Alternattiva Demokratika - The Green Party, has expressed its concern that Eurostat figures show that Malta's current annual inflation rate, 5.4% as at August, is the second highest in the Euro area.

Michael Briguglio, spokesperson for Social and Economic Development, presented a number of AD's proposals for the forthcoming budget which are directly related to the cost of living.

"AD proposes adequate compensation for Malta's hefty cost of living increases. In this regard Malta requires a realistic and just wage reform, which should include immediate reforms such as an increase in the minimum wage and tax credits for various income earners. Part-timers should also benefit from these reforms. Besides, a review of the current methodology used for cost of living adjustments (COLA) should be carried out to verify whether such adjustments are realistic in relation to current consumption patterns."

"Compensation for such measures to employers can be carried out through fiscal policy, as well as through the avoidance of unnecessary non-labour costs such as those related to bureaucracy and communication costs."

"AD believes that income tax reform should also benefit low-middle and middle income earners, and should shift towards penalizing environmentally harmful practices rather than work. Further revenue should also be generated from companies making windfall profits such as gaming companies. AD supports Government's efforts to reduce wasteful public expenditure in order to achieve fiscal stability."

Michael Briguglio added that AD also believes that local produce should be promoted, in an effort to help compensate for the imported segment of inflation. Increased production in products such as foodstuffs (including local organic production), and local markets should receive incentives from the Government.

"AD believes that basic consumption of water and electricity should be subsidized by the Government whilst excessive use and waste should be penalized. Besides, alternative energy and energy saving devices should receive adequate incentives from the State, such as decrease in VAT or income tax rebates. Such rebates can be financed through measures such enforcement fines coming form illegal developments or from a percentage of fuel consumption," Mr Briguglio concluded.

Prof. Arnold Cassola, AD's Chairperson, said, "Malta's inflation rate, 5.4% is higher than both the Euro area average of 3.8% and the EU average of 4.2%. Increases in items such as food and beverages, transport, and restaurants are resulting in increased burdens on middle and low income earners, workers and their families, pensioners and other groups especially since Malta's relatively low wages. Malta's annual increase in labour costs is currently the second lowest in the EU, rising by a mere 1.8%."

Arnold Cassola also referred to AD's proposal that the 7300 Euro limit for part time work which is taxed at 15% should rise to 12,000 Euro, and that Public Service pensioners, who do not benefit from this tax benefit, should also benefit.

Arnold Cassola concluded by saying that AD will be presenting a variety of other budgetary proposals, covering various areas, in the coming weeks.