Prime Minister Lawrence Gonzi said Budget 2009 and the new energy tariffs reflect the need to change the country’s energy culture, and this is precisely why subsidies to Enemalta have to stop.

Speaking in Parliament yesterday evening, Dr Gonzi was giving a counter-reply to Opposition Leader Joseph Muscat’s reaction to Budget 2009 in Parliament on Monday.

“Subsidies are like a debilitating disease, because they make you take your consumption patterns for granted. Subsidies do not help the country make the required changes, simply defend the status quo – that won’t get us anywhere,” said Dr Gonzi.

The prime minister congratulated Dr Muscat’s first speech in reaction to a government budget, but later went on to criticise the Opposition’s failure to acknowledge the fact that Malta too, like the rest of the world, was facing a very difficult time.

The prime minister kept referring to Dr Muscat’s failure to make reference to the international credit crunch, and the fact that the Opposition seems to be happy to keep things as they are.

He said that subsidies will still be given to those in need and said it was no joke that one out of every six families will be receiving the energy benefit on their utility bills.

Most of these people are elderly people, he said, as he gave a long list of people who will be receiving the energy benefit.

Taxes should go towards systems that ensure that energy is not being wasted and create incentives in favour of the use of alternative energy systems.”

He trashed the Opposition’s claim that the new energy tariffs reflect a surcharge rate of 245 per cent.

Dr Gonzi said the government’s estimates show that in reality, with the new energy tariffs, the surcharge rate would be between 125 and 135 per cent.

He said 80 per cent of families will be paying an extra e0.85 to e1.45 on their energy bills. And on energy saving bulbs, Dr Gonzi said that a bulb burning for five hours would result in savings of e175 a year.

He went on to refer to the Opposition Leader’s call for courage, saying there was common ground between the two parties on this concept.

In fact, he said, the PN’s slogan Flimkien Kollox Possibli (together, everything is possible), referred precisely to the need to be courageous.

There is a difference between the two parties’ interpretation of the word “courage”, said Dr Gonzi, adding that it would mean nothing if we fail to believe in the country’s ability to be successful.

“We have the courage to carry out reforms, but the Opposition’s concept of courage, as summed up in Dr Muscat’s speech on Monday, seems to be that of trying to get away from the challenges we face. This is another one in a long list of bad advice given by the MLP when faced with crucial decisions,” said Dr Gonzi.

It seems like the Opposition’s message is “corraggio, fuggiamo” (come on, let’s run away), but the government is different, he said, adding that it wants to bring the country forward and carry out the necessary changes.

The prime minister said he is proud of the country and the Maltese people and the achievements over these past couple of years. He mentioned in particular the smoothness of the euro changeover.

“My first priority when taking decisions is always the impact of our decisions on jobs and on the country’s competitiveness and resources.”

Dr Gonzi said Budget 2009 brings together a long list of proposals aimed at the country remaining strong in the face of the big challenges as the world goes through this difficult time.

He said Budget 2009 is different to previous ones due to the unique circumstances faced by the whole world and he warned that everyone will feel the effects of the global credit crunch.

Referring to what Dr Muscat said about the government’s expenditure having increased by e70 million before this year’s general election, Dr Gonzi said this was obvious, since the government had started issuing the promised children’s allowance payments in January 2008.

Moreover, the government spent an extra e30 million in health, (e11 million of which were spent on medicines alone) an extra e22 million more in the energy sector, an extra e10 million on agriculture, and an extra e5 million on education, said Dr Gonzi.

He criticised the Leader of the Opposition for having said it was not the right time to introduce the euro at the beginning of the year. “Experience has again proved us right,” said Dr Gonzi, referring to the country’s smooth changeover.

He said Dr Muscat failed to speak about the global financial crisis in his Monday speech, even though the extraordinary credit crunch has been worrying people the world over.

On the income tax reductions, Dr Gonzi said that over three years, the government would have put e152 million in people’s pockets and it was implementing the first phase of electoral commitments related to income tax cuts.

“These reductions are intended specifically to encourage people to work more. Together with income tax reductions last year and the year before that, the government is dedicating another e12 million towards further reductions.”

The prime minister went on to speak about the new vehicle registration tax, saying that it was intended specifically to encourage people to buy new, smaller and more environment-friendly cars, a concept which naturally benefits people’s health and the environment.

He said people will now pay less on registration tax and VAT, but the vehicle licence fee will be hefty for large, polluting cars.

“The vehicle licence fee for cars with a small engine will not increase by much, but it will increase drastically for cars in other categories that are harmful to our health.”

Dr Gonzi said the government is considering adjustments in the vehicle licence fee of old diesel vehicles with a large engine, purchased about 10 to 15 years ago when diesel was much cheaper than petrol.

“I received emails from people who said it was unfair that they would have to pay as high a fee as others who have large, luxurious cars. We’re considering revising the fee for these vehicles,” he said.

Reacting to a comment made by Dr Muscat on Monday, the prime minister said Malta had the best performance among the new EU members in terms of absorption of EU funds. He also tabled a list of all the approved projects carried out by means of funding from the EU.

He praised Dr Muscat’s environmental proposals and said the government would be looking into them, but asked what the Opposition’s economic strategy was.

Again, he referred to the radical change that the government wanted to bring forth in the energy culture and said there was a huge demand for photovoltaic panels.

“People are responding and want to invest in alternative energy. This is why we had to stop subsidies,” he insisted.

Dr Gonzi said that the Malta Council for Economic and Social Development (MCESD) agreed that we should pay for what we consume.

As he brought his speech to a close, he told the Opposition: “On the energy issue, I need you. We are facing big challenges and this period of time calls for a collective effort and a sense of dedication to overcome the challenges and possibly make the most of the opportunities that come our way. We cannot be divisive, especially on the energy issue”.

Dr Gonzi referred to the strong social network built by different governments over the years, the country’s huge investment in modern technological systems, and investment in education systems that have been bearing fruit.

“Our investment is giving results. We have students who want to learn. We have come a long way and we have a beautiful country. We also have an ambitious vision for the country – Vision 2015, which I believe is achievable if we work together,” he said.

Being a small country, we can be flexible, he said, but it is extremely important to work together.

Following a division, Parliament approved a motion, with 34 votes in favour and 31 against, on the budget’s general estimates 2009 as given in the prime minister’s address.

Parliament reconvenes this morning with a debate on the first set of budget estimates.