Finance minister Tonio Fenech
Finance Minister Tonio Fenech has hit out at criticism by Labour leader Joseph Muscat, accusing him of "delighting in partisan politics" after the government rebutted recommendations by the European Commission to raise retirement age and tag the COLA to productivity gains, rather than inflation increases.
Labour said the European Commission's calls to Malta to raise retirement age and tag the Cost Of Living Adjustment mechanism to productivity gains were down to the Prime Minister's incompetence.
"These are the same country specific recommendations the EC had already made in 2011, to which the government did not raise any objection. This has lost Lawrence Gonzi all credibility to fight his case in the face of the new recommendations for 2012," Labour said in a statement.
"The government's credibility is now undermined... Gonzi's position is a dubious one, and is based on convenience, not conviction. It means GonziPN will raise the retirement age after the elections."
In a rebuttal, Fenech defended the government's clear position against the EC recommendations. "The government has been clear in its position on the EC recommendations. We are reforming pensions in agreement with social stakeholders, and we don't think it makes sense to abandon this process. We are also in agreement that COLA is the result of agreement between all social partners and is one of the main pillars of industrial relations in this country," Fenech said.
Fenech accused the Opposition of making dangerous statements and alluding to change COLA twice a year - something the General Workers Union is proposing - or even reduce retirement age.
"The EC's country specific recommendations this year are not the same as 2011's, as Labour is saying, because the Commission wants us to remove the price impact on COLA from imported goods, which the government has not accepted," Fenech said of the cost of living adjustment.
"On pensions, the Commission demanded an acceleration in the increase of retirement age, when government studies based on the Commission's methodology of life expectancy shows this does not need to happen before 2029."