No word on tax cuts
The tax cuts promised prior to the general election in March continue to hang in the balance as no kind of measure was mentioned in a Budget 2009 presentation to social partners yesterday.
The social partners attended a presentation by Finance Minister Tonio Fenech who gave them very little details, jokingly saying that otherwise they would not sit in front of the TV on Monday to watch him read the budget speech - his first.
This is leading them to believe that tax cuts could possibly be introduced as a mitigating measure to the new water and electricity tariffs, introduced retroactively from October 1. At yesterday's meeting, the topic was raised but it seems there will be no changes to the tariffs.
The budget will have a strong environmental element, based on the polluter-pays principle.
Sources said the government will be introducing some form of tax on plastic bags - something it had already done with the introduction of the eco-contribution in 2005, which had failed miserably.
In November 2005, the then Environment Minister, George Pullicino, told Parliament that following the introduction of the eco-contribution, the number of plastic bags used dropped by 22 million during that year.
Supermarkets had started charging shoppers for the number of plastic bags they use but this soon fizzled out and a visit to any supermarket today will confirm that people are back to their old habits. Being free, shoppers pack up their items in as many plastic bags as possible because they will eventually be "recycled" to dispose of their rubbish at home.
The government was considering two options: either for the bag to be sold across the counter or a ban on the use of plastic bags other than those made from either degradable or a biodegradable material.
Sources said the budget will also include a number of measures for alternative energy as well as a number of eco-taxes.
As expected, the government will finally unveil the reform of the car registration tax whereby cars will be taxed on their emissions and age.
The new motor vehicle registration and licensing system will reward those buying low-emitting and younger vehicles and charging a premium on the less efficient and older vehicles. This in accordance with the polluter-pays principle, whereby heavy fuel consumption and polluting engines are taxed more. On the other hand, lower consumption and green and clean technology is rewarded by lower taxes.
Congestion is also another important factor in the proposed new system. Longer cars increase congestion time and need longer parking spaces. Therefore, smaller cars should be fiscally preferred and, therefore, the purchase of smaller vehicles will be rewarded.
Another measure is increased funds for tourism marketing but no further details about this were given.
At the end of the meeting, the media were allowed in only to hear Mr Fenech thanking the social partners for their contribution. He said it was the government's intention to achieve sustainability in the country's economic development, adding that this was not an easy task.
Meanwhile, in a statement issued late yesterday, the Prime Minister's Office accused the opposition of "partisan and cheap politics".
The Prime Minister's Office said that during a meeting with the social partners at Castille on Monday, Lawrence Gonzi explained that the decision on the new water and electricity tariffs could not be postponed.
He said the parties had agreed on a revision of the water and electricity tariff proposals in order to mitigate the impact on large industries with the aim of protecting jobs.
This showed that the government had remained open to consultation to the last moment and continued to meet all those who asked for a meeting.
It also showed that social commitment was the government's prime consideration in this process. It had thought about protecting jobs and families in need through the extension of a scheme for the purpose, the OPM said.
The subject of water and electricity tariffs was also raised in Paris, during the European Conference on Craft and Small Enterprises.
Vince Farrugia, the director general of the Chamber of Small and Medium Enterprises - GRTU, told participants that the government had ignored consultation with the social partners and imposed new tariffs on services offered by state monopolies.
He said small enterprises were being expected to subsidise the water and electricity consumption of larger companies.
Mr Farrugia called on the European SME umbrella organisation, UEAPME, which represents over 12 million enterprises around Europe, to condemn what was happening in Malta. The GRTU said UEAPME will be raising the matter with the European Commission.
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C. Camilleri
Nov 2nd 2008, 10:29
Par idejn sodi ghal fuq il poplu, imma mbaghad kollox iva ghal li tghidlek taghmel l-ewropa minghajr ebda sens biex tiddefendi l poplu tieghek! Fejn hi is-solidarjeta mal poplu Gvern? Hekk sew!! Nara lil shabi jaqilbu bil 4 day week jew ghar, jitkeccew mix-xoghol, u int tibqa tkissirna!! Sa tmur lura minn kelmtek? Iz-zejt nizel taht $85 il-barmil imma se trahhsu d-dawl u l-ilma kif kont wghedt? Id-diesel u l-petrol m'humiex jimxu f' linja skond il-prezzijiet tas-suq. . . Qed tghaffgu poplu!!! U mbaghad tigi tghidilna li se jkun budget favur l-ambjent! B'min trid tidhak. .. ha nghidlek haga. Biex tixtri solar panels ghal fuq il bejt tad0dar irid ikollok il-flus!!! Imma n-nies ed tghakkashom!!! Tista tghidli kif tista tkun kredibbli inti? Gvern ghas-sinjur inti!!!
