Editorial | Wednesday, 26 November 2008

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Paying to throw water away

This week’s announcement that government is considering a sewage tax, possibly to be introduced next year, speaks volumes about the modus operandi of the current administration.
Infrastructure Minister Austin Gatt raised several eyebrows in parliament last week when he “hinted” at the imminent introduction of the selfsame sewage tax that Alfred Sant had tried unsuccessfully to levy in his notorious 1998 budget.
“I am making this clear now, so that nobody comes complaining that they didn’t know about this tax,” Gatt said... keeping up his reputation for plain talking, but only after elections are safely out of the way.
In fact, one can only wonder why this kind of “no nonsense” language was nowhere to be heard before March 8. Instead we heard quite the opposite: rather than introducing new taxes, we were promised a downward revision of income tax bands, among other pledges which have so far failed to materialise.
Be that as it may, it seems that the Nationalist administration – and Austin Gatt in particular – is either entirely oblivious to irony, or has grown so accustomed to wielding absolute power that it no longer cares how it perceived by the man in the street. After all, we are talking about the selfsame measure once described as “shameful” and “heartless” by none other than Eddie Fenech Adami, when the Nationalist party was in Opposition.
It may be worth recalling that when, in 1998, Dom Mintoff had stood up in parliament and accused the Labour Party of losing its “social conscience”, the main cause of his ire was an unexpected hike in water and electricity bills, together with the imposition of a sewage tax, among other unpopular measures.
Needless to add, the Nationalist Opposition took full advantage of the resulting outrage – belying Sant’s claims that the sewage tax was one of the conditions of a loan, taken out by Fenech Adami’s administration from the European Investment Bank some years earlier for the purposes of building a waste-water treatment plant. These arguments were quickly drowned out in the ensuing chaos, when the Prime Minister was forced to call early elections after losing a vote of confidence in parliament. The rest, as they say, is history.
Just over a decade later, it is now the Nationalist party which has raised the utility tariffs by the same margins as the infamous 1998 budget. And if you’ll excuse the pun, it seems a sewage tax is now also in the pipeline. But apart from the sheer hypocrisy of this latest surprise measure, the way the announcement was made is not exactly conducive to a healthy, serious debate.
If government intends to introduce a new tax along the lines suggested by Gatt, then the responsible way to proceed would be to call the social partners in for a discussion. After all, the implications of this fiscal development for households and businesses are likely to be many and various. But judging by the tone in which the announcement was made, it looks like we are about to be presented with yet another fait accompli.
Besides, the justification for this new measure also throws into sharp focus the apparent lack of any serious government policy on water usage to begin with. Unlike Sant’s measure in 1997, today’s sewage tax will not be the result of a EIB loan, but rather an EU directive which establishes that European governments must embark on a “full cost-recovery” for the treatment of wastewater. Ostensibly, the money raised by this tax will pay for the expensive process of treating wastewater before it can be re-utilised.
But as Dr Gatt has already made painstakingly clear, the government has no intention to make any use of this treated water. Instead, it will be pumped unceremoniously back into the sea.
Effectively, therefore, taxpayers will be expected to cough up money – exactly how much remains to be seen – without receiving any tangible benefit in return. At this point, the public will be justified in questioning the wisdom behind government’s entire water policy on water usage.
In justifying government’s decision not to make any use of treated sewage water, Dr Gatt has stated that the process involved – i.e., a second treatment stage known as “polishing” – would be too expensive. This is at best a flimsy excuse, when one considers that thanks to the above-mentioned EU directive, the government can now reclaim this expense from the taxpayer. But experts have also hinted that the reason may be another altogether.
Looking at our wastewater treatment infrastructure, it seems that the existing treatment plants were purposely built at the very extremities of the Maltese islands. This in turn has created an unforeseen infrastructural problem: in order to make use of the resulting water, government would need to build an entirely new network of pipes, to connect the far-flung plants to the existing water supply.
From this perspective, it seems that the government’s decision to build sewage treatment plants was taken in the absence of proper planning, and in total disregard of the possibility that the resulting water may be re-utilised. As usual, it is the taxpayer who will now have to foot a not-insignificant bill for the government’s remarkable lack of foresight in the matter.
As things stand, we have already reluctantly been forced to accept higher tariffs for water and electricity. It remains to be seen whether the people will also accept having to pay for the privilege of throwing precious water away.

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