PN turn up heat on Muscat’s energy policy and minimum wage position

Finance minister Tonio Fenech yesterday accused Labour leader Joseph Muscat of 'confirming' he would not reduce any energy bills within the coming five years.

Fenech said Muscat's solution to reduce energy bills by converting the Delimara power station to gas, as opposed to the heavy fuel oil being used today, was in line with government policy but a misleading proposal.

"There is no gas pipeline between Malta and Europe so a massive investment has to take place, and this won't happen before the EU funds from the 2014 financial framework come.

"Considering the nature of such an investment, from tendering to permits, to completion, this will take five years at least. Our experience in building the Malta-Sicily interconnector proves this," Fenech said.

Joseph Muscat recently told unions at last week's Labour congress that reducing energy tariffs was key to improving the lot of low-income groups and businesses' competitiveness.

But since saying he would not raise minimum wage, fearing an artificial increase in businesses' costs that would also raise prices, Prime Minister Lawrence Gonzi has taken the Labour leader to task.

"Nobody knows where they stand with Labour. Two years ago Muscat spoke about introducing a living wage, which he then toned down... now he is going to another extreme, saying it would be useless to raise the minimum wage. Labour will freeze the minimum wage," Gonzi said in an obvious allusion to a mandatory wage freeze Labour instituted in the 1980s in a bid to control inflation.

On his part, Muscat said the PL's decision to not push for an increase in minimum wage was a "controversial moment" and acknowledged the widespread surprise at the PL's adoption of a policy position uncharacteristic of a labour party. "We analysed our priorities, and decided that the priority for the current situation is economic growth. If this is not so, there will be problems with regards to workers rights, job creations, and the sustenance of the welfare state."

Tonio Fenech has accused the Labour party of proposing four different versions of dealing with Enemalta prices for electricity, saying Muscat suggested using diesel, reducing the return-on-capital-employed formula which reduces the amount of investment that is passed on the bills, and even toyed with carbon-capture solutions.

The Labour party, responding to the finance minister, said the government was in a panic over the raised water and electricity bills. "GonziPN has no credibility in the field of energy when it purchased a power station that operates with heavy fuel oil instead of gas."