Eco-tax echoes in Parliament

An opposition motion to annul a legal notice extending the eco-tax was defeated in the House of Representatives on Wednesday.

The motion was moved by Opposition finance spokesman Charles Mangion.

He said the imposition of the eco-tax had failed on three counts - the economic, the environmental and the social.

Malta was in an economic slowdown and imposing a new tax made matters worse, more so as Malta already had one of the heaviest tax burdens in the EU. The tax would raise costs and inflation and reduce the people's purchasing power. Had the government carried out a proper economic impact assessment before taking this measure? He did not think so. Even the way the legal notice was worded was shameful and it had to be amended within two weeks.

Workers' leave had been reduced in the interests of competitiveness. What impact would the eco-tax have on competitiveness?

Would the environment benefit directly from revenue from this tax? Would the people get anything back from properly disposing of articles on which the eco-tax was charged? What plans did the government have for waste separation?

Councils which had so far separated waste had only seen waste being mixed once more upon collection, Dr Mangion said.

The eco-tax also had a major negative impact on the people, reducing people's disposable income.

Joe Cassar (PN) said the opposition's motion did not reflect any serious study and gave no alternatives.

The introduction of eco-contributions, all over the world, had brought about greater protection for the environment and better health for the people. That awareness of the environment was growing even in Malta was clearly evident. The people were now careful what bags to use, for example. They also now knew what dioxin was. What medical studies had the opposition made before seeking to strike off the eco-tax?

Why had the opposition said that the eco-contribution would have a major impact on industry when this tax would not apply to manufacturing?

Would the opposition back up its claim that this measure would cause unemployment? In EU countries where eco-taxation was introduced, new industries, and as many as 500,000 new jobs, had been created.

There was no doubting that the introduction of eco-contributions was bringing about a change of mentality with regard to the environment. A survey for The Sunday Times showed that 99 per cent were now more careful about the products they used and 90 per cent felt the eco-contribution would change the people's mentality on the disposal of waste. Ninety-nine per cent felt there should be stiffer penalties against those who polluted.

Turning to waste separation at source, Dr Cassar said a key element for the success of such a scheme was to have an efficient system of bring-in sites. The government had allocated Lm1,500 annually for each local council to set up and maintain such sites. Sixteen of 21 local councils which did not yet have bring-in sites were Labour controlled. So much for Labour's environmental commitment. Of course, the Labour leader did not include this factor in his calculations of the local councils' success.

This motion, Dr Cassar said, only served to further undermine the opposition's credibility.

Chris Agius (MLP) said the opposition agreed with the polluter pays principle, but this should be applied in equal measure to everyone, including state corporations. The way the eco-tax extension had been introduced was confused, and private sector organisations such as the Chamber of Commerce had rightly complained of lack of consultation and inadequate time for preparation.

Indeed, the same pattern was followed when the first eco-taxes were introduced last year, leading to complaints by, among others, the FOI. What the government was doing was to act first, and ask questions later. At least there had been some changes after the private sector organisations complained. The fact remained, however, that a new burden had been imposed on the people and many business operators still did not know how they should collect and pay this tax. Information meetings were still being held at Malta Enterprise. So much for preparation.

It was amply clear that the government had imposed the eco-tax to raise revenue. But the business sector, manufacturing and retail, simply could not afford more taxation. The FOI had been right to complain that Malta was over-taxed and this was diminishing Malta's competitiveness. What was needed was a reduction of government-induced costs, not the contrary.

This measure also eroded the people's purchasing power. If the government wanted to protect the environment, it should have promoted product-return schemes.

It was good that the government had amended the legal notice it issued on December 31, somewhat easing the impact on industry. Had that not happened, a major plastic bag-making firm, Traplus, would have had to fold, Playmobil would have seen costs rise by Lm200,000 and Toly Products by Lm250,000. Still, despite the amendments to the legal notice, there was no doubt that the retail price index would rise and competitiveness would go down.

Jeffrey Pullicino Orlando (PN) said the country's focus in the past was on infrastructural development, but the environment was now one of the three pillars of the current government's policies.

The opposition was demanded an impact assessment of the introduction of the eco-contribution. What would the economic and environmental impact have been had Malta not joined the EU, as the MLP wished, and Malta would therefore not have been eligible for the millions of EU funds? Much of those funds were being used on environmental projects. What would Labour have done, multiply the eco-contribution by four or simply ignore the environment?

It was not true, Dr Pullicino Orlando said, that waste from bring-in sites was being mixed after collection, and repetition of such claims by the opposition only served to put off the people from waste separation at source.

The opposition was calling for a "serious" environment plan. Was the government doing wrong when it sought to rehabilitate Maghtab and the other dumps, when it set up more bring-in sites and rehabilitated quarries after filling them with inert waste? Was it wrong to set up five civic amenity sites for bulky refuse? Was it wrong to set up three sewage treatment plants funded to a great extent by the EU? What would the economic and social impact have been had those measures not been taken?

And contrary to what Mr Agius had claimed, the eco-contribution on plastic would not apply to industry or agriculture.

Dr Pullicino Orlando said he could not see how the opposition could oppose government efforts to discourage the use of plastic bags.

The eco-contribution was about changing consumer trends, and it was already working, as far fewer people were using plastic bags, for example.

Revenue from the eco-tax would help the government pay for modern waste disposal and management systems. Indeed, this revenue would be far from enough to cover those costs.

The opposition was being unjust and unfair He had been critical of the government when it did not do enough for the environment. But the opposition was now being wrong not to appreciate the good work that was being done, including the modernisation of the Sant'Antnin waste recycling plant.

The government was showing it had a very serious environment plan and had made the environment one of the three major pillars of its work.

Silvio Parnis (MLP) said the Nationalist government had only introduced the eco-tax to raise revenue. Indeed, the government included several examples of such anti-social measures in the budget, such as the raising of bus fares. Yet raising those fares would mean fewer people would use the buses and they would use more cars, to the detriment of the environment. The MLP's environment credentials were far better than the PN's.

Other speakers were reported yesterday.