AD unveils six-point plan

Alternattiva Demokratika has called on the government to delay the opening date of the Mater Dei Hospital by two years in a bid to cushion part of the Lm50 million oil bill which, the Green party says, threatens to destabilise the economy.

In a press conference held symbolically outside the offices of the Malta Council for Economic and Social Development in Floriana, AD unveiled six proposals to be implemented over a period of three years which, it believes, would best tackle the oil crisis in the short-term.

The MCESD will convene for a crunch meeting this afternoon as the government moves to take remedial action in the light of $70 a barrel crude oil price. Enemalta's fuel cost shot up to Lm54.5 million last year and was expected to rise to Lm84 million in 2005/2006.

The government is contemplating increasing the 17 per cent water and electricity surcharge to a maximum of 102 per cent or raising fuel prices by 20c per litre to try and cope with the international price increases.

AD chairman Harry Vassallo said it was unacceptable for a government to give the social partners five days to decide between two "bombshells", which would ultimately harm consumers and businesses. Since Investments Minister Austin Gatt announced the crisis last week, AD assembled an emergency task force to try and propose a multi-faceted solution.

Edward Fenech, AD's spokesman on the economy, explained the importance of not placing undue burden on vulnerable sectors of society and commercial sectors that are at high risk of losing competitiveness.

While AD agrees with the government that any increases for hotels and certain industries are to be capped, it is unfair to put the burden squarely on consumers.

"The government is doing nothing more than adopting calculator politics, something it used to accuse the Labour government of doing," he said.

Mr Fenech said the government proposal would do nothing more than fuel inflation, deal a blow to the country's balance of payments and Central Bank reserves and destroy businesses.

AD believes the government should absorb Lm5 million of the increased fuel bill each year over the next three years.

Mr Fenech urged the government to impose a one-time extraordinary increase in income tax on commercial banks and other financial institutions from 35 per cent to 44 per cent for the year 2006. This measure will raise Lm5 million for one year.

He called on Enemalta to carry out a determined clampdown on electricity and water theft with a target of Lm5 million in the first year, up to Lm10 million by the third year.

AD also suggested an increase in fuel prices of 4c per litre for next year, rising to 5c5 in 2007 and 7c5 in the third year.

An additional 1c per litre is being proposed in order to subsidise the fuel cost of the public bus service in order not to raise the current fares.

This measure is being proposed on the assumption that the government embarks on a full reform of the bus service in order to offer a quality transport alternative other than private transport.

This measure will raise Lm15 million in the first year and will rise to Lm22 million in the third year.

Mr Fenech suggested that the electricity surcharge will rise from 17 per cent to 25 per cent in the first year and continue rising to 30 per cent by 2008.

AD, Dr Vassallo said, has insisted time and time again that the country needs a comprehensive energy strategy that would have steered clear of the current situation where the government finds itself proverbially with its back against the wall having to deal with a situation of near full dependency on fossil fuels.

"We are insisting again that over the next two to three years an energy plan, with substantial provisions for the exploitation of clean and alternative energy sources, is drawn up," the chairman added.

He recalled that during the oil crisis of the 1970s, Denmark had invested heavily in wind energy, a move which paid off. AD's proposals were sent to the constituted bodies within the MCESD yesterday morning.

The social partners have practically unanimously shot down the proposals made by the government.