Taxpayers should not subsidise construction industry - de Marco

People's taxes should not be used to subsidise the construction industry, the Parliamentary Secretary for Tourism, the Environment and Culture, Mario de Marco said, reacting to claims that the new planning authority processing fees dealt a blow to the sector.

The fees, published on Thursday, come into force on July 16 through a legal notice fulfilling a government promise made in Budget 2010 to make the agency self-financing.

The Malta Environment and Planning Authority used to charge a flat rate depending on the type of unit to be developed but it will now be charging per square metre.

The Chamber for Small and Medium Enterprises - GRTU criticised the tariffs saying the construction industry was still in recession. It accused the government of a contradiction in its policy towards industry and development, saying it was not right that some areas were preferred over others.

When questioned about this, Dr de Marco, who is also responsible for Mepa, said the rates should not be considered as a blow to industry. "Everyone knows construction has its costs and its profits. I don't think those who are building are doing it for charity. And when you consider the expense to process an application it is only a fraction of the costs incurred."

"All the government is saying is: Does it make sense for Mepa's expenses to be subsidised by people's taxes? So far, Mepa's costs were covered by a government subvention, which is nothing more than taxes."

He went on to ask if it was fair that someone who had never applied for a building permit had to subsidise someone who filed an application. "The logical answer is no. There is no reason why the construction industry should be subsidised by the people's taxes."

Dr de Marco said the fees had not been revised since 1993, so they were not covering Mepa's current expenses.

"We also chose a fairer system. Whereas before fees depended on the unit, now they depend on the dimensions of the site, so the bigger the place, the bigger the fee.

"In the past five years, the government subsidised Mepa to the tune of €45 million. Is it wise to go on like this? This is the question we all have to be asking ourselves," Dr de Marco said.