Union calls for MCESD’s involvement on prices set by regulators

The Union Haddiema Maqghudin has proposed a non-taxable cash payment payable to families and pensioners to cushion the inflationary rise of prices from October 2010 onwards, in proposals it tabled at today's MCESD meeting.

The UHM said the cash payment should be paid by not later than 31 March. It also said the cost of living adjustment should not be calculated to the nearest 25c but given in its entirety.

“The COLA should not be based on inflation rates between October to September the year after, but between January and December so that the inflationary element is more factual,” the UHM said.

The union also called for a new MCESD subcommittee that evaluates the relationship between the base wage used to calculate the COLA and the social wage that formed part of the 1990 incomes policy.

The union said a new household budgetary survey should take place between July 2011 and 2012, so that a new retail price index weighting frame enters into force by 2013.

The UHM said it wanted greater involvement of the MCESD in the approval of prices by regulators such as the Malta Resources Authority, and a new authority for competition and consumer affairs. It also asked that the reduction in medicine prices undertaken by government is spread to other products and services that have been hit hard by inflationary rises.

The Malta Council for Economic and Social Development (MCESD) meeting convened today Friday was hastily called by government following pressures by trade unions in the wake of the sudden hike in fuel costs announced on 1 January.

The GWU said it would be recommending that government commissions another Household Budgetary Survey that gives more weighting to fuel and energy prices than it currently does.

Employers have reacted immediately to the statements by unions to amend the COLA mechanism, warning that they will instruct their members not to pay out any additional cost of living increases even if it is enforced on them by government.

The Malta Employers Association has blasted a call by General Workers Union and Forum to revise the cost of living allowance, by saying any revision to the mechanism was “out of the question”. MEA said that companies were also hit hard by the increases in fuel prices, and that besides COLA, employers are also facing higher social security contributions as part of the pension reform.

“Raising COLA at this stage will only create further inflationary pressures and will contribute towards a wage price spiral that will have a negative effect on the country’s competitiveness,” the MEA said.

The MEA warned it will instruct its members not to pay out any additional cost of living increases even if it is enforced on them by government. “There have already been precedents in the recent past when employers were forced to pay more than what was stipulated in the COLA agreement."