Editorial

A storm of protests over proposed new water and electricity tariffs has exposed some surprising considerations and, also, opened a wide rift between the government and the social partners as represented in the Malta Council for Economic and Social Development (MCESD).

The first consideration is that, right from the very beginning, the exercise has been mired in misunderstanding, when clarity of thought and action ought to have been a priority in a matter that is so vitally important to the life of the ordinary citizens and to the lungs of the various sectors that make up the island's economy. What was considered as a fait accompli by the council was, in the government's view, merely meant as the start of a consultation exercise over the tariffs.

Clearly, though, it appears that the government put the wrong foot forward when it presented the proposals, for it can hardly be conceivable that all the council members had misunderstood the government. Obviously taken somewhat aback by the social partners' strong reaction, the government is now making it clear that the proposals are purely meant for consultation. This has also been confirmed by the Prime Minister.

Moving on to other considerations, one of the first that comes to mind is surely the impact the new rates would have on the household budget of most people and on industry and tourism.

However, what is clear from the outset is that the subsidy culture is still very much entrenched in the people's psyche. It would seem that it is all right to call for an end to the subsidy given to the shipyards but when the threat of subsidy removal comes close to the home of other sectors, all hell breaks loose. Government subsidy for this year alone was at first estimated at over €61 million, with the shipyards, for instance, taking €4.7 million, and public transport another €5 million. A breakdown in the pre-budget document shows that the highest subsidy allocation by far goes to Enemalta, €43 million. In the case of Enemalta, however, the estimate was for up to October, for, according to Prime Minister Lawrence Gonzi and the Minister of Infrastructure, Transport and Communications, Austin Gatt, the subsidy figure has now gone up to a staggering €68 million. All this represents an added burden to the government's finances. Writing in a Talking Point in this newspaper today (back page), Dr Gatt says the amount is equivalent to 1.2 per cent of GDP. He also mentions an allowable government subsidy for costs of €17 million for next year.

Industry, tourism and all the other economic sectors, as well as the people, have been well aware of the government's plan to remove subsidies and, in the case of water and electricity consumption, of its intention to work out new tariffs to take into consideration the jump in the price of oil that has occurred over time. So, the MCESD, and the members it represents, should have prepared themselves well in advance for any government move to end the subsidy, and the Labour Party, whose leader is calling on the government to back off, should have come out with its own proposals rather than simply seeking to gain political mileage from the issue.

Having cleared the misunderstanding that sparked the first storm, the government and the social partners ought to see now how the matter can be resolved without any further beating of the drums and with a sincere disposition - from all sides - to look at the problem realistically.