Cost of living to rise by €1.16

Employees will receive a cost of living increase allowance of €1.16 per week next year. This is the lowest awarded for many years and is way below the €5.82 granted for this year, with the lowest allowance awarded in 2004 of €1.75.

30 September 2010, 12:00am
by Rachel Zammit Cutajar

1 min read

The increases in prices of energy, gas and foodstuffs has been offset by the fall in price of fruit, vegetables and clothing accounting for the low figure quoted by the COLA.

The figure to be announced in the next Budget is not yet fixed, though social partners and economists are not expecting any significant change.

The allowance is based on change in the retail price index over the last year. Different products and services are monitored with different weighting given to each item. Products and services monitored remained relatively stable throughout the year according to the National Statistics office.

The figure quoted by the COLA has created a great deal of disagreement between social partners, namely employers and trade unions. Employers declared that if an allowance of the predicted €5 - €7 was awarded job cuts would ensue. Trade unions on the other hand said the allowance was not satisfactory as employees should be compensated for the increase in cost of living over the year.

Last April Michael Bonello, Central Bank Governor, called for a revision of the COLA mechanism which he claimed was affecting the country’s competitiveness.

Rachel Zammit Cutajar graduated in economics from the University of Malta...