Prime Minister Lawrence Gonzi said yesterday the people's taxes should not be used to subsidise Enemalta and insisted that consumers be more careful about wastage as the government invested in alternative energy sources.

In order to achieve this, one had to sit around a table to discuss in a mature and responsible way the decisions that needed to be taken, he said.

Dr Gonzi said that the time had come, yet again, to make difficult and unpopular decisions for the good of the economy and to ensure more and better employment for everyone. The government needed to respond to the big challenges it is facing with courage and sensitivity towards the country's families.

Dr Gonzi was speaking at a dialogue meeting in Victoria, which also included the participation of Finance Minister Tonio Fenech and Infrastructure Minister Austin Gatt.

Dr Gonzi said consumers should pay for the energy they consume and make an effort to waste less and invest in alternative sources of electricity.

He insisted that the Nationalist Party always held the notion of social justice close to heart and would therefore continue to look out for the 30,000 families in need.

He reminded supporters that similar storms had already been weathered in the recent past when factories had started to close. This resulted in the generation of new and better jobs in other sectors such as financial services.

Dr Gatt said that last year Enemalta received more subsidies than Malta Shipyards ever did in a single year. But even with the surcharge it still registered losses and had to borrow €150 million to buy oil and pay wages. He said that the public was subsidising energy for those 120 enterprises that were using huge amounts of power and that, instead, these companies should pay for energy at cost price, at least. Had these subsidies not been given, the surcharge would have been sufficient at 75 per cent and would not have had to be increased to 95.

While electricity production cost Enemalta 18c per unit, industry was getting it at 8c per unit. Such operational subsidies could not continue. Industry could instead be assisted to invest in photovoltaic panels, night meters and power-factor generation methods, for example.

The reason the government was proposing the new tariffs now was because the oil prices seemed to have stabilised and were hovering between $90 and $100 per barrel, despite the global financial crisis. Dr Gatt argued that this decision cannot be postponed any further.

He said that the cycle of paying subsidies to Enemalta to reduce the cost of electricity and water needed to stop. Instead, consumers should pay directly for the energy they consume and the government should give subsidies to Enemalta for investment in infrastructure.

Mr Fenech said Enemalta was borrowing money for its consumption, like a family taking loans to pay for food and electricity. Borrowed money, he said, should be used for investment not for consumption.

He pointed out that, because the situation turned out to be worse than predicted by the government, Enemalta had to be subsidised by €68 million instead of €24 million as was allocated in the last budget.

Enemalta needs to invest in its infrastructure in order to meet the demands of the country that will double within the next 10 years.

"Let's sit around a table. We have come up with five proposals. We are ready to listen if you have a sixth one. But we have taken this decision: the road ahead cannot be subsidies. The road ahead is to invest in systems to conserve energy," Mr Fenech said.

He added that the government was studying further incentives to help families reduce their consumption, mentioning, as an example, the electoral promise of giving five free energy-saving bulbs to each household.

Referring to the University dispute, Dr Gonzi said the first priority for the government was the future of the Maltese and Gozitan students, their careers and their academic formation. He said that lecturers too saw this as their priority. Dr Gonzi explained that, although he would like to raise everyone's wages, there was a line that could not be crossed and that any pay rises must be reasonable.

Talking about the EU pact on irregular immigration, Dr Gonzi said that, despite the fact that all member states had agreed on the need for a common policy on the issue, Opposition Leader Joseph Muscat thought otherwise and insisted that the pact should not be signed. The pact would give Malta financial backing and help to repatriate those immigrants that do not deserve refugee status, Dr Gonzi explained.