J.Duca
Nov 2nd 2008, 10:05
Forget about tax cuts (not those ordered by the E.U.) Everybody knows the game now, well almost. Impose tax and duties for the first three years and then give some back before the election. Gvern li jixraq lil dan il-poplu.
P.Schembri
Nov 2nd 2008, 00:13
@J.Vella. It's true Labour made the airport tax. But at least be sincere with other correspondents. The PN government is being forced to remove by the EU and no other reason. If it weren't for the EU, that tax would have remained, and bet your bottom dollar, even doubled now, as happened two years ago.
l Galea
Nov 1st 2008, 21:30
joe Vella
While that tax was introduced by the Labour Government to somehow try to remedy the massive deficit made by your Nationalist Government which also squandered Lm 500 million left in Malta's coffer by the Mintoff / KMB Governments, your Nationalist Government DOUBLED the tax instead of removing it.
It is only removing it because it has been ordered and forced to because otherwise it will have kept it in place.
joe Vella
Nov 1st 2008, 19:56
@ ap Grech
The clocks where indeed turned back not 20 years, but by about 50 years as a result of the Mintoff/KMB Governments.
Did you notice that as of today another MLP Tax bit the dust.
Phil Press
Nov 1st 2008, 15:57
Tax cuts a plenty. The government, will make up the shortfall in tax revenue, with the massive increases in utillity bills.
apgrech
Nov 1st 2008, 15:22
Last weekend we turned the clocks 1 hour backwards. On Monday, after the budget, we'd better be prepared to turn the calendar 20 years backwards because this is what's going to happen to our life style.
I feel we have been betrayed by this govenment. Lots of promises and they are giving us the opposite of what they had promised us.
They lied to get votes and we're seeing those lies beng fulfilled now.
Paul micallef
Nov 1st 2008, 13:56
@R.Camilieri,
The C.E.T that the Labour wanted to introduce was a fair and just one, if one takes time to think about it, i shall point out what was working, when a fully loaded container comes into port and opened by customs the C.E.T had to be paid on what is inside the container, and thourouly checked, thats why a lot of Business people did not like it.
Now look at V.A.T,system that is in use today, the containers come in to port fully laiden with merchandise, a quick check by customs with its new x-ray truck , just to see if there is anything that is related to terrorism, sniffer dogs are used for drugs( this has always been proxy) and it is of to the owners wharehouse, then people pay the VAT on the things that they buy in the shop.
I agree with the Goverment, that those who pollute should pay more tax,granted, but if you think that the goverment is going to leave cars from Europe come into Malta without paying some kind of tax, you are wrong,,what about the cars that the dealers have in stock?they are part of the the business section.
Eric Gahn
Nov 1st 2008, 13:44
What's the worry about tax cuts? Austin Gatt will be holding consultations on the matter soon.
Henry Mifsud
Nov 1st 2008, 12:29
Responding to an article yesterday I said "If I had to come to any conclusions even before reading the budget which is to be presented on Monday, this is it: Incompetence at its best".
After reading this article, any suspisions I had whether I came to right conclusions vanished.
May I reiterrate that the budget should not be a financial exercise only but more so an Economic one. What we are experiencing is an accounting exercise resulting from management by crisis.
Government is definitely not tapping one of the most crucial resource Malta has ever produced: an array of brilliant economic minds.
These, irrespective of their colour or creed, should be roped in to join the strategic thinkers in the Government's fold to get us out of the mess we have drove ourselves in.
What the government seems to be constantly ignoring is the fact that the population is not only asking: QUO VADIS MALTA? but they are also expecting it to deliver, more so when they have been promised heaven on earth. The people are feeling cheated with a valid reason.
A word of advice
"NEVER PROMISE MORE THAN YOU CAN DELIVER BUT DELIVER MORE THAN YOU PROMISE".
R Camilleri
Nov 1st 2008, 10:19
Finally.......... the new car registration tax system is just hours away. Unfortunately very little details are known. I hope that the new system will be just and it will not be a half baked one-like the Old Labour CET.
Hopefully it will make sense and keeps a fair relativity between expensive and less expensive cars, (before and after tax) and also between new and used and imported cars so that it would not need to be amended in a short period of time. Let's wait and see.