The Malta Independent 29 July 2026, Wednesday
View E-Paper

The Malta Independent Online

Malta Independent Sunday, 29 October 2006, 00:00 Last update: about 14 years ago

It was with concern that the country learnt, last week, of the commitment made by the leader of the Labour Party that his government intends to halve the fuel surcharge once in office.

For it could just be CET all over again: a hugely popular gambit, which can very well land its proponent in power, but which, when attempted, proved to be elusive and even worse, damaging.

There is no doubt that the oil price surcharge is a burden that many Maltese feel very keenly, especially since this government has made the tactical mistake of keeping it separate from the underlying price of fuel products, thus reinforcing the perception that this is something added on and therefore can quite as easily be taken away or played around with.

There may be ethical or political points to ponder in this regard, for to come out with promises to cut taxes at election time can have a vast demagogic effect and unsettle the whole national economy. We can see what happened in Hungary where the main parties promised to outdo each other in cutting taxes and ruined the national economy as a consequence. Hopefully, the Maltese electorate is more mature than that, as it did in 1976 when it refused to buy Dr George Borg Olivier’s promise to abolish income tax. But then, the same Maltese electorate some years down the line, bought Dr Sant’s promise that it could do without VAT. Even before a Labour government was sworn in, that commitment in itself was sufficient to make many retailers jettison their cash registers and many people to just refuse to pay their taxes.

Elsewhere in this issue, the Nationalist Party and government quite rightly ask where Dr Sant would get the equivalent revenue from and highlight the difficult choices it would face: if it does not want to cut government’s expenditure on wages and pensions, it would have great difficulties to shave them from an already tight expenditure on projects and initiatives. Nor does it seem that capping tax revenue on oil imports and reducing inefficiencies in power generation could do the trick.

The real issue the country would do well to understand and accept is that any such tampering with the full impact of the international oil price would produce deeply-damaging consequences on the Maltese economy and on the consumption patterns of the Maltese – for that is what, ultimately, we are talking about.

It would distort the whole way the economy works, given the infinite repercussions and ramifications of oil and fuel on the economy as a whole. And, more seriously, it would fool people into continuing with their wasteful energy consumption patterns just as seriously as the cheap oil available in the US distorts that economy and leads to wasteful expenditure patterns. And by the same token, in the oil-rich Gulf States on the other side of the globe.

For this is a country with huge car density, with car-choked roads, asthma-producing tarmac strips cutting through village cores, with houses that are simple concrete boxes with no thought given to energy conservation and efficiency and, ultimately, a people born and bred to expect the government to shoulder the responsibility that should be carried by the citizens. In this world, everything is free from cradle to grave and the government is everybody’s mummy and, when something bad happens, the government-mummy covers up and protects its sweet, little ones who remain protected and preserved from the hardship of growing up and facing up to their responsibilities.

In this world, the government, through its actions and more its inaction, actually helps the citizens to be wasteful. And we have seen, haven’t we, that any social initiative undertaken, from the karta r-roza to social assistance, created to alleviate the hardship suffered by the few ultra-poor, suddenly became the “right” of one and all, whereas it should have been the other way round.

If this is what a future Labour government is all about, then tell us, for we may not want to be part of it. Here we have a government that, instead of getting smaller, actually gets bigger, by messing around with the price of fuel and playing around with the rest of the budget in order to fulfil this one commitment.

Yes, it is true, the overall price of oil, surcharge and all, is steep for each and every one, the poor and not so poor. Yes, the steep increase in international oil prices has put a burden on the shoulders of all. Yes, more can be done, and must be done, to import our oil at the lowest prices possible and to eliminate any inefficiency in fuel generation and distribution. But, yes, we must do more to become a more fuel efficient and less wasteful country and to promote all kinds of fuel conservation measures.

One would have thought that the Labour Party believes all that it has been saying – that its studied programme updates would be better than this government’s, and that as a team it is a better team than the present one. Let not the perception be nurtured that the inclusion of this CET 2 is a sign that all the updates and positioning are just not working.

  • don't miss