The time had come for Malta to move to a new mechanism where the government helps those with a low income affected by particular circumstances which push up prices, Finance Minister Clyde Caruana said on Tuesday.

Speaking at a pre-budget consultation meeting, he said the social partners had often called for a revision of the COLA - Cost Of Living Adjustment - mechanism.

Reaching agreement between the government, employers and trade unions on such a revision was difficult, he said.

Furthermore, while employers had a duty to give a fair wage to their employees, one could not expect them to cover price increases in such circumstances. To impose such a burden on them would lead to a further rise in prices, or people losing their jobs. 

Therefore in the Budget speech on Monday he would announce measures to help those with a low income, particularly pensioners, but he would also speak about a new mechanism, a new formula that should come into force when inflation spikes in a way that affects many people. The compensation, given by the government would then be addressed to those who had the lowest income. 

This, Caruana stressed, would not be compensation for everyone. Some people were well off, but others were not, and social justice demanded that it should be the weaker members who should be helped apart from the normal cost of living wage increases.

Talks should start therefore on this new formula for use in such extraordinary circumstances.