Issue link: https://maltatoday.uberflip.com/i/1477075
2 NEWS maltatoday | WEDNESDAY • 24 AUGUST 2022 2 NEWS NICOLE MEILAK LOW-INCOME earners will get additional compensation to counter inflation after a second cost of living adjustment mech- anism targeting this group has been created, Clyde Caruana said. The Finance Minister said the new COLA mechanism, which is over and above the existing structure, was promised in the last budget and will start be- ing implemented from the next budget. The new mechanism par- ticularly targets lower-income groups, which are dispropor- tionately impacted by higher in- flation. Caruana said that he will be meeting with stakeholders in the coming days to share details on how this new mechanism will work. "We have the numbers, we know how it's going to work," he said. "I can assure you that when the time comes in the next Budget I will not only announce how the mechanism will work but it will be put into effect." He said that the regular COLA will remain as is, and admitted that the figure will be "quite ex- ceptional" compared to previous years. "When I reveal the rate, that rate must be given in full to employees. If employers want to achieve some changes, they have to discuss those changes at shop-floor level with unions. As minister of finance, the COLA I will be reading in the Budget speech has to be given in full, as it has been in past years," he said. In its pre-budget document the Malta Chamber of Commerce, Enterprise and Industry pro- posed that employees that re- ceive a pay rise in 2022, should not receive the full COLA incre- ment, but only the difference be- tween the COLA increment and their pay rise. But on Saturday, Prime Minister Robert Abela said in an interview on One Ra- dio that the COLA mechanism will not change and the compen- sation this year will be substan- tially more than previous years. Last year, the COLA was set at €1.75 a week for all workers, pensioners, students, and peo- ple receiving social benefits. The mechanism was agreed between all social parties back in the 1990s and is based on inflation as measured by the Retail Price Index. Workings show that at the current rate of increase in inflation, the adjustment will be around €10 per week, the highest in decades. The wage increases will come into effect in January. Caruana had announced dur- ing last year's Budget that gov- ernment will be drawing up a new mechanism that will work independently from the COLA when inflation rises sharply to address the needs of the most vulnerable strata. Low-income earners to get additional compensation, Finance Minister says PRICES continued to shoot up in July with the Re- tail Price Index measuring annual inflation at 6.8%, figures released by the National Statistics Office show. The RPI is the measurement used to calculate the annual Cost of Living Adjustment (COLA), which is announced in the budget. Inflation is an increase in the level of prices of the goods and services that households buy. It is meas- ured as the rate of change of those prices. Typical- ly, prices rise over time, but prices can also fall (a situation called deflation). The latest data shows that annual inflation in Ju- ly was 0.6 points higher than the previous month with food prices being a major upward driving force. This is the steepest month-on-month in- crease in prices registered so far this year. The Food Index, which includes restaurant ser- vices and take-aways, registered an increase of 2.5 percentage points in July when compared to the same month last year. Inflation shot up beyond the 3% mark in January and has continued on a steep incline as it squeezes pockets and erodes disposable income. MATTHEW AGIUS CARMEN Celilia Olivieri Delgado, born in Venezuela and bearing a Spanish pass- port, was arrested at the air- port yesterday, having arrived on a flight from Barcelona. Inspector Mark Anthony Mercieca charged the woman with importing an illegal drug and possessing it in circum- stances denoting that it was not for personal use. He told Magistrate Gabri- ella Vella that the police had been notified by customs that they had stopped a woman at the airport after a dou- ble-bottom was discovered in her luggage. The suitcase was then ex- amined and found to contain a substance, later tested and confirmed to be cocaine. She pleaded not guilty. Bail was not requested and the woman was remanded in cus- tody. The court also imposed a freezing order over the wom- an's assets. Lawyer Joseph Bonnici was legal aid counsel to the accused. The case continues. Steepest increase in prices registered in July Woman who arrived from Barcelona with 7kg of cocaine charged with drug trafficking Clyde Caruana says a new COLA mechanism will be in place to address the particular needs of lower- income groups, who will be receiving additional compensation to counter inf lation