Electricity cuts would have meant less social spending, Labour warns

The Labour Party has played down calls by the Opposition and various social partners for further electricity tariff reductions, warning that such a move would leave significantly less public funds available for social projects.

“The recent electricity cuts cost the government a total of €80 million a year,” economy minister and PL deputy leader Chris Cardona told a press conference at the Labour headquarters. “That money could have been used to build new schools, improve health services, and introduce new social measures, as indeed was announced in this year’s Budget. The government needed to strike a balance between electricity cuts and measures that promote social justice.”

Opposition leader Simon Busuttil yesterday criticised Prime Minister Joseph Muscat for not reducing electricity tariffs in the Budget for 2017, describing it as an “anti-climax”. Such a call for further tariff cuts was also made by the Malta Employers’ Association, the Chamber of Commerce and the Chamber of SMEs (GRTU).

Cardona also dismissed concerns that top-ups to low-income earners announced in the Budget was equivalent to taxpayers taking on a burden that could otherwise have been shouldered by the private sector through a higher minimum wage.

“It’s not true that taxpayers are paying for these top-ups. It is not the government’s strategy to tax citizens, and indeed has cut several taxes, however neither does it agree that businesses should be burdened further. Taxpayers, including those on a minimum wage, will ultimately have more money in their pockets as a result of this Budget.”

The economy minister also said that the doubling of rent subsidies for low-income earners living in private residences (from a monthly maximum of €83 to €166) only represented the government’s first step in reacting to soaring rent prices.

“The hike in rent prices across Malta is of major concern to the government, and had indeed been flagged by Caritas in a recent report. Rent prices are dictated by the market, but government can intervene through initiatives such as this one.” 

The Labour Party’s executive secretary Lydia Abela hailed the 2017 Budget as “the most social Budget in the past 25 years” and one that “has shifted the Labour Party closer to its socialist roots”.

Labour MP Silvio Parnis toasted various new measures, such as a rise in minimum pensions for married couples, the removal of income tax on pensions, the extension of the carer’s pension, and plans to ensure that no children are living in poverty by 2020.