Editorial

With Malta's accession to the European Union on May 1, remaining import levies intended to protect local products were removed; however, products such as newspapers and certain medicinals are now subject to VAT. Besides, the general VAT rate, as announced in the last Budget Speech, on January 1 rose by three per cent to 18 per cent.

Since May 1, shoppers have found a range of new prices, not to mention new imported products, at supermarkets. The probability is that between drops in the prices of certain imports and price increases on items imported from outside the EU, and therefore subject to the Common External Tariff, things will even themselves out for the consumer.

However, Opposition Leader Alfred Sant on Wednesday called for strict price monitoring by the government, through the setting up of a Price Watch to be operated with funds allocated to MIC, in conjunction with the Consumer Protection Unit.

Reacting to this, the government said that such a structure already exists within the Consumer and Competition Division. Its market surveillance officers are charged with monitoring the quality and price of products on the market, and since last February have been inspecting shops to ensure that the new prices after May 1 reflect the removal of levies on a range of items.

The government pointed out that inflation in February was at an annual rate of 1.7 per cent, which is quite low and compares well with that in most EU countries. Besides, VAT will now be payable by importers not on landed goods but on sales to retailers, making importers' cash flow easier, lowering their costs.

One appreciates the Opposition's concern about rising prices. In fact the MLP also referred to other price rises - such as in local telephone rates and Gozo Channel fares - which may affect the overall rate of inflation. However, the best watchdogs of prices surely are the consumers themselves.

Of course it would be good to know, from the government, what the removal of levies has meant in practice and in terms of retail prices on various categories of items, but in a free market economy, where trade liberalisation has been hailed even by the Opposition, it is competition which should keep prices in check.

Consumers should exercise their right to choose and take their custom to retail outlets (and anybody offering goods or services) offering the best value for the cheapest prices.

Naturally, it is the duty of the Office of Fair Trading to intervene whenever there is the suspicion that a single importer or group of importers are trying to dominate the market and dictate prices. This would be a distortion of the free market and undermine real competition. However, with EU enlargement, of which Malta is part, local consumers should be in a position to avail themselves of a much wider range of products, and of even lower prices, than before.

This does not mean that some retailers and importers would not be tempted to take advantage of particular situations and raise prices at the first available opportunity, but this would be more difficult with heightened consumer awareness and greater selectivity in shopping habits.

In monopolistic or near-monopolistic situations, of course, the consumer gets the worst part of the deal. This is why liberalisation should be applied across the board, and particularly to areas where monopolistic practices still prevail.

Where Government needs to be careful, as far as prices is concerned - and the Opposition's support should be sought in this - is when the changeover to the euro eventually takes place. It is generally accepted that in most if not all the 12 Eurozone countries, the changeover to a single currency has had an inflationary effect, in some cases markedly so.

It would be then that the Opposition's suggestion for a price watch would make sense - not to lay down the prices for every single commodity, but to offer a guide which would after all be a mathematical exercise giving the euro equivalent of the prices in Maltese liri.

Requiem for FM Bronja

Those who expressed fears, a few months back, that FM Bronja - the classical music station run by PBS - would be closed, sending in dozens of letters to this and other newspapers, sadly had those fears confirmed by IT and Investment Minister Austin Gatt last Wednesday, citing the need for savings.

It is a slight consolation that some of its programmes will now be broadcast by Radio Malta and by the University radio, but this dedicated classical music station, groomed with such loving care by a good team led by George Peresso, will be sorely missed by those who found in it an excellent and highly informative and educational companion. And they were certainly more than the 2,500 mentioned by the minister.