Parliament postpones vote on PN cost of living motion

An parliamentary motion proposing to exempt COLA from income tax will be voted on another time after the Nationalist Party requested a division of votes.

Parliament discussed a motion filed by the PN on Thursday highlighting cost of living as a major issue affecting Maltese and Gozitan citizens, particularly those with low and middle incomes.

In its motion, the PN proposes exempting COLA from income tax, providing tax credits for SMEs and creating a national fund to support importers and exporters in reducing cost burdens. The motion also proposes shifting Malta’s economic model from population-driven growth to innovative, high-paying sectors.

However, the government put forward an amendment to the motion reframing the PN’s main arguments.

In the proposed amendment, the party’s claim that inflation negatively impacts low- and middle-income individuals is replaced with a statement that inflation is a global issue, but the government’s strategic actions have mitigated its effects in Malta.

The amendment also replaces multiple preambles with statements highlighting Malta’s stable energy prices, increased social benefits, targeted support for low-income families, and lower inflation rates compared to previous Nationalist administrations.

The Nationalist Party went on to file a counter-amendment seeking to entirely revert the government’s proposed changes and restore the original motion. It removes all government-framed arguments about inflation control and subsidies and reinstates the opposition’s critique of the rising cost of living.

When the government’s amendment was put to a vote, the Nationalist Party requested a division of votes, which is when the individual votes of each MP are taken down. As is practice, the Speaker declared that the division of votes will take place during another plenary.

Thursday’s debate on the motion was opened by Nationalist MP Ivan Castillo. He said the party was filing this motion because the cost of living problem “can no longer be swept under the carpet”.

He referred to a Central Bank report that said the share of Malta’s national income going to workers has declined significantly over the past three decades, with Malta now ranking among the lowest in the euro area.

The report concluded that although the decline is partly driven by increases in productivity and technological progress, which reflect “positive economic development,” the drop in labour share may also be “indicative of higher income inequality”.

On the government side, Prime Minister Robert Abela was first to speak. He defended the Labour Party’s economic model, which he said has steered the country through a pandemic, geopolitical conflicts, and global inflation.

He pointed out that the Nationalist Party voted against the government’s Budget for 2025, which promised pension increases and a generous tax cut.

Abela said the motion might have made more sense a year prior, when the inflation rate was high but starting to recover. At the time, the government launched Stabbilta, a price stability deal that eased prices across 15 food categories.

Beyond this, Abela said the PN lacks the credibility to talk about cost of living after it proposed liberalising Malta’s energy distribution network. This proposal came at a time when energy prices were skyrocketing, but the government introduced subsidies to keep prices at bay.

When it was PN leader Bernard Grech’s turn to speak, he accused the government of being cut off from reality. He said the aim of the motion was to discuss the cost of living issues Maltese people are facing. “The government isn’t interested in reality, it only cares about itself.”

He said there are 3,000 people in Malta living in garages, and 400 people sleeping rough. “How can you go to sleep tonight when 3,000 people today will sleep in a garage?” he asked MPs.

Grech also noticed the poor attendance among government MPs for Thursday’s debate. He said the prime minister left exactly after he finished his speech, and did not stay to hear his own ministers talk about the issue.

The other MPs who spoke during the debate were Ivan Bartolo (PN), Clyde Caruana (PL), Albert Buttigieg (PN), Miriam Dalli (PL), Jerome Caruana Cilia (PN).