Electricity bill surcharge aims to raise about Lm9 million

It is likely that the surcharge to be announced in Wednesday's budget speech on the water and electricity bills will be only on the electricity component of the bills, and that it would be in the region of 17 per cent.

Sources said that at the lengthy meeting of the Malta Council for Economic and Social Development that took place on Saturday, the government presented and discussed several options of how the surcharge could be spread out, but the ultimate aim of all the permutations was that around Lm9 million would be collected to offset the hike in oil prices.

The sources said the social partners preferred to have a 19 per cent surcharge on electricity bills rather than a 10 per cent surcharge which would also be applied to water and fuels, because this would have a ripple effect and push up prices across the board.

The government has made it clear that the surcharge will be reduced or removed altogether once oil prices returned to normal levels.

It is also most probable that the surcharge for industry would be capped at a maximum of Lm5,000 annually.

Other likely budgetary measures are an increase in the excise duty on cigarettes and an increase in the price of kerosene. Both these measures might not be introduced immediately however, especially the latter.

The price of kerosene will most probably remain unaltered for winter, because there are consumers who still use it for heating.

But in summer, the price of kerosene is likely to go up to make it equivalent to that of diesel and curb its adulteration abuse. It is widely known that the consumption of kerosene in summer is relatively bigger than in winter, which clearly shows that it is abused because of its cheaper price.

Another measure which is expected to be announced is the spread of eco-taxes to other products.

The sources said the government was still hopeful the social partners might agree to a form of social pact so that the government would be able to adopt some measures which would enhance the country's competitiveness.

Employers' organisations have been urging the government to take the decisions that need to be taken, while all unions within the MCESD have clearly indicated they are not prepared to accept a reduction in leave entitlement and overtime as proposed by the MCESD chairman in his report of today week.

The Malta Union of Teachers and the Malta Union of Bank Employees, who are both "represented" in the MCESD through the CMTU, last week said they were not in favour of the measures proposed and that they were only consulted about them 24 hours before an MCESD meeting took place, without them being present.

The GWU said it was unfair for the government to single it out as the main union opposing the measures and the Union Haddiema Maghqudin too declared it was not prepared to accept cuts in leave and overtime payments.

"Though nothing is impossible, given the declared positions of those involved, it is highly unlikely that an agreement on a social pact will be reached between today and tomorrow. No meeting is scheduled to take place either," the sources said yesterday.