Finance Minister Edward Scicluna this morning said it was a scandal how “our children” would have to pay for a power station that no longer existed because of the failures of successive PN governments.

Professor Scicluna was addressing a pre-budget meeting with stakeholders.  The energy issue arose after GRTU President Paul Abela reiterated his call for a 30% reduction in energy tariffs. He noted that the price of oil was currently around $40 a barrel while low prices for energy, as low as 3 centre per unit at night, could be fetched using the interconnector. “The 30% we are requesting is more than conservative,” Mr Abela said. He urged the Minister to commission a survey to study the difference in the cost of energy production since May. He reminded the minister that Enemalta was a private company and the Malta Competition and Consumer Affairs Authority (MCCAA) should check the prices.

In reply, Prof. Scicluna gave a detailed overview of how successive PN administrations had failed to pay off Enemalta’s debts, which have to be recouped through energy tariffs. He said the PN government had invested in the Delimara power station in 1988, which was paid through a bullet loan from a German bank. “They paid neither for the capital nor for the interest. Enemalta ended up with a €800 million debt because it was borrowing money to pay the interest. It was on the verge of defaulting.” The PN, he said, then came up with the most complicated Special Purpose Vehicle Malta ever had to save Enemalta. “What they did was to package the debt into an SPV and borrowed money to pay the bank so that the corporation would not default. The government had to offer a guarantee of €320 million on an SPV so that my children and yours will be paying for a power station that no longer exists for years to come. That is a scandal. Enemalta has this burden, past and present, which has to be paid through its tariffs.”

‘President has been reduced to a beggar’

Retail entrepreneur Reginald Fava said the government needs to take bolder steps in the health sector. “Our health sector is a failure. We have turned our President into a beggar, begging for money for medicines that are essential to cure the sick. The government should take stock of the situation and take some bold decisions in that sector.”

Mr Fava said another area of concern was the middle class, adding that people in retail were not feeling this ‘feel good factor’.  “The main cost for our country to be competitive is energy. If there will be an opportunity in the future to reduce energy tariffs, even when considering the low price of oil, it would help us move forward further.”

Prof. Scicluna the government provided a vast and growing list of medicines but some medicine was simply too expensive. There were two options, either taxing people further to pay for these medicines or giving them the option of donating voluntarily, which many preferred and did.                  

MHRA President Tony Zahra insisted that the government had to balance the budget. “If we do not balance the budget now, at a time when the economy is growing fast, when will we do this? This has to be done now.” Mr Zahra said there were several sectors where spending could be cut, even if this could prove to be unpopular for politicians.

On the tourism sector, Mr Zahra said many hotels were investing in efficient units. Unlike the GRTU, the MHRA is not calling for a cut in tariffs but for schemes that would help businesses invest in sustainable units. He also warned on Enemalta, saying that “if we get it wrong, we get the whole island wrong."

Lorraine Spiteri, the chairperson of the Malta Confederation of Women’s Organisations, called for more incentives to increase female participation in the workforce. More women should hold decision-making roles, she said. Ms Spiteri also called on the government to act on domestic violence.

In his opening remarks, the Finance Minister said rround 2,000 long term unemployed who found work thanks to the government scheme to pay two thirds of their benefits for the first year.  While the scheme was controversial and might discriminate with those already working for a minimum wage, it was a huge success. Prof. Scicluna also insisted Malta was “on top” as far as tax burden on labour goes.

Manufacturing was growing, despite the situation at ST, he said. Value added was also growing.

 

Prof. Scicluna said Malta’s economic growth forecast is 3.2%, according to the EC and the government.  On the deficit, the minister said the government slowly but consistently reaching its target. There were some risks, he said, including an additional €30 million the government had to fork out as part of the EU membership agreement and Enemalta. He also announced that the Finance Ministry would start drafting indicators for ministers to know exactly what their ministries were costing. In the upcoming budget, the government would be investing in a number of key sectors, which are institutions, education, infrastructure, environment, energy, health, Gozo and social inclusion.