Utility tariffs meant crucial reform, says Gonzi

Prime Minister Lawrence Gonzi told Parliament yesterday that a crucial reform had to be carried out with the water and electricity tariffs which, in turn, would introduce the different culture and mentality the country needed.

Winding up the budget debate on the votes of his ministry, Dr Gonzi said that he was ready to continue listening but insisted he listened to take decisions. Malta's "hobby" for subsidies, he said, had to end when the such subsidies were not justified. The government was trying to bring in a culture change.

The Prime Minister also spoke on the reform at the Malta Environment and Planning Authority saying the consultation process was nearing its end. Decisions which would bring about radical changes had to be taken and the reform would be announced in the coming weeks.

Dr Gonzi tabled three documents - Code of Ethics for Board Directors in the Public Sector; Corporate Governance Framework for Public Sector Entities; and National Anti-fraud and Corruption Strategy, all of which were aimed to continue reforming the public administration. (These can be accessed through www.timesofmalta.com)

The Prime Minister said that social indicators showed that while in 2000 there were 630.6 cars for every 1,000 persons, in 2007 these increased to 699.8 cars. This was a sign of progress, even though it was one that was bringing with it great environmental challenges.

Internet subscriptions had increased from 83 per 1,000 in 2000 to 245 per 1,000 in 2007 and mobile phone users from 289 per 1,000 in 2000 to 907 per 1,000 in 2007.

The number of students had increased from 87,600 in 2000 to 93,500 in 2007 with those following day courses at the university going up from 6,315 to 9,556.

But the most important statistic, Dr Gonzi said, was that which related to employment. The number of gainfully occupied increased from 139,482 in June 2006 to 141,831 in June 2007 to 145,257 in June 2008. This was at a time when the biggest number of people were reaching pensionable age. So, theoretically, the number should have gone down.

There had also been substantial increase in the number of young people opting to continue with their education. The increase, Dr Gonzi said, had not been in the public sector which shrunk by 1,199 between June 2006 and June 2008, and by more than 6,000 between June 2000 and last June.

This was the best certificate of competence the government could boast of.

Dr Gonzi said the opposition had showed lack of foresight in not wanting Malta to join the Eurozone when it did. He added that those arguing that joining the EU and the Eurozone had not cushioned the effects for Malta of the current situation were wrong; the countries that stayed out were facing big problems.

Had the government heeded the opposition's advice, the country would have been pushed against a wall.

The Prime Minister insisted that the budget had met the three targets it had set out to reach: responsibility, sustainability and solidarity.

Dr Gonzi pointed out that the government was not using the current situation as an excuse to justify the deficit, which was created because of the price of oil and the shipyards' retirement schemes. However, no one had imagined how much the international crisis, the tsunami of which started four months ago, would grow.

Malta could only remain strong because it took the right decisions in the past and had never been afraid of reforms.

Referring to climate change, he said that contrary to the impression the opposition was giving, it had not presented a bill on climate change.

On a point of order, Labour MP Leo Brincat said that what the opposition did was request a commitment from the government that it was willing to work with the opposition on the drawing up of such a Bill.

Continuing, Dr Gonzi said that the budget was in itself a bill on climate change because it was addressing fundamental energy issues. He pointed out that it was costly to address climate change. The fumes caused by diesel cars, waste and drainage had to be tackled, the waste recycling plant had to be built, difficult choices had to be made and decisions had to be taken.

He hoped that ongoing talks in the House Select Committee would lead to more transparency and accountability and that a special investigator would be appointed resulting in a leap in quality and a more refined strategy to attack corruption.

The Prime Minister praised the Armed Forces of Malta, who, he said, were serving an important function which had had to go through substantial changes. The AFM's conditions of work improved this year but the government would like to do more since these people were doing very important work, particularly the Maritime Squadron whose personnel exposed themselves to the sea to save the lives of people in danger.

Dr Gonzi said that although many, including himself, sometimes, complained about the public sector, there was also a lot of good. This sector had enabled Malta's smooth succession to the Eurozone and the migration from St Luke's to Mater Dei, for example.

He said that in this budget, the government had started implementing electoral promises. It introduced the first phase of the income tax reform which was leaving more money in the peoples' pockets.

Earlier, Parliamentary Secretary for tourism Mario de Marco said that despite the international situation, Malta achieved positive results in tourism over the first five months although growth declined to 3.7 per cent by the end of September.

Growth in the sector was expected to be 2.3 per cent by the end of the year.

He said that up to the end of May, 75,500 or 15 per cent more tourists visited Malta, this being better than the EU average. He said that by September, hotel nights had increased and more than one 1.45 million tourists visited Malta.

The average holiday in Malta slipped from 9.1 in 2006 to 8.8 nights in 2008. However, there was a 4.8 per cent increase in nights spent in Malta in the first three quarters of the year.

