The Malta Independent 21 October 2026, Wednesday
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Nobody weighs the luggage

Emmanuel J. Galea Wednesday, 21 October 2026, 07:47 Last update: about 4 hours ago

Lawrence Gonzi lost the 2013 election by 36,000 votes, and utility bills did much of the damage. His government raised electricity tariffs and surcharges in 2008, when oil prices soared. Households that struggled with those bills carried their anger to the ballot box five years on. Labour cut household electricity rates by a quarter in 2014 and has frozen them since. Every finance minister since then has read the same lesson: touch energy prices and you lose.

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Clyde Caruana recited that lesson again at his pre-budget launch last week. "I will not be the person who kills this country's economy," he told the social partners. Subsidies on energy and food cost the Treasury €188.1 million in 2025. This year the bill reaches €391.7 million, and the minister expects about €400 million in 2027. War in the Middle East and the stalemate over the Strait of Hormuz explain the jump. Over five years, by his own count, the government has spent €1.35 billion holding prices still. His deficit forecast now sits about €312 million above the target he set in April.

The minister deserves a fair hearing because his arithmetic is not trivial. A family that spends €20 a week on diesel pays €33.06 once the subsidy goes. An electricity bill of €50 a month climbs to €85 on the same day. He forecasts a €630 million loss in output and the loss of 3,000 jobs by 2028. No columnist who remembers 2008 wants pensioners choosing between the cooker and the fan. Protection for families of modest means is right, and this column does not ask him to end it.

My quarrel lies with the blank cheque that accompanies the protection. A subsidy that covers every unit, for every user, teaches a country that waste costs nothing. Picture a household where one member spends without limit and the breadwinner settles every account. No parent runs a family that way, and no family stays solvent for long. Yet Malta runs its energy policy on that principle and casts the taxpayer as the breadwinner. Is this the habit we wish to leave for the next generation?

Airlines solved this problem decades ago, and nobody calls them cruel. Your ticket carries a luggage allowance, and the airline weighs your bag at the desk. Stay within the limit and you shall pay nothing more for the journey. Exceed it and you pay for every extra kilo out of your own pocket. Passengers accept the rule because it is fair: the frugal traveller does not fund the heavy packer. Energy and fuel deserve the same logic, and the same calm firmness in applying it.

Malta's electricity tariff already contains half of this design. Residential rates rise in bands, from 10.47 cents a unit to 60.76 cents for the heaviest users. An eco-reduction rewards households that use fewer than 1,750 units per person each year. But the government froze every band in 2014, including the top ones. The subsidy therefore reaches the villa with six air conditioners as well as the pensioner's flat. Employers at the Malta Chamber want households that exceed their eco-reduction entitlement to face the actual cost. Sandra Gauci from ADPD requests the same: safeguard basic consumption, not every type of consumption. The International Monetary Fund has warned for years that blanket subsidies blunt the incentive to save. Alexander Demarco, governor of the Central Bank, insists that the subsidies must not become permanent.

Fuel, by contrast, carries no allowance of any kind. Every litre receives the same subsidy, whoever buys it and for whatever journey. A household with two cars collects double; a household with none collects nothing and pays the taxes. The national stock of vehicles stood at 463,734 at the end of June, up 3,086 in three months. In 2023, Gozo and Comino held the national record, with 1,126 vehicles for every 1,000 residents. Across our villages, people drive to a church and a grocery that stand five minutes away on foot. Does the taxpayer owe anybody a subsidised litre for that trip? Two-car families can coordinate travel, merge errands, and leave one vehicle stationed at home. Today's pump price offers no incentive for them to make an effort.

Then comes the workplace, where nobody in the room pays the bill. Does it make sense to leave an office's air conditioning running overnight for a cool desk at nine? Who covers the cost of those 12 empty hours? Even though the recommended setting by installers is 24 to 26 degrees, many set the unit to 19. Malta has no official norm for indoor cooling, and it needs one. Spain's 2022 decree barred public buildings, shops and offices from cooling below 27 degrees. Italy set the same limit for its public buildings that year. Malta can adopt 26 degrees as the national norm and write it into law, starting with government offices. The grid gains too: July set a demand record of 741 megawatts, and August left much of Gozo in darkness.

Rules alone do not change a culture; teaching does that work. The government needs a standing campaign on television, on social media, and in every classroom. Children who learn to switch off a light at seven lecture their parents by eight. Waste is a habit, and habits yield to patient, repeated instruction over two decrees. Electricity and water are precious on an island that imports its fuel and manufactures its drinking water. A campaign costs a sliver of €400 million, and its effect outlasts any subsidy.

Budget 2027 arrives on 26 October, and the minister has room for a third option. Keep the price freeze on a basic allowance of electricity for each person in each home. Charge the true cost on every unit above it, as the airline charges for the extra kilo. Give each driver a yearly quota of subsidised fuel and sell the rest at the market price. Direct the savings to solar panels, batteries, and the second interconnector that the grid awaits. That design shields the pensioner, spares the careful family and sends the bill to the waster.

Gonzi's error was to pass the whole bill to families who had no means to pay it. The error Caruana makes is the opposite - he passes no bill to anyone. Between punishment and indulgence lies the ordinary discipline that every sensible household practises. Weigh the luggage, Minister; the passengers who pack with care have waited long enough.

 


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