Opposition deputy leader Charles Mangion said yesterday that the MLP was basing its promise to halve the power surcharge on the surcharge charged to consumers last year.
He told Parliament during the Budget debate that consumers paid a surcharge of between Lm23m and Lm25m last year and a Labour government would therefore put Lm12 million back in the people's pockets.
Dr Mangion was replying to questions by minister Austin Gatt who on Thursday had asked the opposition to specify what amount of surcharge it was promising to halve, especially as oil prices were continuing to rise rapidly.
Notary Mangion said the government, over the past four years, had burdened families with new taxes and a higher cost of living. The tax revenue had risen by Lm198 million but the government was now giving back Lm21 million, just over 10 per cent.
The people's quality of life had deteriorated, with wage inflation being among the lowest in the EU even as taxes and prices rose. In 2004 the average wage in real terms was down by 1.5 per cent, going down by a further 1.4 per cent in 2005 and 1.3 per cent in 2006.
Notary Mangion said there was a large section of people that would be benefiting only little, or not at all, from the revised tax bands. Had the government really wanted to act for all families, it would have reduced the power surcharge.
Compared with the other 26 EU countries Malta's competitiveness had fallen behind - this despite lower real wages and the reduction in public holidays.
The reason for this deterioration were costs and bureaucracy. Two years ago a committee had been set up to restructure and streamline the system, but there had been no significant results. Economic operators still grumbled about official indecision and the moving of goalposts, issues which deterred investors. Yet the budget showed no inclination to tackle bureaucracy.
Notary Mangion said that if Malta wanted to expand the economy it must first strengthen families' purchasing power, not least by reducing the energy surcharge.
When the government spoke against the MLP proposal not to tax overtime it seemed to be forgetting its past insistence on taxing consumption rather than work. Overtime was done mostly by lower earners, and abuse could be anywhere, but in economic terms it would turn the wheel better.
Notary Mangion said Malta needed to achieve better results in the education sector and diversify its tourist product. The investment climate for the manufacturing sector, as well as worker training, needed to be improved.
At the same time the government should continue to back growth in successful sectors such as financial services, e-gaming and maritime affairs.
Notary Mangion referred to reports in The Sunday Times and The Times showing a difference of opinion between the government and the Central Bank over whether the government would be able to use some of the bank's reserves after euro adoption, and said the situation needed to be clarified.
Notary Mangion referred to the privatisation of Tug Malta and asked what had happened to the government's Lm6m revenue. Malta Freeport had also sold shares in OilTaking for Lm13 million. What had the Freeport done with the Lm13 million, given that the government was to pay Lm6 million to cover interest between 2007 and 2008.
Notary Mangion observed that contrary to projections, recurrent expenditure had increased. Why had this happened? This was a sign of incompetence.
Concluding, Dr Mangion said Labour had real answers on how to strengthen Maltese families, because this would in turn mean strengthening the economy.