Tourist expenditure by September had increased to €854.7 million although the share of the tour operator's package showed a decrease over 2007.

Tourism was being strengthened because more independent tourists were visiting Malta. This amounted to 27 per cent of the total number of tourists when in 2006 these amounted to 17 percent.

He said that income by the accommodation sector increased from €55 million in 2006 to €102 million this year. There was also a two per cent increase in expenditure which in 2008 amounted to more than €300 million.

Dr de Marco said that it was also true that per capita expenditure decreased from €900 to €829 over the last two years. This was mainly due to decreases in the length of stay and to tour packages. Employment over the same period also increased by 1,341 full time jobs in hotels and restaurants .

On the International Competitiveness tourism Index Malta stood in 25th place among 130 countries. He referred to the new energy tariffs and said the MHRA was consulted on the new rates. Many tourism enterprises will pay less over the next two years.

Dr de Marco said that more than 500,000 tourists arrived on cruise liners, increasing to 535,000 by December. Expenditure by these tourists was expected to amount to €40 million with every passenger spending €77.

The Parliamentary Secretary criticised the opposition for failing to giving its reply on the National Action Plan for Tourism.

He said that more airlines added Malta as their destination with Air Malta achieving record results over the winter period. The tourism sector is working to attract more airlines to Malta and to increase flights from other airports.

Dr de Marco spoke at length on the marketing strategy adopted by the MTA with international campaigns on various media including television networks in the UK. Allocation to the MTA increased to €28 million in 2009.

Various action groups had been set up to tackle particular problems in the sector.

More than 1,400 inspections were made in hotels and restaurants. Beds in hotels increased.

Dr de Marco listed 63 projects which the government wanted to embark on by 2012. These included a cruise liner terminal at Boiler Wharf and more yacht marinas.

The government is determined to make the tourist industry sustainable, he concluded.

Parliamentary Secretary Chris Said said the MCESD had a role to facilitate dialogue. It had been strengthened and its scope widened, and now had the necessary experts to function properly. In the past seven months there had been a record number of meetings, debating issues ranging from fuel and food prices, to rent reforms.

The MCESD also had a regional committee for Gozo, set up last September, which discussed problems specific to Gozo.

The recently set up MEUSEC would be working on three areas: consultations on legislation proposed by the EU, dissemination of information about the EU and Malta in the EU, and help to NGO's and local councils to exploit opportunities for EU funding. Some €1.2 million had been allocated to MEUSEC.

Apart from consultation in national fora, there had also been a number of separate processes of consultation. Never before had Malta had so many processes going on at the same time: the pre-budget document consultation, consultation on rent laws, on public transport reform and other environmental organisations as well as the Mepa reform, among others.

When it came to EU funds, between 2004 and 2006, Malta had the highest absorption rate among the new member states, and these had improved the environment and the infrastructure.

Some 11,650 persons had been given training by EU funds; 390 agriculture and fishery enterprises had benefitted and there had also been improvements in industrial zones. Ten per cent of the EU funds had been used on various projects in Gozo to improve human resources and infrastructural changes.

Together with the EU they aimed to lighten the administrative load by 15 per cent.

The DOI website had 35 million hits in just nine months, making it one of the most popular sites. The process of digitisation, which would change old 16mm films to digital form, was also underway. There were also plans to make them available on DVD.

Local councils enjoyed the most substantial increase in funds allocated to them, that of €4 million. Other schemes would allow local councils to make use of alternative energy, and to organise cultural activities. The eco finance fund allowed €300,000 for local councils to co-finance EU projects.

There were also workers on loan to local councils. Their wage packet cost €2.5 million. Those claiming benefits, who would also be doing community work could be employed by local councils. There was also a pilot strategy for sustainable development for two locations so councils may begin to plan ahead for sustainable development.

Over 180 tickets had been issued in contravention of the Litter Act.

Concluding, Dr Said said these initiatives were a result of consultation which would lead to reform of local councils. The government had received more than 6,000 suggestions for this reform, and would shortly be putting them forward in Parliament.

Nationalist MP Joe Falzon said the budget addresses how this country was going to generate wealth, and how this was going to be distributed. He called on the opposition to promote a vision and not be driven by the currents in the country.

Mr Falzon said consultations were being held with MTA to enhance the environment. In future, there would also be consultations with other authorities.

He also said Parliament should discuss Mepa reforms. Planning should be based on more environmental grounds rather than legal grounds. Development guidelines should be reviewed to give more quality-planning.

There should be more diversification in construction, which was one of the main concerns of the public. He noted that the opposition had participated in the public consultation on the Mepa reforms.

Turning to tourism, Mr Falzon said that through research and development, Malta should locate more markets.