The country urgently needed a stable and transparent method to determine its utility tariffs so that businesses and consumers could plan ahead, the president of the Malta Employers' Association said yesterday.

Pierre Fava said employers were faced with the highest utility rates in the EU and with the "unpleasant prospects of industrial unrest" resulting from an unclear policy on how the rates were set.

Addressing the association's annual general meeting, Mr Fava said this was certainly an issue where social dialogue should be instrumental in establishing a mechanism acceptable to all social partners.

He said the MEA's belief in proper management of energy prices had prompted it to propose the formulation of a tripartite energy pact that would establish the way the tariffs were determined. It would factor in the price of oil, the level of consumption, inefficiencies at Enemalta and alternative energy.

Under the pact, a team of experts would create a model for how the tariffs would be worked out in a way "that respects the constraints of public finances, social solidarity, competitiveness and market realities".

A four-year energy pact, he said, would enable businesses and consumers to plan ahead.

"We believe that there is a much better chance of a solution if the social partners put their heads together in this way, rather than taking to the streets."

He also spoke about the need for political consensus, saying the parties should "place the objective of having a competitive and sustainable economy ahead of pandering to marginal votes by making unrealistic promises. It is important for Malta to remove critical issues from the partisan agenda.

"Free medical health care, pensions, welfare benefits, student stipends - these can only exist if Malta manages to remain competitive and achieve higher rates of economic growth."

Speaking about fiscal stability, Mr Fava mentioned the MEA's recommendation that the government subsidises part of the €5.82 cost-of-living adjustment for 2010, saying it would have offered a partial stimulus to employers this year but would not have had deficit repercussions in the following years.

"It was surprising that, rather than take up this recommendation, the government opted to allocate a further increase of €10 million in energy subsidies to consumers. The energy subsidies will be difficult to reverse and will thus add further a strain to recurrent expenditure beyond 2010, since it is unlikely that the unions will ever agree to their removal."

Mr Fava also touched on what he called the bad work practices in the public sector, singling out the "scandalous" story of the three Gozitan teachers who took sick leave to go for a shopping spree in London.

"The outcome of the disciplinary procedure in the case of three teachers who preferred to go on a Christmas shopping spree in London rather than tending to their students is scandalous and sets a bad example to other employees, both in the private and the public sector.

"It is even worse that, to date, no action has been taken against the doctor who certified the teachers' unjustified absence. Such flagrant abuses are unacceptable."

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