The Malta Chamber of Commerce and Industry said today that the Budget proposals presented to the social partners in the MCESD were not sustainable for the country and the business community.

Chamber President Helga Ellul told a press conference this morning that among its own Budget proposals, the Chamber is proposing that the cost of living adjustment (COLA) in the forthcoming budget should be given as an allowance rather than as part of the salary.

She said the Chamber was not against the award of COLA, particularly to the lower-paid workers.

"But we certainly believe that the economic circumstances are not opportune for an unprecedented COLA without mitigating its adverse effects with other compensating measures."

The COLA this year is to be €6.06, the highest in 15 years - as calculated by the existing cost of living mechanism.

The Chamber warned that on the basis of a survey it had conducted, "hundreds" of jobs could be at risk directly due to the cost effects of such an increase. Most of the job losses were expected to be in tourism, followed by construction and manufacturing.

"It is unacceptable for the social partners to be pushed towards an unsustainable path in terms of competitiveness and employment, and labour flexibility measures need to be included to offset the added costs to business," the Chamber said.

It also argued that the COLA mechanism should be reviewed by a pre-specified date.

In other Budget proposals, the Chamber called for more productive hours of work, a moratorium on all government-induced fees and tariffs and for performance bonuses to become pensionable, in order to allow better flexibility in the wage bargaining process.

"The package of proposals put forward so far in the Malta Council for Economic and Social Development for the endorsement of the social partners is not sustainable for the country and the business community," the Chamber said.