions, a rise in the minimum wage, increase in job training and other work incentives, such as more childcare facilities and a work-life balance.

The Governor’s neo-liberal way of thinking is similar to the European neo-liberal strategy, which is resulting in an increase in the working poor and deregulation of the labour market. Recent elections in France and Greece have shown that this model is being rejected by the masses.

COLA should be revised so the cost of living adjustments are more realistic.