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Kurt Sansone
The meeting between Minister Austin Gatt and the social partners scheduled for tomorrow afternoon is supposed to be a listening exercise for the minister to digest proposals presented to him by unions and constituted bodies on how best to address Enemalta’s rising fuel bill.
But what the minister wants to hear is a long way from the message the social partners are expected to deliver.
None of the social partners who spoke to MaltaToday have solutions in hand and in tomorrow’s meeting they will be demanding more explanations rather than discussing Gatt’s controversial proposals.
It’s going to take more than a double-page advert like those taken out by the Investments Ministry in all newspapers yesterday for Gatt to justify the hefty utility and fuel price rises he presented to the social partners last Tuesday.
“If government intends going ahead with the proposals as presented to us last Tuesday, it will be inviting trouble,” an incensed Vince Farrugia, the director-general of the Malta Chamber for SMEs (GRTU) tells MaltaToday.
“Members represented by the GRTU who ply their trade in the transport industry are fed up with the situation and are ready to block the roads if government implements Gatt’s suggestions,” Farrugia says.
The GRTU is concerned because any exorbitant increase in either the surcharge or the price of fuel for general use would further choke economic operators and put a deep squeeze on household budgets.
“I will be asking for a clear explanation on how the fuel procurement committee set up last year has been purchasing Enemalta’s oil requirements. From the data at hand it is clear that they chose the risky option of buying oil in the open market rather than adopting a more prudent approach and hedging prices for a period of months,” Farrugia says.
And the explanation given by Gatt in yesterday’s adverts does little to give the social partners a deeper insight into how Enemalta was run over the last year since the utility consumption surcharge was introduced. Under the heading ‘A National Solution to a Global Crisis’, Gatt’s supposedly ‘national’ approach included a derogatory dig at Labour leader Alfred Sant and the ‘tens of experienced oil buyers’ who will ‘sprout up’ in the coming days.
The proposals outlined by Austin Gatt on Tuesday are a bad omen for both businesses and households. And yet the situation this year is uncannily similar to what happened last year. No lessons seem to have been learnt.
“We were fools last year and we have remained fools this year,” Farrugia says, pointing out that nobody knows how and whether there was an effort to trim Enemalta’s expenditure and render the corporation more efficient. He also laments that the social partners were excluded from the fuel procurement committee. “Now, when government is faced with a bomb it expects the social partners to agree to its proposals. It doesn’t make sense to consult the social partners when the going gets tough and exclude them completely in the interim.”
And if the anger of the GRTU’s members is anything to go by, government is in for some serious political rocking. “The level of anger among my members is equivalent to the anger they had when VAT was introduced in 1995,” Farrugia says. “If it were up to them, my members are already down in the streets protesting.”
Government’s proposals are perplexing. Only two months ago the Prime Minister launched a pre-budget discussion document in which it was stated that 2006 will see the conclusion of the divestment “of the supply chain leading from the importation of fuel for the general market to its distribution to petrol stations”. And yet, today, one of Austin Gatt’s proposals to recoup additional fuel costs for electricity generation is a total or part increase in the price of fuel for the general market.
The pre-budget document dedicates three quarters of a page to the ‘impact of oil prices on the economy’ but nowhere in the 87-page booklet was there so much as a hint at the hefty price increases being proposed by Austin Gatt.
It is no wonder the social partners were flabbergasted on Tuesday when the minister presented them with a very bleak picture. One year after government introduced a controversial 17 per cent surcharge on water and electricity consumption little has changed.
General Workers’ Union chief Tony Zarb insists: “it is as if somebody wanted to torpedo the pre-budget document. When we were all discussing the pre-budget document and preparing our proposals to it, all of a sudden we were faced with this fuel problem. Is it possible that the minister could not foresee these problems months ago? Why has he suddenly woken up to the reality on the eve of the budget?” Zarb asks.
He is concerned that if government goes ahead with its proposals it would deliver a mortal blow to pensioners and employees.
“The GWU will not be in a position to present its solutions on the fuel crisis tomorrow unless it knows what budget measures government will be introducing. We will be insisting with government that it makes public all its budget measures. One of the options Austin Gatt presented us with was a 70 per cent absorption by the consumer and a further 30 per cent by government. But soon after, Parliamentary Secretary Tonio Fenech told us that any such option would mean government would have to take the necessary budget measures to recoup its 30 per cent share. All solutions suggest that the consumer will eventually be shouldering the burden,” Zarb says.
And in a press release issued on Friday the Chamber of Commerce also called on government to tackle the fuel problem within the ambit of next year’s budget rather than on its own.
Federation of Industry director-general Wilfred Kenely is also flabbergasted by the proposals put forward by Austin Gatt.
“We have no blueprint for tomorrow’s meeting. The FOI does not have a concrete solution. We believe the situation has to be evaluated in its entirety. We obviously prefer a solution that will least impinge on competitiveness but the proposals presented to us by Austin Gatt will simply put all the burden on the domestic user and industry and this will stagnate the economy.
“The FOI will be insisting on long-term solutions. We have to assess whether the technology used today is adequate, we have to raise awareness among consumers on how to conserve energy, we have to know exactly how Enemalta is buying its oil, we have to start thinking seriously about alternative energy. We have to be responsible but we also need some creative thinking. Simply passing on the fuel bill to the consumer is a very short term solution and one that will see us meet again next year to discuss more price hikes,” Kenely says.
Enemalta is nowhere near being run efficiently. It remains a bloated organisation with a hefty wage bill. The workings of the fuel procurement committee remain a mystery with no indication whether they adopted a prudent purchasing policy. There is no sight of a nationwide energy-saving information campaign and to top it all alternative energy remains a taboo suggestion for the minister and Enemalta.
Yet, one year on government is once again caught in a panic attack with the only option being that of dipping its finger deeper into the pockets of businesses and households.
ksansone@mediatoday.com.mt
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