Fabian Demicoli

No postponement of eco-contribution


As
the parliamentary discussion on the bill introducing the eco-contribution (also
known by those opposed to it as eco-tax) enters its final two days, government
and its partners at the Malta Council for Economic and Social Development find
themselves at logger-heads.

There can be no postponement of the
introduction of this bill, minister George Pullicino told The Malta Independent
on Sunday in a wide-ranging interview yesterday.

He aimed to clear up the
air after a comment made by the Prime Minister at the end of a tour of roads
outside Mdina in searing sun on Friday. Questioned by Super One’s Julia
Farrugia, Dr Gonzi said it would not be the end of the world if the new tax
comes into effect on 15 August instead of 1 August, but not if the
implementation of the measure is delayed until the new year.

This led to
the secretary general of the General Workers Union Tony Zarb calling the Prime
Minister’s attitude “disgusting”.

In a joint statement issued yesterday,
the representatives of the constituted bodies and the trade unions, in a rare
show of unity, condemned the way government has been taking its decisions in
this regard without any consultation with the social partners.

The
representatives of the Chamber of Commerce, the Federation of Industries, MHRA,
Malta Employers Association, GWU, UHM, and CMTU all expressed sadness that MCESD
is serving as a camouflage instead of being a serious and structured forum where
consultations and constructive discussions can be held in the national
interest.

The organisations thus asked for an urgent MCESD meeting, with
the Prime Minister present, “to establish clear and concrete procedures to
ensure that consultation does not become a frivolous word but a
reality.”

Mr Pullicino’s plan is that the bill, which was passed by the
House at the second reading on Friday night, will go to a full discussion at
committee stage tomorrow, both morning and evening and on Tuesday, and should be
voted in by Tuesday night.

As regards the implementation of the bill,
government was never tied to 1 August as the date of its inception, as there are
still some administrative and technical issues to solve. But the law has to be
passed and waste management cannot be delayed, he said.

There is some
flexibility from the government side, he added, but this is not open-ended. A
number of meetings with constituted bodies are also being held to iron out
needed clarifications.

Mr Pullicino, both in Parliament and in the
interview, hotly denied that no consultations have been taking place.

The process leading to this bill, he said, began in June last year and
it had taken so much time because of long discussions with the bottlers who, in
the end, could not come to an agreement.

Speaking in the House on Monday,
Mr Pullicino said that discussions had also been held with the Chamber of
Commerce and GRTU.

If the discussions had been prolonged, and the
introduction of the eco-contribution had been postponed, it would have slid to
next year, when it had already been announced in last year’s Budget Speech as a
measure to be put in place this year.

With important discussions being on
the cards with MCESD in the coming months, this also seems to be an important
signal sent by government to MCESD: that government accepts the need for
discussion but will not allow discussions to become of the round robin variety,
with no conclusion in sight. Government figures have already spoken about how,
with regard to the pension debate, people in government feel they have been led
up the garden path by the social partners and this delay obtained nothing except
further discussions and further delays.

Speaking in Parliament on Friday,
Mr Pullicino complained that people like Charles Buhagiar criticised government
for not doing anything except set up committees to do something, but then when
government was about to do something the same people told government to set up
committees!

Danish models

The present bill, Mr Pullicino
said, is based on one of the EU’s best eco-friendly legislations, that of
Denmark. Denmark, along with Sweden and, to a lesser extent, Germany, are the
leaders in eco-friendly countries in Europe.

This is only the beginning,
the minister said. To put in the whole Danish legislation would have created too
much of a shock to the country and to industry.

Denmark has eco-taxes,
clearly labelled as such, separated as due to, for instance, waste, energy
conservation, etc. Malta has chosen to introduce eco-contribution on waste
management only at first. Later on the rest of the sector will be
tackled.

Furthermore, the Danish model has eco-taxes on 600 products
including water and electricity pipes, adhesive tapes, packaging waste,
etc

Mr Pullicino told Parliament that Denmark has three levels of taxes
as regards bottles: 4c for small bottles, 9c for medium and 13c for large
bottles. The eco-contribution for batteries is 70c in Malta and Lm1.40 in
Denmark.

Some members in the House said that people who earn more than
the Maltese are to be expected to pay more taxes, but Mr Pullicino argued that
people in Bulgaria pay 32c per ton of waste and that even people in Albania, who
are far poorer than the Maltese, pay taxes on waste.

The three
options

In his speeches on Monday and on Friday, Mr Pullicino discussed
the three options discussed by government and outlined their pros and
cons.

1. Rates. This is the tax mostly used in Europe and it is also, in
a way, the sort of tax chosen by the Sant administration in 1997. It taxes every
door or else it taxes each house by its output of waste.

Government felt
this would not work in Malta since Malta, of all countries, is the only country
to have waste collection on a daily basis. It would be far too cumbersome to
calculate the weight of the output per door on a daily basis.

