Taxpayer shall not subsidise businesses, Gonzi insists

Prime Minister Lawrence Gonzi strongly defended the increase in gas prices, saying the government refused to use taxpayers' money to subsidise businesses.

"The new price was tied to the international cost of gas. The government has been subsidising the price of gas but now we feel it is time to bring it in line with international prices while helping those who are vulnerable," he said during a radio interview yesterday.

The revised prices, announced on Thursday, saw the price of LPG gas increase by over 30 per cent after the Malta Resources Authority approved price increases for the only distributor on the island, Liquigas Malta. A 10kg cylinder now costs €11.80, up from the previous price tag of €9 while the cost of a 12kg cylinder increased from €10.50 to €13.90.

Gas cylinders were not only used domestically but also by businesses, especially restaurants. "Why should taxes be used to subsidise commercial activities? These should be incentivised and not subsidised," Dr Gonzi said.

The government helped out 28,000 families on low income by increasing their energy benefit. About 13,000 families, where at least one person was elderly, would receive an extra €25 and the rest will get an extra €15, he said.

Turning to medicine prices, Dr Gonzi said it was very positive that 62 medicines became cheaper but added that the government would not stop there. "The prices of more medicines needs to be reduced. The importer has to make a profit but it has to be a fair one," he said.

Dr Gonzi also spoke about the recent investment announced by STMicroelectronics to build a new high-end production line at its Kirkop plant. The company's presence in Malta was very important as it amounted to half of the value of the country's exports, he said.

The company, which was affected by the international recession, had great faith in Malta and this was reflected in its decision to invest, which will generate added-value jobs, Dr Gonzi said.

Turning to a recent report that said Malta could be fined €400 million if it failed to reach EU energy targets; Dr Gonzi said it was "technically incorrect". "The €400 million is a total of all the scenarios if Malta fails to meet all its alternative energy targets," he said.

It was not fair to say that the government was not working in promoting alternative energy because it had implemented a number of initiatives that promoted businesses to invest privately.

The government was waiting for the final study on the strength of the winds at Sikka l-Bajda, a site earmarked for a wind farm. "Hopefully, the results will be positive and so attract private investors. We hope to conclude the process soon to start moving forward," Dr Gonzi said.