The portfolio which I have been recently assigned by Opposition Leader Bernard Grech once again includes social accommodation and the fight against poverty.

I look forward to the continuation of my mission, which I humbly and fervently live with every day, namely to be close to those among us who are facing difficulties and to be a voice for more equity and social justice within our society.

People whose earnings lie at the very bottom of the income ladder, that is, the minimum wage, face difficulties on a daily basis and it is these people who suffer mostly when the cost of living increases.

To date, the existing mechanism to account for inflationary changes and compensate for such increases is the cost-of-living adjustment, better known as COLA. We have lived with COLA for many years and while many have questioned the appropriateness of this mechanism, it has not yet been reviewed.

Without putting into question the intentions behind COLA, which are intrinsically positive, I feel that the mechanism used has failed to deliver COLA’s aims.

The adjustment is meant to provide a fixed monetary compensation which reflects changes in prices based on the retail price index (RPI). However, in my opinion, the mechanism is discriminatory, in this case specifically because it does not distinguish between income brackets.

The current mechanism does not distinguish between high-income earners and low-income earners and those at risk of poverty or materially deprived. Price increases are obviously felt much more by the lower-tier earners because of their clear lack of purchasing power.

Therefore, the suitability of the status quo immediately comes into play. How are we supporting the more vulnerable when distributing an equal compensation? The one-size-fits-all approach does not work for these people and, if anything, COLA does nothing to prevent them from getting closer to the edge of poverty.

In this light, I think a proper discussion on COLA and its effectiveness is long overdue and, if we are to be truly in touch with reality, then the time is right to rethink the mechanism.

The current COLA mechanism does not distinguish between high-income earners and low-income earners and those at risk of poverty or materially deprived- Ivan Bartolo

We need to look towards a system which reflects more realistically the inflationary effects on the different social classes.

I would also like to refer to a research study by Caritas to develop a ‘Minimum essential budget for a decent living’ (MEBDL).

This can be useful in measuring the risk of poverty and social exclusion in Malta and should be taken into consideration when the COLA mechanism is being reviewed.

By dwelling on this subject, I am echoing the voices of non-governmental organisations which experience and feel the difficulties of people in or at risk of poverty on a daily basis.

The suggestion to revise COLA has in the past years been especially voiced by these same organisations which carry out priceless work among the vulnerable.

We need to be clear that an easy answer does not exist, however, the above example and other suggestions will open the door for better methodologies that support our vulnerable members of society while ensuring the sustainability of our country’s economy.

A new cost-of-living adjustment system, which enjoys the broad support of all stakeholders, may appear challenging to achieve. However, the government and the parties involved should find the courage to arrive at a solution.

We need a cost-of-living adjustment system which is truly respectful of the socio-economic realities of our society.

Ivan Bartolo is a Nationalist MP.

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