Measures compensating 58c COLA increase 'to be announced in Budget'

58c COLA increase 'compensated' by Budget measures.

Measures compensating a miserly 58c cost of living adjustment will only be announced during the presentation of Budget 2015.

"It would be irresponsible of me if I were to announce these measures now, just a few weeks before Budget 2015," Prime Minister Joseph Muscat said.

Yesterday, Muscat admitted that "a 58c compensation for a higher cost of living the previous year, is not enough".

Reiterating that the allowance was worked out by a mechanism agreed to by social partners, Muscat said the government will not play around with the mechanism.

"This formula will only be changed if and when there is consensus amongst social partners," he said.

In a separate reaction, the Ministry for Finance said that it was “ironic” that the Nationalist Opposition was “attacking the COLA mechanism”.

The ministry said the mechanism had been established under a Nationalist administration and the allowance is not determined by the government.

“The Opposition is trying to give the impression that the cost of living allowance is decided by the government when it knows well enough that it is determined by a mechanism, based on the inflation of the previous 12 months,” the ministry said.

It added that “lauding a higher COLA compensation meant boasting of higher prices”.

The ministry said that wages increased by over €154 million in the past year while the average wage increased by €8.60 during the first half of 2014 when compared to the previous year.

In reply to questions by the press, Muscat said an investigation into a €35 million PV contract awarded under the previous administration was launched "to verify the contract".

"It was an onerous contract and I wanted all facts to be verified before signing it," Muscat said.

He said that the high feed-in tariff had now become "a secondary issue".

"Without going into the merits of the case, we now have a contract awarded on a document which was not even verified," he said, with reference to the unsigned bank document presented by Spanish company Solarig.

Yesterday, Opposition leader Simon Busuttil said he "would take steps" against Nationalist MP George Pullicino if he were to be found guilty of any irregularities.

"But if [the Police] find nothing against him, then the Prime Minister and the Energy Minister must shoulder responsibility," the PN leader said.

In a reaction, Muscat said he will not turn the police investigation "into a political issue".

The police investigation was launched following irregularities discovered by the IAID.

"There are facts that have been established and clarifications sought by the MFSA. Now, it has been confirmed that the Spanish bank is not in a position to confirm the authenticity of that bank document," Muscat said. 

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