Minimum wage increase hinges on economic growth - Muscat

Speaking during a special broadcast of Manwel Micallef's TV programme on One, Joseph Muscat attempted to deflect criticism at Labour's recent stand on not increasing minimum wage.

He noted that the PL's decision to not push for an increase in minimum wage was a "controversial moment" and acknowledged the widespread surprise at the PL's adoption of a policy position uncharacteristic of a labour party.

Muscat however defended the decision by saying that "we analysed our priorities, and decided that the priority for the current situation is economic growth. If this is not so, there will be problems with regards to workers rights, job creations, and the sustenance of the welfare state."

Muscat also noted that during discussions with trade unions, the PL was told that the minimum wage increase is a priority and it should happen as a first step. "We disagreed," he said however. "We responded that we think we first step should be generating economic growth."

Once this happens, Muscat said, "we can reconvene, and move onto other things, such as increasing the minimum wage. But adding further pressures on employers and businesses now will lead to an increase in black market employment and more precarious employment."

Muscat was flanked by Gianni Pittella, an Italian politician and MEP for Southern Italy and First Vice President of the European Parliament.

A member of the Italian Democratic Party and and the Socialists and Democrats (S&D) parliamentary group, Pittella gave his endorsement to Muscat's election campaign, while also speaking about how the EU is handling the negative financial climate.

Pittella hit out at the path of austerity adopted by the Council of Europe under the leadership of German Chancellor Angela Merkel.

"Austerity is the kiss of death. Whatever it touches, dies," he emphasised, comparing it to giving aspirin to a patient suffering from gastric flu. "If it goes well, he'll get an ulcer, if not, the ulcer will bleed."

He said that austerity led to recession, economic slowdown, and a drop in consumption across the EU.

He added that the European Parliament's position is clear: need to increase economic growth and social solidarity, he said, adding that there are vast economic swathes which require assistance and employment.

"We need a grand alliance to build this result. A European plan of millions of Euros to fund research, education, small business assistance, Erasmus projects and energy and communication grids. We have the solution: launch the Eurobonds," he said.

He insisted that the launch of Eurobonds could generate the funds for this 'grand plan' "which even Malta would benefit from."

Muscat took the opportunity to reiterate Labour's overture to the business sector and the upper income classes, insisting that Labour's plan is to leave business "free to work" while also driving down bureaucracy and energy prices to ease the pressures off businesses.

Muscat said that Labour's plan for economic growth should be based on both the private sector and the public sector, while also unreservedly emphasised the need for the Labour Party to be in favour of collaboration with the private sector.

"Being pro-business means you are pro-jobs," Muscat said. "And being pro-jobs means that you are committed to improving the standards of living of the workers."

He also reiterated the promise that any decreases in energy prices would not come hand-in-hand with other, less visible, tax increases.

Speaking about the EU safety mechanisms and the controversial bail-outs to ailing member states such as Ireland and Greece, Muscat said that Labour did not oppose the bailouts because of its "social responsibility."

"If we were going to be populist, we'd come out and say no. But we were responsible," he said, adding that however now the situation "requires a measure of flexibility" in terms of the freedom that individual member states are allowed to find solutions to their own problems.

Muscat said that in Malta's case, Air Malta is a crucial asset to the local economy that was however being stifled and hampered by EU regulations on state aid. "Instead of allowing Air Malta to survive responsibly, EU rules do not allow for the necessary assistance," he said.

He said that now is the time to revise the rules to allow for the special circumstances that EE countries might find themselves in, and not impose 'one size fits all' rules across the board.

Muscat also reiterated pledges that the electoral programme Labour will eventually present will be credible and sustainable that will primarily focus on economy growth.

He also expressed agreement with increasing democratisation in EU structures, insisting that 'closed doors' meetings represent an obstacle in this regard. He said that if this is not addressed, European elections will become less and less relevant as more and more people will be "alienated by the EU."

While emphasising that the EU needs to provide more social assistance and insisting that it is "unacceptable" that 20 million Euro in European Social Cohesion funds remain unspent, Pittella also said that the youth participation and involvement is crucial.

"You cannot say 'you made a mistake' unless you enter the field," he said, calling on youth to become active citizens and take ownership of the political agendas that will affect their futures.

Muscat also reiterated Labour's commitment to further supporting disabled people. He conceded that this segment of the population is indeed "restricted" but insisted it is no less deserving of the assistance it needs.