It has been reported that Malta is amongst those topping the charts when it comes to cost of living increases. Under the consumer chapter, the Labour Party’s electoral manifesto stated that for regulators to be of service to consumers they had to fulfil their obligations by being proactive through increased effective autonomy – Irridu nassiguraw li r-regolaturi ewlenin iwettqu d-dmirijiethom tagħhom billi jkunu proattivi b’aktar awtonomija effettiva għas-servizz tal-konsumatur. It also promised that restraint on the cost of living was of importance – Ghan importanti ta’ Gvern gdid ikun li titrazzan l-gholi tal-hajja.

Government’s policies have led to cost increase rather than restraint

I refer to two cases. Last year, a service station owner planned to reduce the selling price of diesel from his pump by 2c. Consumers thought that they would benefit from competition but their expectations were dashed as shortly afterwards it was reported that the service station owner had been pressured to reverse his decision. In another case, this year a substantial number of parents were notified that, with effect from the coming scholastic year, the cost of school transport was to increase drastically.  It is claimed that the increase will nullify the effect of the €150 tax credit granted by government and parents have been left bewildered.

These cases concern everyone. They are consumer issues and such practices taking place in the free market raise serious questions. Why can the owner of a service station not unilaterally decide to reduce the price of fuel sold from his own pump? Why, despite the number of players in the market, are consumers not reaping the benefits of competition? Why, despite the fact that we have experienced an unprecedented reduction in the price of oil on the international market, do the prices of petrol and diesel in Malta remain amongst the highest in Europe? Why do we have a situation where both consumers and petrol station owners are complaining about not getting a fair deal as a result of this unprecedented oil price reduction? Why is the government defending the big guns in the market rather than the consumer and the self-employed small business owner?

Why, despite the reduction of fuel prices – although minimal – are parents faced with an increase in school transport fees? Why is this taking place despite government claims that it has reduced water and electricity costs for business by 25 per cent? If traffic congestion is a contributing factor to this price hike, does it therefore mean that this is a government-induced cost for which families are being made to pay – thanks to the government’s failure to address the issue? Should not competition benefit consumers by offering competitive prices and choice?

Government ineffectiveness at the consumers’ expense

As the Opposition’s spokesman on citizen rights, as a consumer and, above all, as a parent I raised these two issues in Parliament. The Minister responsible for consumer affairs confirmed that the Competition Office is looking into both cases. The investigation concerning the Rabat petrol station case has been ongoing since January of last year and that into the school transport case since April. Neither has been concluded.

Regarding the school transport case, since April the Competition Office has held one meeting with the party under investigation and has written to nine schools. It has not met parents and has no idea of how many families will be affected. I asked if the Competition Office had taken steps to provisionally stop the increase the cost of school transport by as an interim measure. I was informed that, since there was no threat to competition, there was no reason for this. I asked whether the Consumer Affairs Office and the Competition Office have examined the options available to parents and was informed that the Competition Office was examining the fees charged by other operators. I asked if the Consumer Affairs Office is also investigating the case and the answer I received was that it does not have the competence to do so. 

I also asked for a report of another government-appointed entity on the work it has carried out during the past three years. I am referring to the Consumers’ Affairs Council, which is obliged to monitor the enforcement of laws affecting consumers. Neither of these two cases features in its report.

I highlighted these cases in Parliament, on behalf of parents, and asked for them to be concluded as soon as possible. I was informed that the Minister stays at arm’s length away from the Competition Office, which is autonomous, and will not interfere in its proceedings.

Good governance and consumer affairs

This is an area where good governance plays a major role. By ensuring autonomy, the Minister is addressing one aspect of good governance. What about accountability and transparency? What is the Minister doing to ensure that the consumer watchdog is providing a proper and effective service to consumers? For example, should the Consumer Affairs Office not publish its analysis and explain why it has concluded that the increase in the cost of school transport does not fall within its remit? Has it met parents, has it examined the nature of the complaints and practices taking place in the market?

Let us also not forget that one of the functions of the office is to research and conduct market studies. The law links the functions of this office with that of the Competition Office. How is the Minister ensuring that this is exploited in the best interests of consumers? The same applies to the Competition Office. For example, can the Competition Office explain to parents what options they now have, having declared that the school transport market is still competitive? Can these parents be informed of other service providers that are able to provide them with the same service at a cheaper price?

Consumers expect these regulators to be relevant when it really matters – and they also expect good governance.