GRTU meets the Prime Minister– Discussions on the 95 % Surcharge and the Price of Diesel

Yesterday morning GRTU's delegation, led by GRTU's President Paul Abela and Director General Vincent Farrugia, met with the Prime Minister Dr Lawrence Gonzi and the Minister of Finance the Economy and Investment Tonio Fenech to discuss the present economic situation in the light of the harsh increases in the price of diesel and the Surcharge on water and electricity.

GRTU presented the preoccupations of the majority of the members and of the commercial sectors represented by GRTU.

GRTU gave a report of what it understands to be the economic and social impact of these increases at a time where the average rate of inflation between the Retail Price Index (RPI) and the Harmonised Index of Consumer Price (HICP) is that of 4.2%. This is also at a time when the rate of economic growth (GDP Growth Rate) is not sufficiently covering this heavy increase in inflation.  

From the information GRTU has we believe that the Surcharge should have never been imposed at the rate of 95%, GRTU is annoyed that this rate is not based on what was said to the members of Malta Council for Economic and Social Development (MCESD) at the last meeting of the same MCESD. GRTU also maintains that the Government is not justified for not lowering the excise dues on each litre of diesel when Government is receiving a total of €90m on the excise tax and €170m on transport (Vide Government Financial Estimates 2008) in a single year. GRTU believes that the weight of the Surcharge will come to mean a minimum increase of 2% in the price of each product that the shops and supermarkets sell from freezers and fridges. This also will mean an increase on several other products and services. GRTU feels that when shop owners, transporters, distributors and other businesses work out the price of diesel and Surcharge these will cause a huge leap in inflation.    

The Prime Minister explained in detail what has forced Government to take these drastic measures and why in the present circumstances he can neither change the decision on the Surcharge nor diminish the excise tax on diesel.

Dr Gonzi accepted however to consider each case in all sectors that might be suffering extensively and cannot remedy because he either has no escalator clause bound to the price of diesel and Surcharge or cases subject to fixed prices. He however explained that it does not make sense for Malta to answer for that which is coming from abroad with means and measures or with schemes that will put Government in great financial difficulty further on.    

The Prime Minister also discussed GRTU's proposal where the capping system that only industry and hotels benefit from changes and becomes one bound with the rate of electricity that is captured in all products and services and a decreased rate is issued for supermarkets and merchandise shops to make up for the electricity that is wasted when the shops are closed and that also has to be compensate for by the consumer. He insisted that the capping system today cannot change because it would result in loss of employment from the sectors that today are benefiting from it.  

GRTU is going to hold section by section meetings for the sections it represents so that a detailed analysis is carried out on the impact of the increase in diesel prices and Surcharge and to discuss with Government the best solution for the problems presented.    

During the meeting GRTU's Vice President responsible for the property sector, Sandro Chetcuti, presented the views of GRTU on the reform in MEPA and presented the Prime Minister with the document prepared by GRTU for the reform of MEPA. GRTU also discussed the White Paper for the reform of Rent Laws and particularly how the White Paper and the reform are affecting the different sectors of commerce and business. In this regard GRTU is carrying out a research with the members to present Government with a detailed report on how the proposed reform will hit the commercial sector.