Karmenu Vella (left) with Labour leader Joseph Muscat in a meeting with the GWU. Photo: Ray Attard/Mediatoday
Opposition leader Joseph Muscat said he will be discussing a General Workers Union to hold a bi-annual review of the Cost Of Living Adjustment allowance, which the European Commission believes should be reformed and not indexed to inflationary increases.
Malta's COLA is a key pillar of industrial relations, but Brussels believes the annual increase in wages should not be tagged to inflation but on the basis of productivity gains.
In its electoral proposals to the political parties, the union is asking for a wage adjustment every six months, and for COLA increases to be non-taxable and not subject to national insurance so that the increase is full.
Asked whether he agreed with the GWU's demand, Muscat did not commit himself to a clear position but said the proposal was up for discussion.
Finance Minister Tonio Fenech has accused Labour of making "dangerous statements" on reducing retirement age and reviewing COLA twice a year without any consultation with social partners.
On his part, Muscat told the press during the opening statements of a meeting with the GWU that the PL would be discussing the proposal with the union.
"We are worried that both the Prime Minister and the finance minister put up no opposition to the EC's proposal for reviewing the way COLA is indexed. The EC's reommendations this year are the same as they were in 2011 and it is only now that the government has woken up from its slumber in its opposition, which I believe prejudices the government's position.
"Malta's situation merits a totally different position, and ours has been very clear on COLA."
Muscat told the GWU today that Labour's manifesto would be a realistic roadmap for economic growth "and not an endless wishlist of unworkable promises".
Malta has reiterated its opposition to the European Commission's Country-Specific Recommendations (CSRs) made last month about a further raising of the retirement age and a restructuring of the COLA (cost of living adjustment) mechanism.
Malta maintained its stance on the COLA formula which the Commission wants to change in order to remove the weighting to imported inflation. "If imported goods are removed which make up the majority of goods consumed in Malta, we will end up with no cost of living adjustment mechanism at all," Tonio Fenech said last week.
On the commission's recommendation to accelerate the pension reform and increase the pensionable age, Fenech said he reiterated the opposition expressed by Prime Minister Lawrence Gonzi during the EU summit held last week. Fenech said that Malta has no need to raise the retirement age beyond 65.
He added that no more changes to the retirement age need to be made before 2029.