The GRTU, Chamber for Small and Medium Enterprises, yesterday hit out at the government over the proposed utility tariffs, describing them as socially unjust and a cover-up for Enemalta’s inefficiencies.

During a press conference, GRTU director general Vince Farrugia said that the new tariffs were socially unjust with low electricity consumers hit the hardest, compensating for high electricity consumers.

“The rates of increase are higher for smaller businesses while the large businesses get away with paying lower rates,” he said.

The GRTU carefully analysed the report presented to the Malta Council for Economic and Social Development last week with a list of five proposals for new utility tariffs.

Mr Farrugia pointed out that businesses consuming between 8,000 and 12,000 kilowatts per hour (Kwh) should expect an increase of 27 per cent and consumers falling in the 4,000 Kwh and 8,000 Kwh should expect an increase of 41 per cent.

However, he explained that businesses which have a high consumption will not register such a high increase. In fact, businesses with a consumption of 800,000 Kwh and 1 million Kwh will register a 7.1 per cent increase while those falling within the 1 million and 5 million category will have a five per cent increase.

Part of the problem is due to the state monopoly on the distribution of fuel, argued Mr Farrugia. “Unlike other countries, the commercial sector does not have a choice – unlike other EU members. It has been the government’s responsibility through Enemalta to live up to its responsibility of providing a service at par with its EU counterparts.”

“The country is paying for the inefficiencies of Enemalta and the Water Services Corporation,” said Mr Farrugia.

The GRTU is proposing to keep the present surcharge mechanism until a comprehensive consultation period to discuss the proposed tariffs is held.

“The proposed tariffs will cost the country a total of e416 million – about e1,014 per capita,” he said.

The chamber called on the government to shelve the tariffs and to keep the current surcharge system. However, the capping system has to be removed, added Mr Farrugia.

“Removing the surcharge goes against all past promises made by the government and is unacceptable,” he said.

In a separate press conference, the GRTU also presented its proposals as part of the pre-budget consultation period for property.

Representing GRTU property developers, Sandro Chetcuti said a collective effort by all the stakeholders has to be made to ensure that the property market does not fall victim to the credit crunch.

Mr Chetcuti explained that there are three main issues that concern the GRTU: oversupply in residential properties targeting first-time buyers, stringent banking conditions and indecision by prospective buyers.

He pointed out that, at present, there is an oversupply in the property market caused by higher rezoning densities by the Malta Environment and Planning Authority, low interest rates and a number of inexperienced property developers in the market.

In its proposals, the chamber is calling on the government to invest the planned e20.9 million allotted for the construction of 300 social housing units to setting up incentives for first-time buyers instead of developing more property.

It is also suggesting to introduce tax credits for buyers who decide to rent property instead of buying and boosting the shared ownership scheme which, in turn, would boost the sale of property.

Furthermore, a taskforce with all the stakeholders should be set up to examine practical ways of addressing the problem of excess housing units through the introduction of mixed used zoning allowing commercial outlets to operate from residential areas.