MEA calls for increase in effective retirement age

Next year’s Cost of Living Adjustment (COLA) is expected to be in the range of €5 and €6, Malta Employer’s Association (MEA) director general stated.

On Tuesday, the MEA broke down its proposals for Budget 2025 during a press conference. Here, MEA director general, Kevin Borg was asked whether he had an indication of what next year’s COLA will be, to which he responded that during talks with government, it emerged that the COLA increase will be in the range of €5 to €6.

This would mean that the COLA increase would be halved when compared to the previous year, as the adjustment amounted to €12.81 in 2024.

Meanwhile, the MEA explained its proposals which were divided in 11 sections, with the labour force receiving the most attention.

Here, the MEA called for a rationalisation of the local labour force, urging policy-makers to maximise the value of the country’s human resource through innovation. The association noted that, “the public sector is riddled with underutilised personnel that can be more productively employed,” noting that such rationalisation will reduce the need for the importation of workers.

Among the MEA’s proposals on the labour force, they once again urged the “prolonged retention of valued local talent” through government’s strengthening of measures which incentivise workers in retirement age to stay active in the labour market.

The MEA called for increasing the effective retirement age while discouraging early retirement through fiscal measures, as well as raising awareness on “the importance of contributing further to the labour market.”

The MEA further proposed strengthening career guidance structures, noting that such structures could empower young people to make better-informed decisions about their future careers.

On the general state of the economy, the MEA warned that the country’s economic trajectory is currently focused on maximising numbers without proper planning, adding that this has contributed to the deterioration of quality of life in the country.
The association urged an immediate shift towards a model that emphasises quality, innovation, and sustainable growth, especially in sectors that have reached saturation.
On tourism, the MEA underlined the need for strategic direction in the sector, noting that, “Inadequate long-term planning has led to a general deterioration of Malta’s attractiveness as a tourist destination.” Here, the association proposed lowering the VAT rate for catering services.

Malta’s infrastructure was also discussed, as the MEA spoke of the crucial need of long-term investment in energy supply, water resource management, and intelligent traffic systems, with construction activities focused on upgrading infrastructure.

The association welcomed the reduction of taxes for middle-income earners, although it warned that more disposable income could have unwanted inflationary effects. “The MEA recommends conducting a scenario-based study of projected tax revenues from adjusted tax bands and publishing the reasoning and objectives behind these tax revisions.”

On the subject of good governance, the MEA urged full transparency in government contracts, including disclosing positions of trust and their remuneration.