Sant calls for proactive plan to safeguard consumers

Former Opposition Leader Alfred Sant yesterday called for a proactive plan that best safeguarded the consumer and the small self-employed. Malta's present problems - including higher utility rates, weak regulation of the banking sector, cost-of-living increases and delays in government payments - were government-inflicted.

Speaking during the debate on the Consumer Affairs Act (Amendment) Bill, Dr Sant said that even if the governor of the Central Bank was against such new stimulus to consumption, the plan was needed to increase exports through better competitiveness levels. In the process, its success would help increase internal consumption.

Dr Sant said that with the introduction of the euro, the Central Bank was hardly giving any leadership or guidance, the more so that Malta had its own financial authority. Its role had been taken over by the European Central Bank, and the Ministry of Finance could well take over its job and save Malta thousands of euros. The Central Bank no longer had any relevant function.

Consumers' rights were not being safeguarded because consumer associations were weak, had little resources and were inefficient, incompetent and often ignored. In the meantime, larger private and public organisations did whatever they wanted.

Banks had cut down on the services they offered, and introduced a number of new tariffs, some even to make good for their own mistakes. No one knew how the new utility tariffs had been calculated, but everyone was being told they had to pay. Goods were also being sold beyond their expiry dates.

Dr Sant said that despite the recession, prices and taxes had gone up. Health services had deteriorated to the detriment of the chronically ill and the elderly.

Ironically, at these times, Parliament was discussing a piece of legislation which dealt with more superfluous issues, amending the Act in conformity with EU directives. While these were also important, it was more important to implement regulations which reflected today's realities.

Malta had transposed new EU directives, often not so relevant to itself, to satisfy the EU. But once transposed, these directives remained on paper and were not enforced.

In today's circumstances, it was more important to widen the debate to encompass consumers, small self-employed and internal business. Consumers and small self-employed were complementary. Through the years, small self-employed were made to look like thieves. But the fact remained that the majority were honest, hard-working people. The bigger corporations, companies, banks and even the government were more of a threat to the consumer than the small self-employed.

Monopolistic interests dominated the local scene in what was supposed to be a free market. The truth, said Dr Sant, was that Brussels did not intervene in minor Maltese issues, leaving it to the Maltese and Gozitans to do what had to be done.

In the 1970s, when the Labour government had been condemned for supposedly being against the self-employed, it had been confirmed that the Maltese economy had expanded when the consumer had increased spending power. The PL had worked to improve the working-class situation, to sustain productivity and attract investment to Malta.

Dr Sant said the quality of life would not improve if one continued to eat away at internal resources, and under the Nationalist government the country had been doing just this for a long time. It was no wonder, therefore, that economic growth had fallen drastically over the past 14 years. This was a reality that GonziPN did its utmost to hide.

Another reality the government had not focussed on was how bad consumers and SMEs had been hit by the recession. Consumption had stagnated, sales had gone down and SMEs' problems were increasing. Money for businesses and families had dried up, as one problem led to another. At the same time, the high cost of living, which sometimes increased, further exacerbated the situation.

Dr Sant said that the government and its apologists tried to send the message that Malta was riding the recession. But one must be prudent after reading the IMF report last week.

Malta's cost of living had increased substantially at a time of recession, and this was eroding Malta's competitiveness. There were structural factors which were not related to energy, and it was now urgent that these factors be investigated.

Such an examination would reveal that over the past 10 years, Malta's competitiveness had been eroded by government decisions which found the support of captains of industry who were now finding it difficult to admit their past mistakes.

Dr Sant said that looking back at statistics for the past 30 years, one found that the fall in the rate of business by the SMEs had coincided with the introduction of the VAT system. Many had focussed on cash registers as the problem. But the real reason was that the burden of costs was too great on the economic system of a small island state like Malta.

A few months after the removal of VAT in 1997, the situation had improved, but everything had gone back to square one after the political crisis of 1998.

Another consideration was the introduction of the euro. The manner and the timing in which it had been introduced was tied to a structure of burdens. But the government continued to insist all was working well.

The tax rate as a percentage of the GDP was one of the highest, but the consumer was not getting value for money and internal consumption was being affected because costs were far heavier than they should be.

Admittedly, Dr Sant said, neither VAT nor the euro could now be changed. But Malta needed a proactive internal consumption plan with special reference to small self-employed. This would open blocked channels like Mepa, which was strong with the weak and weak with the strong, and the banks, which were still not pulling strings in the national interests.

Nationalist MP Edwin Vassallo said Dr Sant had given the impression he was still haunted by his own past.

If the PL had been in government now, the country would have ended up worse than in the 1996-98 period when Dr Sant had been Prime Minister. In order to take good decisions, one needed to have good intentions. Dr Sant had been against joining the EU and the introduction of the euro. Of whom was the PL composed?

Mr Vassallo said Malta could not do away with the Central Bank because this controlled the government.

It was important to have a culture to safeguard commercial activity as a way of life. Mr Vassallo said that when speaking about the SMEs and what was best for them, one would realise that the Economy Minister was doing what was best for them. The SMEs needed a government which appreciated their problems.

Turning to Dr Sant's proposal to incentivate consumption, Mr Vassallo said that when former US President Bush had tried to make people consume more, consumers had saved the money instead of spending it. Malta was not alone in this problem, and it should learn from experience.

Mr Vassallo said the government should keep proposing needed amendments to legislation, and he would like a discussion on the Small Business Act. SMEs and consumers did not have conflicting interests but complementary, and the country should speak about consumers' importance and about those who were serious in business. Indeed, certain large corporations should pull up their socks.

Mr Vassallo said that the university needed to have a centre responsible for technical data, which would become important in monitoring the market to know what was happening in every area of the country.

Students should not be taught that money and profit came first. People should be placed at the very focus of an SME because the country needed to have a social conscience in all commercial activity.

Concluding, Mr Vassallo said that there should be enhancements in corporate social responsibility, honesty towards consumers, respect for the environment and respect towards employees.

Labour MPs Leo Brincat, Joseph Sammut and Joe Mizzi also took part in the debate and they will be reported tomorrow.