The GRTU, Chamber of Small and Medium Enterprises, said the electricity and water tariffs announced in legal notices 330 and 331 would badly hit most small and medium enterprises and lead to business closures.
Analysing the tariffs, the GRTU also accused the public regulator, the Malta Resources Authority, and the financial regulator, the Malta Financial Services Authority, of failing in the duties the law imposed on them.
There were only few businesses in today’s circumstances which, the GRTU said, could raise prices and pass on to consumers increases they faced, as the government seemed to want them to do.
Figures which it had showed that businesses which were not making losses today would end with a loss because of the new tariffs and they would have to make good for this by laying off staff.
The tariffs, imposed on small and medium business without compunction, are the worst Christmas present the government could pass to them, director general Vince Farrugia said.
The minister responsible for Enemalta Corporation had decided not to tell the whole truth about the corporation’s situation and the tariffs were being imposed at this exaggerated level, regardless of what was happening in the economy and the oil market, because Enemalta was in huge financial difficulties and the government had no means to sustain it except by making the small and medium enterprises carry the burden themselves.
The fact that the MRA does not insist with Enemalta, as duty bound, to publish its financial situation every six months, and that the MFSC does not insist with Enemalta to publish its audited accounts as laid down by law, gave rise to the suspicion that there was a crisis at Enemalta.
There was also the suspicion that everything that was being said about the tariffs was just a screen to hide the situation.
The proposed tariffs have no scientific basis which could be understood by all those who follow the oil markets and the only reason left was that the government wanted to raise enough revenue to hide Enemalta’s failures, the GRTU said. This was why Enemalta has not issued its audited accounts for the last three years.
The GRTU said figures in a report drawn up by accountants KPMG on information supplied by Enemalta have been changed at least three times. A proposal was made at the beginning of October which showed that no matter what, Enemalta was going to rake in the same amount of revenue under five different proposals – e365 million each year.
On 23 October another proposal was made, and then the final proposal was made at the Malta Council for Economic and Social Development on 28 October, which was hardly different from the previous one. They all were essentially the same.
The GRTU said it was leading among constituted bodies and trade unions to present a detailed analysis of the tariffs and analysis by KPMG and it had come out with an alternative plan of mitigation. Talks were also held with the Finance Minister, the Prime Minister and the Deputy Prime Minister, but the result was the legal notices imposing the new tariffs.
The government ignored all the work the GRTU put in and was ignoring the hardships it was imposing on small and medium enterprises and in fact stiffened the tariffs on businesses. Instead of easing the burden on small and medium enterprises, the government had burdened them more.
The tariffs announced in the legal notices, the GRTU said, showed exaggerated increases on all categories of bills for commercial establishments – 15, 14, 12.7, 11.5 and 10.4 per cent on those proposed on 28 October.
These increases were imposed on the tariffs announced in October and were far higher than the tariffs according to today’s bills, which include the old tariffs and the 95 per cent surcharge.
Those using 10,000-20,000 units each year will add 17 per cent to their costs on today’s bills.
Those using between 20,000 and 60,000 units a year will add 37 per cent to their costs on today’s bills
Those using between 60,000 and 100,000 units annually will add 17 per cent to their costs on today’s bills and those using between 100,000 and 200,000 units a year will add four per cent to their costs on today’s bills (“today’s bills” includes the 95 per cent surcharge). A five per cent Vat rate has to be added to all bills.
The government strategy of forcing 41,324 small and medium clients to subsidise 531 large clients who use more than 200,000 units was not only unjust but also shamelessly breached the EU electricity directive, which does not allow such cross-subsidisation, the GRTU said.
The government was committing a blunder by steamrolling on with this strategy, no matter what Enemalta’s miserable financial situation was.
Electricity and water were essential and these two services should not be operated solely on commercial criteria and according to Enemalta’s and the Water Services Corporation’s balance sheet.