The dangerous games with the Cost of Living Allowance (COLA) – Article by Eleni Mavrou, AKEL Political Bureau member
Sunday 26 June 2022, “Haravgi’ newspaper
The price increases/hikes in essential goods and services is not only reflected in the agony of people trying to make ends meet every week, every month, but also in the bleak figures released by the European Statistical Office.
As an indication, it has been reported (2021 data, before the big increases due to the war in Ukraine) that while the prices of basic goods required for the survival of each household are 9.2% higher in Cyprus than the EU average, wages are almost 40% lower.
And all indications are that we will soon face an inflation crisis. Already, in May inflation in Cyprus stood at 8.8%, remaining at a 40-year high. Inflation in the Eurozone and across the EU is also accelerating. In May, inflation in the Eurozone reached 8.1% from the 2.0% registered last year and in the EU in May it reached 8.8% from 2.3% in 2021.
Rising inflation means a steady decline in the purchasing power of money, resulting in more money needed by households to buy the same goods and services. In fact, it harms most those on fixed incomes, i.e. wage earners and pensioners. This is why it is often said that inflation is the hardest form of taxation for wage earners and pensioners.
It is for that reason not difficult to see, even for those in government, that it is imperative that measures be taken to support working people who have lost much of their purchasing power.
And yet.
The Automatic Cost of Living Allowance (COLA) is a mechanism that can provide a shield of protection for working people’s incomes. However, the Finance Minister, in statements last week, indicated that the government does not intend to restore the granting of COLA to workers.
Let alone the fact that the Minister is interfering with labour codes and is violating an agreement negotiated by the Ministry of Labour to open up a dialogue between trade unions and employers’ associations on COLA. Hence, his position effectively supports the employers’ side, which has always insisted on the abolition of COLA. More seriously, his intervention arrogantly ignores price increases/hikes that is crushing working people.
Is it not, after all, with the same arrogance and callousness that the government ruling forces refuse to take effective measures to address the price increases and protect consumers (for example, the reduction of VAT on basic goods, a cap on fuel, the abolition of double taxation on fuel)?
And this despite the fact that Nikos Anastasiades states that “at least in Cyprus and two other countries in Europe there is COLA, which to some extent makes up for the loss of income, certainly depending on inflation.”
The truth is that the ruling DISY party remains consistent in its ideological conceptions with regards COLA – an “anachronistic” and “outdated” custom, as the government ruling forces have made clear to us many times.
All people understands that action is needed now – everyone that is except the Anastasiades-DISY government…
