From Dr A. Bezzina
“It is not in the national interest to double the number of cars purchased.” These are the words of the Minister of Finance as reported in another Sunday paper on the 6th of this month. These are a few words that mean a lot.
These words indicate that current regulations and future changes in car taxation aim to maintain a restriction on car imports by means of fiscal measures. The Treaty Establishing the European Communities states (Title I – Free movement of goods, Chapter 2, Article 28); Quantitative restrictions and all measures having equivalent effect shall be prohibited between Member States. And of course, car taxation in Malta has nothing to do with restricting the importation of cars (sic).
The current average age of car, bus and commercial vehicle fleets are among the oldest in the EU. Aged road vehicles have not only increased emissions but do not have the latest technology in safety and emissions control. If one of the recognized ways of reducing vehicle emissions is fleet renewal, can the Minister explain to the inhabitants of these islands how fleet renewal will take place if a new car tax law aims to maintain a restriction on the number of vehicles purchased to the current levels? In 2007, 5334 new passenger cars were purchased. At this rate it would take 13 years to replace the 70000 passenger cars that are over 10 years old. By then there would be another 100000 (excluding vintage or collectable) cars that would need replacement. The new tax regime should encourage fleet renewal and increase purchases threefold (incorporating incentives for fuel efficient choices) while creating disincentives to use old vehicles and to increase the rate of scrapping tenfold from last year’s 2500 vehicles.
Catherine Witherspoon, US expert in air quality management who gave a talk on Air Pollution on the 3rd of this month, clearly noted not only the aged car population in Malta but also the emissions from local buses. She clearly was in favour of car renewal and reduction of diesel-powered vehicles, especially trucks and buses, as a means of improving air quality. Mr Fenech can ask Minister George Pullicino about it, he was present. Of course even I would agree that the best improvement in air quality would be to remove road vehicles altogether, in the meantime let us be realistic.
The Minister of Finance was also quoted to have said, “... there is an element of congestion we need to address”. The element of congestion can only be addressed by offering a greatly (as in Mount Everest great) improved public transport system, which includes clean running buses. A single year’s takings from registration tax and VAT on this tax could have bought 270 hybrid electric buses. As regards the causes of congestion, the Minister may be surprised to discover that congestion has little to do with the number of registered vehicles on the island.
What has 280000 registered vehicles got to do with congestion when there are 220000 drivers who in turn will also be occupying the driving seats of a large portion of the 45000 registered commercial, government and public transport vehicles.
Why does congestion increase when there is heavy rainfall? Does the absence of a storm water management plan and increased development not have anything to do with this?
Why does congestion become apparent on private school days? Is this not due to inefficient school transport and dispersal of students as a consequence of the Labour government / church school confrontation of the early 80s?
Has the ADT ever bothered to study real time causes of congestion with fixed cameras and investigators on motorbikes and /or feedback from traffic wardens? The commonest causes of congestion I have come across have to do with car collisions, badly scheduled roadside works, precedence given to the construction industry to obstruct streets and roads, lack of curtsey by many Maltese drivers who block intersections just because they have the right of way, and last but not least bad town planning and establishment of massive commercial retail outlets.
The Minister mentioned recently that Lm30 million collected from registration tax needs to be replaced by alternative measures. Where did this figure come from? Was it for the year 2006? Does it include VAT on the tax and import duties from the Japanese used car imports? Between 1997 and 2002, revenue from registration tax averaged less than Lm22million (and Lm3.3 million in VAT). From 2003 information on revenue from car taxation disappeared from public access. There was a drop in car registrations in 2007 and, judging from the laments of car importers, revenue from car taxation this year is likely to stay below the Lm12million mark (VAT on tax included). Is the 2006 bumper year for tax revenue going to be used as the benchmark or the latest figures from 2008? Let us be fair and see what is fair. Lm22 million (EUR51 million) should be the benchmark and VAT on tax stays out of the equation. It is after all against EU regulations to impose VAT on registration tax. If car tax has been used for years to bolster and patch up budgetary inadequacy, should not windfall revenue such as from fuel taxes and e-gaming not be used to make good for loss of revenue from a change in vehicle taxation. Car related taxes (including fuel tax) probably built Mater Dei hospital and baled out the Maltese shipyards over the years.
Politicians often change track but if Dr Joseph Muscat eventually takes the helm of the Labour Party, his abolitionist credentials on car taxation will be a factor to contend with in the next general election. After years of “great expectations” since we became members of the European Union, consumers are talking with their pockets and leaving them closed for the moment. If the new car tax baby will smell of soiled nappies, consumers may stick to the old bangers on the roads and stay away from car dealers. What will that do to revenue, business, employment and air quality?
Albert Bezzina
MOSTA