Surcharge on water should be 22 per cent - GRTU

The Chamber for Small and Medium Enterprise - GRTU appealed to the Prime Minister to do his utmost to ensure that small and medium enterprises are safeguarded and that households' disposable income is not drastically affected by the new water and electricity tariffs at the expense of other consumption.

"We strongly believe that Government needs to do more to safeguard the interests of all, otherwise most of what is being gained, through a very costly process of restructuring and reallocation of resources, will be lost and the economy will revert to a very dangerous downward spiral," the association said.

The GRTU said it had also advised Government to give Maltese enterprise the advantages of EU Directive 2004/74 that offers the possibility of temporary exemptions or reductions in the level of taxation on energy products, especially fuels used in enterprise on stationery equipment.

Unfortunately, in its implementation of this directive, Government has preferred to discriminate grossly against a wide cross-section of small enterprises by identifying only manufacturing enterprise and the hotel sector as beneficiaries of reduced taxation on fuel.

GRTU strongly supported all initiatives to help industry but strongly objected to this discrimination among enterprises. The organisation is also requesting that Government review the tariffs imposed on water bills. It is not fair that enterprises and households are being made to pay the full surcharge of 55 per cent on water consumption when Water Services Corporation costs show that only 40 per cent of its operational costs are electricity costs. The surcharge on water bills should therefore be 22 per cent.

GRTU said compensation to families should come through tax relief by the raising of the taxation threshold.

Taxpayers should be awarded tax relief equivalent to the electricity tariff increases, allowing workers to retain more of their earned income to compensate for the increase in electricity rates.

Similarly, enterprise should be given tax relief through additional tax credits that will mitigate the economic impact of the increased rates.

GRTU also urged Government to ensure that Enemalta abandoned the fallacious strategy adopted over the past 12 months not to hedge or consider other purchasing options that protected consumers from surcharges each time international oil prices rose.

The current practice of transferring all increases onto consumers is unacceptable. Why, asked the GRTU, were surcharges based on international prices and not on import price parities?

The scarcity of fuel oils on the international market showed that decisions needed to be taken on the issue without further delay. Enterprises cannot bear additional utility charges over the next months, the GRTU said.