Charlot Zahra
The new power tariffs announced by the Government, which were announced by Infrastructure Minister Austin Gatt and Finance Minister Tonio Fenech on Wednesday, have led to an unprecedented show of unity by the social partners.
In a joint letter sent to Prime Minister Lawrence Gonzi on behalf of all the social partners on the Malta Council for Social and Economic Development (MCESD) on Friday, MCESD Chairman Sonny Portelli said in no uncertain terms that “there is no agreement at this stage about the measures described to us.
“It is particularly unacceptable that it is being proposed that these measures are being considered as having come into force as of 1 October as indicated in the media.
“On the measures themselves, the Council feels that it has been faced with a fait accompli,” the social partners said in their joint statement.
The letter to Gonzi adds on: “The measures that have been described to us look as being the result of an accountancy exercise devoid of any sensitivity towards the social and economic consequences if they are implemented.
“This is an unacceptable situation when one considers that the Council is purely a consultative one and has represented on it all the sectors of the country’s socio-economic sectors,” the social partners insisted in their letter to the PM.
Not even when the former Labour Government led by then Prime Minister Alfred Sant had announced a hike in the electricity and water tariffs way back in 1997, there had been such a clear show of unity by the social partners.
Four years ago, Gonzi’s effort to secure the Social Pact in 2004 under the threat of bypassing the MCESD and take the measures to reduce the country’s massive budget deficit at the time failed to do the trick, with the GWU disagreeing at the end.
On its part, the government in its reaction to the social partners’ joint letter said that the tariffs which have been presented in front of the MCESD were “proposals for consultation.”
“Goverment will not be taking any final decissions before hearing the opinion and the proposals of all interested parties,” it added. “Goverment would also like to make it clear that it has not take a decision as to which tariffs will be introduced from 1 October.”

No consultation
There was a flurry of reactions by the social partners and political parties on Friday, all bitterly complaining about the lack of effective consultation by the government about the introduction of the new utilities’ tariffs’ and calling for their revision.
The General Workers Union (GWU) warned that the new tariffs proposed by the government would be “a double blow to the workers, affecting their purchasing power and threatening jobs”.
Secretary-general Tony Zarb said that the Union was studying the government’s proposals in detail and would be giving a more in-depth reaction shortly.
Speaking during a press conference on Friday afternoon, Union Haddiema Maghqudin (UHM) Secretary-General Gejtu Vella complained that the proposed increase in the water and electricity tariffs would create pressure “both on families as well as on industry and tourism”.
Vella explained that this was the second time in the space of few months’ that the Government had not consulted the social partners effectively about the utilities tariffs.
“On 28 July 2008 the MCESD had felt the need of asking for a meeting with the Prime Minister since the UHM and the other social partners were feeling that the consultation process was not being effective about the raise of the fuel surcharge to 95%,” he recalled.
Figures taken from the Government’s report on the introduction of the utility tariffs and published by the UHM on Friday show that a family of two persons will have an average increase of €7.21 a week, a family of four persons will have an average increase of €8.96 a week, while a family of five persons will have an average increase of €10.24 a week.
Speaking during a joint press conference with the Chamber of Commerce and the MHRA on Friday afternoon, FOI Deputy President Helga Ellul said that all of the options proposed by Government were “based on a fundamentally flawed approach to policy formulation which, if pursued, is bound to have severe adverse effects on economic activity in Malta.”
“All of the proposals aim at restoring the financial position of the utility providers – Enemalta and Water Services Corporation – in an immediate manner without any concern for the socio-economic implications of such an action.”
“Clearly, we feel that there will be an impact on employment, as these proposed tariffs will threaten thousands of jobs. There will be an increase in inflation rates and slow down of the growth of the economy,” Ellul said.
The other employers’ organisation, the Malta Employers’ Association (MEA), called on the government to respect of the spirit of social dialogue “if the government expects the social partners to participate in finding solutions to the country’s problems.”
MEA Director-General Joseph Farrugia expressed dismay at “the poor consultation on Government’s intentions to revise the water and electricity charges to households and industry.”
The MEA lamented that the social partners “have been completely left in the dark about the developments, which, if not amended, will have serious repercussions on companies, particularly manufacturing and hotels and may result in a significant loss of jobs.”
On his part, Opposition leader Joseph Muscat in his initial reaction said that it was “unacceptable that the Government announced that it was increasing the water and electricity tariffs without conducting a study-on the socio-economic impact of this increase.
A Labour delegation will be meeting Finance Minister Tonio Fenech and Infrastructure Minister Austin Gatt to discuss the proposed utilities’ tariffs tomorrow.

czahra@mediatoday.com.mt