'Further energy price hikes envisaged'

Minister Austin Gatt has warned that throughout this year, international prices of refined fuel oil are expected to increase by 43 per cent and those of gas oil by 57 per cent. Speaking during the debate in Parliament on an opposition motion to revoke the new utility tariffs, Dr Gatt said that instead of increasing electricity tariffs, other countries like Greece, Spain and Portugal had decreased salaries and wages.

In 2010, 73 per cent of Enemalta's budget was to be spent on buying refined oil at market prices amounting to €207 million. The new tariffs only included inefficiencies over which Enemalta had no control, such as shift work and manpower overstaffing expenses. Enemalta spent €77 million on non-oil expenses, including €34 million in wages to its workforce.

Enemalta and the Water Services Corporation's income would be made up of €385 million from tariffs and €44 million in government subsidies. Unrevised tariffs meant that Enemalta would have a shortfall of €84 million.

Dr Gatt accused the opposition of failing to take a position on international oil prices. It was unjust to use the Budget to subsidise consumption or those who did not qualify for any subsidies.

He concluded that the government's aim was economic sustainability.

Resources Minister George Pullicino said that despite the opportunities given by the MRA, the Għaqda Unions Maltin had failed to put forward submissions on the principles adopted in setting the revised tariffs. They had also refused to take part in the public consultation process.

Mr Pullicino said four fundamental principles governed the revision process - conformity with laws, regulations and directives; profitability of corporations with an acceptable return on capital; tariffs not being discriminatory, and transparency on information to the consumer.

Certain unions had failed to take note of the government documentation which included social impact assessments on bills received by families and industry. The MRA had lowered the Enemalta request by €8 million and insisted that Enemalta make adjustments on revenue and expenditure for 2009 and 2010.

Mr Pullicino said it was unjust to ignore the schemes which the government had introduced to save energy consumption.

The government had given €22 million in assistance to families on energy-saving measures and on tariffs. Parliament had voted another €10 million to assist vulnerable families. A new scheme for the installation of photovoltaic panels would be announced soon in view of the success achieved in another scheme last week.

The minister said that the opposition had agreed with the climate change document and had not requested a vote on this document, which among its principles included that the price of electricity generated should reflect the true cost.

Earlier, Labour MP Anġlu Farrugia said it was now evident that the government had been lying to the public every time the PN manifesto said that the Marsa power station would be decommissioned. It was obvious the government had lost all value of social justice. This was a national call to address the situation.

Dr Farrugia said the official unemployment figure stood at almost 8,000. It showed an upward spiral, with several jobs being lost in manufacturing, construction and tourism - exactly the three major sectors that were facing the greatest hardships with the water and electricity rates. In one year these sectors had forked out over €58 million more in comparison with the rates prevailing in the previous October.

By comparison, Malta was paying 35 per cent more than Cyprus per kilowatt of electricity. This was all the more telling when one kept in mind that an employee in Malta was earning 36 per cent of the European average, while one in Cyprus was earning 93 per cent of that average.

Gavin Gulia (PL) said no trade union or employer association was agreeing with the government, but the Prime Minister was continuing to persist in his error.

The self-employed were am-ong the worst affected sectors as they would face higher business bills as well as higher bills at home. Private sector organisations such as the GRTU had warned that the tariffs could mean hundreds of job losses. It was time for the government to heed the warnings.

Labour MP Carmelo Abela noted that the president of the Chamber of Commerce and Industry, Helga Ellul, had also warned about the consequences of the tariffs and the lack of consultation before their introduction.

These tariffs would further harm the manufacturing sector because they were higher than in competing countries. Government assistance, he said, should be in a manner which made sense.

Marlene Pullicino (PL) said the crucial factor was that the reform was instituted at a time when other governments were trying to infuse more funds into people's pockets.

The government was not new to the scene, just as the aspects of oil prices and targets were not new, but none of this had been addressed over the years. Also to be investigated was the lack of alternative sources of energy. The opposition agreed with the government's reform, but it was too little too late.

The government was to be condemned for its choice of a new power station with its known very bad effects on climate and people's health. These were decisions against what the government itself had planned.

Of course Malta needed to address the problems at one time or another, but the reform at this time was undermining the future of Maltese businesses and families.