CHARLOT ZAHRA

Opposition Leader Alfred Sant accused the government of being soft with importers, which he said are mainly responsible for the high prices that are being experienced in Malta when compared to the rest of the European Union (EU).
“There is a problem in the way prices are being set in our country. Even the UHM has indicated that the problem lies at the importation stage,” Sant said during a press conference in which the Labour leader gave the party’s reaction to the Malta Council for Economic and Social Development (MCESD) meeting on Friday.
It was the Labour Party who had called for an urgent MCESD meeting to discuss the rise in the cost of living.
“During the MCESD meeting, we were told that government is doing everything possible was being done and that nothing else could be done to curb the cost of living. We do not agree with this.”
“Government should not hide behind the statement that the cost of living is coming from abroad or is perceived. There is a lot of explaining that government has to do about the cost of living,” Sant said.
He said the National Statistics Office (NSO)’s “Harmonised Index of Consumer Prices” (HICP) figures from October showed that the sectors in which there was most inflation were food and non-alcoholic beverages with an inflation rate of 6.6 per cent, clothing and footwear with 7.8 per cent and health with 2.5 per cent.
However, the latest Eurostat statistics for inflation in the European Union (EU) published last month, which are also calculated on the HICP model, show that in October, the average inflation rate for food stood at 3.8 per cent (2.8 per cent less than the Maltese inflation rate), that for clothing stood at 1.1 per cent (6.7 per cent less than the Maltese inflation rate, while that for health stood at 1.4 per cent (1.1 per cent less than the inflation rate in Malta).
Hence the government’s argument that the rise in the cost of living in Malta could be attributed solely to price rises from abroad was not correct, Sant said.
“If the increases in prices were only coming from abroad, then the rate of inflation abroad should be the same as that in Malta. However this is not the case,” he insisted.
The Labour leader said a Eurostat news release published last March on taxation in the EU between 1995 and 2005 showed that the percentage of total taxes as a percentage of the country’s GDP rose from 31.5 per cent in 2001 to 37.7 per cent in 2005.
Sant reiterated the party’s call for an effective price regulator that would watch over prices, investigate and take action whenever there are abuses in price increases.
A new Labour government would also review the fuel surcharge mechanism and reduce the surcharge by half as already promised, he said.
Sant also called for an audit of the structure used in compiling the Retail Price Index (RPI) and an analysis of the different elements comprising the basket of goods used for calculating the RPI.

czahra@mediatoday.com.mt