The utility tariffs being proposed by the government are equivalent to a surcharge of 245 per cent and are being introduced "at the worst possible time for the country's economy", Labour leader Joseph Muscat said yesterday.

Unveiling his party's workings on the impact the proposed tariffs would have on families and businesses, Dr Muscat said the government, "has no option but to withdraw the proposals and start a proper consultation exercise from scratch".

The proposals were announced during a Malta Council for Economic and Social Development meeting on October 1, with the aim of taking a final decision by Friday this week.

The proposals were, however, shot down by the social partners who warned of the repercussions on the economy and the cost of living.

The government is to present revised proposals at MCESD meetings scheduled for tomorrow and Thursday.

Dr Muscat said the proposed tariffs showed the government had lost its social conscience.

When it was pointed out to him that Malta had no option but to do away with subsidies and capping to come in line with EU regulations, he said this was the right time for the government "to be tough" and "put its foot down" with the EU, especially in view of the rough patch that world economies are going through.

Dr Muscat said the party's calculations were a critical analysis of the government's proposals. Asked whether Labour had its own proposals, he said the party would be working on an energy strategy that would include its proposals.

On what he would have done differently had he been in office, Dr Muscat replied: "I wouldn't have taken such a bad decision at such a bad time."

The government was giving a distorted picture of the impact of its proposed tariffs, Dr Muscat said, because its calculations had included summer houses, garages and "zero-person households". This was why it had reached the conclusion that the impact would be between €1.50 and €5 a week per household.

Based on the 2005 Census, Labour calculated that the effect of the electricity tariffs would between €5 and €9 per week; an average 77 per cent increase. In the case of the water tariffs, the proposals would translate into a rise of between €0.70 and €1.60 per week.

Moreover, he said, the electricity meter rental would go up by 170 per cent for one-phase supply and by an astronomical 700 per cent for three-phase supply for domestic users.

Commercial one-phase meter rentals would jump by 150 per cent and three-phase meters by 650 per cent.

The threshold being set by the government for consumers to benefit from the new eco-refund was "not realistic". The eco-refund would apply to those whose power consumption does not surpass 1,300 units per person per year.

However, a detailed study conducted by the party on the annual consumption of a family of three showed that this reached 4,620 units - 1,540 units per person and 240 units more than the threshold to qualify for this reduction.

The study included essential household items such as refrigerator, water heater, five energy-saving bulbs, kettle, microwave oven, toaster, washing machine and an oven, but it did not include electric heaters or air conditioners.

From an economic standpoint, Dr Muscat said the timing of the proposals was the worst possible for the economy and went beyond the polluter-pays-principle.

The cost-of-living allowance expected in the forthcoming budget is €5.83 a week, €2.33 of which has already been granted. The remaining €3.50 a week does not even cover half the increase in the utility tariffs.

For 90 per cent of businesses, the proposed tariffs would mean an increase of 82 per cent in their costs, which would impinge on their competitiveness.

Dr Muscat said the proposals had already brought about an economic slowdown, especially in view of the uncertainty unleashed when the government announced the tariffs would be implemented retroactively to October 1.

At a time when all the countries in the world were taking measures to stimulate their economies, Malta was doing the opposite by reducing citizens' spending power and fomenting uncertainty.

Reacting to Dr Muscat's comments, the government said that although Labour had promised fresh proposals on utility tariffs, these were not forthcoming. It said the party had limited itself to partisan criticism without offering concrete alternatives.

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