Pressure mounts for eco-tax postponement

The current hot issue revolving around the introduction of the eco tax was high on the agenda of both the government and the social partners yesterday.

While Prime Minister Lawrence Gonzi was meeting with Chamber of Small and Medium Enterprises (GRTU) director-general Vince Farrugia, representatives of the social partners were discussing the issue in a meeting at the Radisson in St Julian's.

A spokesman for the Prime Minister confirmed that meetings were taking place between Dr Gonzi and the social partners as part of the consultation process promised by the Prime Minister.

Questioned on whether Dr Gonzi was considering postponing the implementation date of the eco-tax, the spokesman said this would be considered if the extension was a "decent" one.

He said the extension would be one involving a "small number of weeks" meaning that the eco-tax would come into force in the second or third week of August.

However, Federation of Industry president Anton Borg said if the extension was one of a "few days" it might just as well remain as it was.

On Friday Mr Borg met with the Prime Minister, and the eco-tax was one of the issues on the agenda. He said Dr Gonzi had promised them an answer about the way forward, and the social partners were awaiting this.

More meetings about the issue are expected to be held this week. Originally, the eco-tax had to come into effect on August 1, but the social partners are requesting a postponement while more consultation takes place.

The request for an extension was included in the discussion which Mr Farrugia had with the Prime Minister. The GRTU director-general said the chamber was suggesting that the eco-tax would come into force in January so that business people would have time to deplete their stocks while consumers would have more time to buy products at pre-eco-tax prices.

Mr Farrugia said traders were not prepared to start collecting the eco-tax as from August 1. He explained that the bill states that business people have also to pay the government on their existing stock, but said traders were not prepared to send a cheque to the government on this by October.

"This is impounding on businesses' cash-flow," he said, adding that many traders were prepared to challenge it.

Mr Farrugia said meetings this week would determine whether there were grounds for an agreement to be reached about the issue.

Another important issue discussed with the premier was the lack of consultation that is irking the social partners. Mr Farrugia said the government could not "throw away" the process of consultation that had been established during the EU accession process.

"We cannot throw away what we had striven to build in the name of public finances," he said.

Mr Farrugia said his message to the Prime Minister was to refrain from turning his back to this "new democracy", and reassure the social partners that this was not going to happen.

He criticised the way the government had decided upon the eco-tax without the type of consultation the social partners had got used to.

"The Prime Minister said he was prepared to go back to the Malta Chamber for Economic and Social Development and fine-tune the eco-tax bill," he said, adding that Dr Gonzi seemed "open to finding a solution".

He said it was positive that dialogue was ongoing, and an attempt to find a solution would take place over the next few days. He added that the tax posed a "big burden" and it was imperative to discuss it.

He explained that it would have an effect on the level of finances of businesses, and affect the consumer through the new prices and the cost of living, and would eventually go back to haunt the employers through requests for pay increases.

At the same time that the meeting was being held at Castille, the claimed lack of consultation was on the agenda of a high-powered meeting attended by the Chamber of Commerce, the Federation of Industry, the Malta Hotels and Restaurants Association, the Malta Employers Association, the General Workers Union, the Union Haddiema Maghqudin and the Confederation of Malta Trade Unions.

The social partners condemned the lack of consultation by the government before taking decisions affecting both businesses and workers.

In a collective statement, the social partners expressed their disappointment that the Malta Council for Economic and Social Development was only serving as a smokescreen instead of being a serious and structured forum where consultation and constructive discussion in the national interest took place.

They said the eco-tax introduction was a prime example of a law which was being pushed forward by the government without consultation with the social partners.

"This can no longer be tolerated," they said, and insisted on an urgent MCESD meeting to establish clear and concrete procedures so that the consultation principle would not remain a frivolous concept, but a system through which the country could really move forward.

"The MCESD work can no longer be undermined, but should be given the dignity it deserves," they said. The organisations stressed that because of the importance of the issue, the Prime Minister should be present for the meeting".

Mr Farrugia said the GRTU endorsed the statement by the social partners.