Noel Grima

Following his presentation of the Pre-Budget Document, Minister Edward Scicluna found himself pressed mostly about energy prices, following the GRTU demand for a further cut in energy prices (see page 2) and the Opposition joining in on Sunday.

Rising to ask the first question, GRTU president Paul Abela defended himself against what the minister was reported to have said about the GRTU demand.

Oil is now at $40 a barrel and the government is getting cheap energy through the Interconnector at 6c a unit which at night goes down to 3c. And the BWSC plant is so efficient that Enemalta is saving $1 million a month.

Since Enemalta is now in the private sector, the MCCA should intervene and ask Enemalta to review its prices.

Minister Scicluna replied he had attacked Dr Busuttil and not GRTU in his remarks earlier in the week.

Then he explained why the government will not further lower the energy prices.

In 1998 the PN government built Delimara I power station taking a loan from a German bank on the commitment it would not pay the capital until December 2012 but only the interest accruing.

The successive PN administratioons did not even pay the interest and Enemalta ran up a deficit of €830 million.

In mid-December 2012 with all the political turmoil that was going on, Enemalta was very near defaulting.

The PN government created a 'strange' Special Purpose Vehicle on the advice of PWC and put all Enemalta's debts on this SPV so as to pay the German bank.

The then Opposition, today's government, went along with this proposal.

Now this government has guaranteed €320 million so as to extract Enemalta from this situation.

Our children will thus have to pay for the non-payment from successive PN governments.

It is for this reason that the government refuses to further cut electricity prices because Enemalta's revenue will be paying for the present and the past.

But the minister's explanation did not seem to convince people present.

Reginald Fava, past president of the Chamber of Commerce and noted businessman, praised the government for taking some bold steps but much remains to be done.

We speak of free health but our health system is full of holes. The President of the Republic has been reduced to beg for funds to cure the sick. The government must take bold decisions.

Also, Malta's backbone is the lower middle class and the growth that is spoken about is not felt by the sector. People in retail do not feel the growth or the feel-good factor.

Anthony Fenech from the Chamber of Commerce pointed out that energy costs are one of the biggest costs of business, which is competing against big businesses.

As to the minister's claim the government wants to avoid shocks, Mr Fenech asked: What about the excise tax increase on wine at Christmastime? Or the maternity leave increase that was announced in June or July? Or the law about the employment of people with disabilities?

There is need for more insistence on R&D and something must be done about the traffic.

Minister Scicluna replied that he is still unhappy with the Budget process and has asked for IMF help in this regard.

His colleagues at Ecofin tell him they announce excise tax increases even a year in advance and there is no sudden spurt of buying whereas in Malta all it needed was one week's notice of an excise tax increase on cigarettes and all shops were cleaned up.

Health is not free: we pay for it. Not everyone has medical insurance and the government is trying to encourage people to take medical and life insurance as some medication is highly expensive.

The government is targeting the lower middle class over the coming months.

Josef Vella, UHM secretary general, said it is a pity that the Household Budgetary Survey has not come out. The previous one, in 2008, had shown there are families earning under the minimum wage.

He pointed out UHM is not in the COLA sub-group at MCESD and that no one knows how big is the underground economy. He also urged Active Labour Market policies to examine what is happening with the influx of so many foreigners. Finally, he warned against PPPs in the health sector for experience has shown they did not bring about the benefits they promised.

In reply, Minister Scicluna agreed upon the extent of the underground economy which is very high in Malta after Greece and Italy.

He also announced, in a somewhat cryptic way, that the government will bring in a cap on cash transactions to put an end to the black economy.

MHRA's Tony Zahra said that if Malta does not cut the deficit to nil when it is on a growth path, when will it do it? Ireland did so and everybody took a cut.

Public debt is near 60% but it is still going up.

We need to cut more than we are doing and there are plenty of places where to cut from.

Such arguments will not, of course, make politicians popular.

As regards energy prices, his sector needs more incentives to help invest in more efficiency units and for upgrading.

Enemalta is the key to Malta's success. If we get it wrong, then all Malta will suffer. He urged the government to go beyond growth and develop a wider development plan.

Joe Farrugia from the Malta Employers Association said people must be careful about careless words about boom years for such can carry the seeds of their damnation.

There are some 20,000 foreign workers in Malta at present and we must look at the infrastructural needs this presence brings with it.