The Malta Independent 27 April 2024, Saturday
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Ouch!!

Malta Independent Monday, 5 July 2010, 00:00 Last update: about 15 years ago

That was either careless planning or else the government has grown too arrogant to bother.

Within minutes, as we reported on Friday, Mepa announced higher charges and MRA announced a 30 per cent hike in the price of gas cylinders. The only partial mitigation came from yet another press release that announced a slight increase in energy benefits, of €25 for some families.

The previous day MRA had announced, as it does every last day of the month, new prices for fuel, which this time left unleaded petrol and LRP unchanged but increased the price of diesel.

Of course, there is the World Cup on and the weekend was approaching, so the timing looks like being planned to take most people, and newsrooms, unawares. It is hard to imagine it was just a coincidence with three bodyblows coming that late in the week and at a time people had their attentions elsewhere. It reminds one of the ill-advice tendered by an official on the morrow of 9/11 when he told communication coordinators that if they had

something bad to announce, that was the time to do it.

Taken individually, each of these price increases are small, perhaps with the exception of the gas cylinder prices, but one must take them collectively, in conjunction with the other price movements announced over the past year. With prime of place going, naturally, to the water and electricity rates.

The government fails to understand the cumulative impact of these price increases. Nor of the statistics which show that Malta, along with Cyprus had the highest rise in taxes over the past six years to 2008. It argues this and that, but fails to address the issue as a whole. Nor does it address the fact that the rise in wages has not even kept up with inflation, and that again Malta is the only country in the EU where this happened.

One could argue that consultation and impact assessments should have been done prior to the announcements, but in fact, in at least one case, that regarding gas cylinders an impact assessment was indeed done. But still the price hike went ahead.

On each and every price consideration the government has its reasons – in the case of oil products and also gas it insists that the prices must reflect the international prices; in the case of Mepa it argues that instead of Mepa being funded by the government from the taxes of everyone, it must fund itself from those asking for a permit (even so, many in this case would be speculators, but there are also people asking for a simple permit, like opening a window, and yet DNOs have been charged €60 each).

Time and again the government promises at Budget time that all price increases are included in the Speech and that there will be nothing more after that. Time and again government-induced costs spring out of the woodwork as soon as the Budget is approved. True, in the case of oil products, this depends mostly on the international prices and in the case of gas, the latest price increase was the last rolling back of the previously heavy subsidies.

But people do not follow such reasoning. For them, for us, what counts at the end is the cumulative impact on our finances. Especially after the seven month delay that ARMS took to send bills (although this is now back to almost normal service) which put an incredible pressure on people’s management of finances.

One cannot fault the government for sticking to a path where the deficit is not allowed to get any worse. That would take us along the Greek path to ruin. At the same time, however, the government’s repeated insistence that it will not follow all the other governments in Europe, big and small, along the austerity path rings somewhat hollow – are not these price increases the Maltese way of austerity?

It is more probable that for the government saying No austerity means not cutting back on programmes and initiatives, not cutting back on any of the packages it is giving to chairmen and people on boards, not cutting back on political appointees with so many government agencies, not cutting back on pet projects. For one thing, seeing that the recent much-trumpeted GDP increase in Q1 was fuelled among other things by the spike in salary increases in the public sector, any downsizing of this would mean a lower GDP.

And so it goes on: as they used to sing, The Only Way is Up.

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