Why give a pay rise so that inflation rises? Reducing costs is equivalent to a pay rise as it leaves cash in hand and also brings a stable inflation rate.

We may have the fifth or sixth best economy in the EU but we also have one of the highest inflation rates in Europe. So what is this telling you? Joseph Muscat was right to say that by reducing costs this will stable inflation. Labour’s economics are good.

By reducing costs, as Muscat said, the economy is stabilised and one is left with more spending money, making us more competitive. When the economy is on its feet, part of the reduced costs of companies will be later (I hope) transformed into wages, which will generate cash flow and more sales and profits for our establishments.

It will also increase government revenue through tax and VAT.

However, this will still leave the people with spending power, which will also generate growth and employment and a stable rate of inflation.