Fenech invites submissions on competitiveness, says surcharge rise inevitable

Finance Minister Tonio Fenech this afternoon invited the member organisations of the Malta Council for Economic and Social Development (MCESD) to submit proposals on how they feel Malta can retain competitiveness and how the cost of living could be reined in, despite an environment of rising international oil and food prices.

Mr Fenech delivered a presentation to the council where he said that the oil price had risen by almost 90 percent in a year, and it was inevitable that the power surcharge in Malta would have to rise after June. He said some oil purchase contracts for next year had already been made, at a rate which was 40 percent below the current oil price, but he could not, at this stage how much the surcharge increase would be.

Referring to the cost of living, Mr Fenech recalled that when presenting the budget late last year, the government had anticipated the problems which the world economy was facing and had therefore reduced taxes and awarded a wage increase which was higher than the formula of the cost of living adjustment. That forward adjustment appeared to have achieved its purpose and there was therefore no panic on the impact of higher inflation on Maltese households.

Vince Farrugia, who represented the GRTU at the meeting, said the association was calling for the price of diesel to be reined in because it had an inflationary impact across the economy,

GWU general secretary Tonio Zarb said the impact of any increase on the surcharge needed to be discussed.