The PN is calling for an annual income tax reduction of €170 across the board, as well as other allowances for pensioners and vulnerable families, to compensate for "the lowest ever cost of living allowance in history".

Should this not be done, it would mean that the overall impact of the lower utility tariffs would have been neutralised by the meagre 58c weekly increase set to be given in the forthcoming Budget, Opposition spokesman Tonio Fenech said this morning.

Addressing a news conference at the PN headquarters, Mr Fenech noted that, in its electoral manifesto, the PL had also promised to lower the impact of taxation on all sections of the population and reduce poverty. However, it turned out that the government would recoup the savings which the consumers made in March  from the lower tariffs, by giving them just 58c a week.

On the other hand, people like government spokesman Carmelo Abela, whose income totalled €58,000 a year, and Sai Mizzi, who earned €13,000 a month, were being treated very differently, Mr Fenech said.

He noted that, in the past five years, the weekly increase averaged €3.84.

"If we take out the 58c weekly increase for next year, the remaining amount (€3.26) would be equivalent to €170 a year," Mr Fenech argued.

For the lower utility tariffs to have an impact, he said, the government had to take this measure, he argued.

The Opposition spokesman said that people on the minimum wage and pensioners who paid no income should get bonuses or special allowances. Mr Fenech added that pensioners were among the most vulnerable and their increase should be €200 a year.

Mr Fenech expressed concern that debt was set to rise at the highest ever levels to 71 per cent of the gross domestic product.

In a reply, the government said it was ironic that the Opposition had not yet understood that families were seeing that the country was headed in the right direction.

It was ironic that the former Finance Minister did not implement the 25 per cent reduction in income tax he promised but was now asking the government to reduce income tax without saying how it should finance this.

He forgot that he wanted to increase national insurance for workers nad employers.

The government would be presenting a budget which would help those in most need, the government said.