Watch: Chamber Of SMEs Proposes Major Reform To Malta’s COLA System
Malta’s COLA system, which adjusts salaries according to the cost of living, has been in place for decades but the Chamber of SMEs believes the time is ripe for a reform.
Speaking to Lovin Malta, Chamber council member Beppe Muscat said the reform should be threefold.
1. The entire mechanism that calculates COLA should be revisited
“Government should bring in experts to revisit the whole mechanism and the results it’s been giving us because over the past ten years we’ve seen that it hasn’t been giving us consistent results,” Muscat said.
2. A national COLA fund should be set up, which all businesses will contribute to based on their revenue.
“Last year’s €12 COLA increase implied an additional cost of €600 per employee,” Muscat warned.
“This is unfair because the cost of living isn’t an issue that employers have brought about but it is a national and international issue, and the weight shouldn’t be lifted solely by employers.”
“We’re proposing the creation of a COLA fund that all businesses will contribute to on the basis of their revenues, and by doing so every business will make a small contribution, as opposed to the huge burden that employers must lift alone as things stand today.”
3. A salary cap of €60,000 beyond which employees will not be entitled to COLA.
“As things stand, someone who earns the minimum wage gets the same COLA as the CEO of a listed company earning hundreds of thousands,” Muscat pointed out.
“We propose that COLA shouldn’t be paid beyond a certain level of salary, so that way even the highest-income earners will contribute to this cost. If needs be, lower-income earners should be assisted even more.”
Do you agree with this proposed revamp?
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