Edward Scicluna

MCED to act as a forum for wage debate

Any change will have great possible impact

The Malta Council for Economic Development will be the platform not only to continue discussions on the way that the Retail Price Index is calculated, but also for the unions to voice their disagreement with the way that the social wage is calculated.

By Miriam Dunn

MCED Chairman, Prof. Edward Scicluna, was speaking to The Business Times following the MCED meeting on Monday, at which the social partners discussed the way that the RPI is calculated. The meeting was held following claims that the figures did not reflect the real increase in the cost of living.

Prof. Scicluna explained that the unions said during the meeting that they were unhappy with the practice used to calculate the social wage, which sees the Finance minister apply the inflation rate to the social wage and whose value is then, in turn, applied as a flat rate to all income sectors. This method was first adopted in line with the 1990 Income’s Policy.

“The unions want to discuss this method of calculation, along with the RPI itself,” the MCED chairman explained. “This is an important, fundamental principle on which, to date, there has been broad agreement between the social partners. Any change will have great possible impact, since it will bring into question how we calculate the social wage and what this should be.”

Prof. Scicluna said the subject will now be negotiated at the MCED, while voicing his hope that an agreement will be reached of mutual satisfaction. “In the event that a change would be needed, we will try to make sure that we arrive at a deal that is fair for the workers, but will still keep the economy competitive,” he said.Prof. Scicluna, who admitted to the press after Monday’s meeting that the weighting of some items would need discussion, pointed out that people today had different priorities when shopping than they did in 1994, when the last survey was done.

“Households today have different items in their shopping baskets,” he explained. “The RPI, based on the 1994 weight, will suffer from a statistical bias which will be both upward or downward, depending on the item concerned. For example, water was less important in 1994 than it is today, while bread and food had a higher weight.”

Prof. Scicluna was asked to comment following GWU secretary general Tony Zarb’s claims that the RPI weighting of some products needed to be changed following the increase in water and electricity bills.

“Until we have the results of the new survey, any organisation or union could make a statement to the effect that the RPI is not accurate,” the MCED Chairman pointed out. “What we have to examine are the implications

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