As to the
system chosen by the Sant administration, this was going to be a flat rate per
door, regardless of the building or the area. Elsewhere in Europe, rates differ
according to the area, whereas here in Malta the owner of a house in Ghaxaq
would be paying just the same as the owner of a villa at Madliena. Government
felt this was not a fair way of doing things.

2. The second option
considered was a tax on the sale of objects. This could have given government a
greater revenue and would perhaps have been easier and tighter to administer.
But government felt it did not want to further burden retailers.

3. That
left the third option: a tax or contribution imposed when the product enters the
country, not when it is sold. Government also chose to introduce it on a limited
range of products, so as to learn, itself, the administration of this
measure.

Changes in the proposal

Following the various
discussions that were, and still are being held, government has further amended
the draft so as to make it even simpler to administer and to create less
opposition to it.

The first misconception to be dealt with was that
government was about to create a new authority to administer this measure. One
opposition speaker after another fulminated against this, until the government
side informed them no new authority was being set up and the existing structures
would be used.

The second change regarded the part of the draft which
said people could be sent to jail if they were found to be in breach of the law.
This has now been changed on the insistence of the parliamentary secretariat for
the self-employed.

A possible third change may be announced in the coming
days. Many Opposition speakers complained that the bill and the eco-contribution
make no difference, for instance, between a fridge that is eco-friendly and one
that is not.

At first Mr Pullicino defended this by saying that the
system would be worked on the basis of the customs number which does not make
any such differentiation, and also that in the end, the waste generated by an
eco-friendly fridge is just as much as that generated by an eco-unfriendly
one.

But he told this paper yesterday that maybe there will be a
different eco-contribution to be paid in respect of small fridges and big
fridges/freezers.

The way the new tax has been brought in makes it easy
for producers to come up with their alternative waste collection system, which
will then make them exempt from the eco-contribution.

Consider, for
instance, the importers of bottles.

There is already a measure of
incentivising of glass against plastic in that one cent per glass bottle has to
be paid on entry but it can then be used again and again, while a plastic bottle
also costs one cent but cannot be reused.

And if the bottle importers
bring into existence a system whereby their bottles are recovered from the waste
stream, they will be exempt from the tax.

As for other products such as
tyres and television sets, it costs Wasteserve far more to cope with their
waste, but the price one pays has been kept low for social
reasons.

Open for discussion

It would seem, from
discussions held with various government persons over the past days, that
government acknowledges not enough time has been spent in discussion of this
measure and it would have liked to have had more discussion, but the coming
summer holidays, and the need to get this bill on the statute books before the
summer recess, have curtailed such discussions.

Nevertheless, Mr
Pullicino told this paper, government is still very ready to hold discussions
with all parties regarding the whole ecological tax reform. What is being
introduced is not the fully-blown system but an introductory measure.

In
his speech in Parliament Evarist Bartolo spoke of the Czech Republic's eco-tax
system. Apart from considering that the Czech Republic is not normally known for
its ecological supremacy, Mr Pullicino added that the Czechs have a system
whereby they pay from 15 to 20 Euros per ton of waste, and this is paid on a
personal basis, whereas in Malta it is the state which pays and in any case the
state pays less than the Czech citizens pay for the equal amount of
waste.

Government does have ideas about how the eco-taxes should be
structured in Malta and will be consulting the country before it goes about the
next step. In the meantime, the administrative capacity to administer such taxes
must be built and the country made to realise that it must pay for its
waste.

Mr Pullicino told Parliament on Friday that that very same day
government had received, in Maltese, the European Commission's positive verdict
on this new measure. Had this bill not been in line with European legislation,
he said – thus giving the lie to Vince Farrugia who claimed otherwise – the
Commission would have demanded further talks and
changes.

Tackling the environment crisis

What is uppermost
in Mr Pullicino's mind is removing as quickly as possible all danger from
Maghtab.

Maghtab is still ominously active: all the waste dumped there
over previous years is still boiling and creating chemical chain reactions
beneath the cap.

There are poisons in there, which any accident, such as
the shearing of the mountain, or the collapse of a part of it, could release
into the surrounding air.

Over the next months no less than 600 wells
will be dug on Maghtab and the resulting gas outflows incinerated.

As Mr
Pullicino showed journalists on Friday, every day around 500 truckloads of
construction waste are being used to fill up disused quarries.

The
Marsascala Sant’ Antnin waste facility will be made bigger and better with newer
technology.

The existing 50 bring-in sites around the country will be
increased to 300 by next year, along with bigger regional facilities as
well.

Waste separation at domestic level will be introduced in the near
future.

Yet Malta will never have 80 per cent of its waste separated. Not
even Germany can manage more than 40 per cent.

The collective expenditure
on waste will top e32 million over the next three years, with the EU forking out
e24 million.

 

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