The Malta Independent 13 June 2024, Thursday
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The Surcharge issue

Malta Independent Tuesday, 6 March 2007, 00:00 Last update: about 18 years ago

When the water and electricity surcharge was introduced in October 2005 – at the time it was 55 per cent – we were all worried as to how much we would have had to pay for these essential commodities.

Over the months the bills started coming in and every household and business had to accept this reality – that more money was needed to cover expenses for water and electricity than in the past, even if the consumption pattern did not change.

The added surcharge increased the bills heftily, and people had to make adjustments to their lifestyle in order to have better control over what they would end up paying the Water Services Corporation and Enemalta Corporation.

Some did the right thing in trying to reduce consumption and they started to be more careful in their homes. Others perhaps continued to live the way they did before but ultimately they had to pay up their dues and possibly had to reduce their expenses from somewhere else.

The decision to introduce the surcharge was taken, according to the government, because of the rapid increase in the international price of oil, something over which it had no control.

The Labour opposition was quick to mount a campaign over the issue, claiming that the government had mishandled the issue and that the increased bills would have put extra pressure on people’s way of life as their expenses would have shot up.

The government, for its part, ruled that households with low incomes would be exempted from paying the surcharge, and some 17,000 families are benefiting from this scheme which the government said was introduced to ease the burden.

The political controversy over the matter continued ever since, as the Labour Party loses no chance to say that the surcharge has helped raise the cost of living, a matter that the MLP insists upon on a regular basis in a bid to earn the people’s support.

The issue went further late last year when Labour leader Alfred Sant, in his reply to the presentation of the budget for 2007, said that a new Labour government would introduce a capping on Value Added Tax on fuel, by which it would reduce the surcharge by between 40 and 50 per cent when elected to government.

It was the government’s turn to react to this, with Prime Minister Lawrence Gonzi saying that Dr Sant’s calculations were incorrect and that VAT on domestic consumption did not exist. He went on to ask Dr Sant how a Labour government would reduce the surcharge by so much – some Lm25 million – without negatively affecting the government’s finances.

Since its introduction, the surcharge has gone up and down. For January and February, it stood at 54 per cent but this has been brought down to 45 per cent for the months of March, April and May. The government has thought it fit to announce what the surcharge would be months in advance to enable households, and in particular industry, to plan their costs.

The surcharge issue will no doubt play an important part in the run-up towards the election. The more time passes, the more Labour will mention the subject and the more the Nationalist Party will try to defend what it continuously describes as an “inevitable decision”.

But, apart from the ongoing controversy as such, both political parties would do well to inform the public more as to what their plans are to encourage more people to use alternative sources of energy. Incentives have been offered over the years and the government has tentatively tried to seek other pastures, but such initiatives have made little inroads into the Maltese way of life.

As the political parties prepare their electoral manifestos for the coming general election, the public expects them to offer details as to how they plan to tackle the subject.

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